DOJ Launches West Coast Health Care Fraud Strike Force

The announcement signals a new targeted focus and criminal enforcement risk for health care operators—particularly technology‑driven platforms, digital prescribing models, billing intermediaries and PE‑backed roll‑ups—operating in the Western United States.

Why This Matters
DOJ emphasized that Silicon Valley and adjacent markets have become focal points for sophisticated, data‑driven health care fraud, including schemes designed to exploit Medicare, Medicaid, TRICARE and private insurers. The Health Care Fraud Strike Force has been used successfully before and is being launched on the West Coast. According to DOJ, the national Strike Force model has already resulted in the prosecution of more than 6,200 defendants involving over $45 billion in fraudulent billings.

According to the announcement, DOJ is bringing “enhanced federal enforcement resources to one of the nation’s most significant health care technology hubs in the Northern District of California and what data analytics show is the migration of fraud schemes to Arizona and Nevada.”

Recent Prosecutions Underscore Criminal Exposure and Enforcement
The Strike Force builds on a series of recent high‑impact criminal cases, several of which DOJ highlighted in the announcement:

• United States v. Schena Trial Conviction (N.D. Cal.). A Silicon Valley medical‑technology executive was sentenced to eight years in prison and ordered to pay $24 million in restitution following DOJ’s first criminal COVID‑19 health care fraud case to go to trial, in violation of the Eliminating Kickbacks in Recovery Act. The case was also the first criminal securities fraud case related to the COVID-19 pandemic. According to DOJ, the case also involved more than $77 million in claims for COVID-19 and allergy testing.
• $1.2 Billion Wound Graft Fraud Scheme (Arizona). Two company owners were sentenced to 15.5 and 14 years in prison, with DOJ seizing over $10 million in assets, including cash, luxury vehicles, and gold and silver bars and coins. The scheme involved more than $279 million in illegal kickbacks.
• $650 Million Arizona Medicaid Billing Scheme. The owner of a Pakistan‑based medical billing company was indicted as part of a broader takedown involving at least 41 substance abuse treatment clinics; the defendant remains a foreign fugitive. According to DOJ, false and fraudulent claims were submitted for addiction treatment services that “were not provided, were not provided as billed, were so substandard that they failed to serve a treatment purpose, were not used as part of or integrated into any treatment plan, and were medically unnecessary.”

In the announcement, DOJ emphasized long prison sentences, aggressive forfeiture and willingness to pursue extraterritorial defendants are central features of the Strike Force strategy.

Corporate Risk: Disclosure, Data and Parallel Proceedings
The announcement also ties directly to DOJ’s new department‑wide corporate enforcement policy, which creates incentives for companies to voluntarily disclose criminal conduct. (See also Key Questions Remain Under DOJ’s New Department-Wide Corporate Enforcement Policy; A Single DOJ Corporate Enforcement Policy Raises Questions.) DOJ expressly encouraged reporting of wrongdoing in the health care sector.

For companies, this raises several key considerations:

• Data analytics focus: DOJ will leverage claims data, prescribing metrics and referral patterns to identify outliers—often before whistleblowers surface.
• Parallel investigation: Criminal investigations increasingly proceed alongside False Claims Act, civil forfeiture, DEA and HHS‑OIG actions.
• Executive and individual accountability: DOJ statements repeatedly emphasize executives, owners and licensed professionals—not just corporate entities—are subject to criminal enforcement, including prison terms.

Key Takeaways for Health Care and Health‑Tech Companies
Companies operating in or expanding into the West Coast should consider:

• Reassessing compliance programs with specific focus on billing integrity, referral relationships, prescribing practices and third‑party vendors;
• Auditing data analytics internally—including utilization rates, geographic billing spread and reimbursement anomalies—before DOJ does;
• Re‑examining referral, kickback and revenue models by mapping all referral pathways (marketing, lead generation, platform fees, revenue sharing). Review historical arrangements, not just current contracts;
• Revisiting escalation and disclosure protocols, including board‑level readiness for potential self‑reporting decisions and consult with experience counsel;
• Stress‑testing PE and M&A diligence for historical billing, kickback exposure and controlled‑substance risk. Expand diligence to include historical billing audits, data trends, referral and marketing structures, and re‑evaluating successor liability and claw‑back provisions; and
• Preparing for dawn‑raid scenarios, subpoenas and joint agency investigations involving FBI, DEA and HHS‑OIG. Companies should update dawn‑raid, subpoena and search‑warrant protocols, coordinating legal, compliance, IT and communications teams and preserving privilege and work‑product protections during internal reviews.

Conclusion
The launch of the West Coast Health Care Fraud Strike Force marks a significant focus in criminal enforcement for health care and digital health companies across Arizona, Nevada and Northern California. DOJ has made clear that it will focus on health care fraud, including prosecution, forfeiture and long prison sentences.