In a single fraud case, federal agents seized nine luxury vehicles, nine properties, and more than $1 million in sports memorabilia from one man who stole $270 million from California’s Medicaid program in just 11 months. He was billing for prescription drugs that were never prescribed and never delivered to patients who needed them. He was caught. Most are not.
I know because I have spent decades working alongside federal agencies and more than 9,000 state and local government programs, testified before Congress, and advised on some of the largest fraud investigations in the country. What I have seen would shock most Americans.
Over $1 trillion is stolen from government programs every year, which works out to more than $115 million every hour. Roughly 70% flows directly to transnational criminal networks in Russia, China, Nigeria, and Romania, organizations that use those funds for child trafficking, drug operations, and direct attacks on our national security. These are not small-time criminals. They are sophisticated, fast-moving operations that know our payment systems better than many of the people running them.
TODD BLANCHE ANNOUNCES $50 MILLION FRAUD BUST IN OHIO
The current enforcement crackdown is long overdue, and it is producing results. Blocking reimbursements to suspected fraudulent providers and demanding that states show measurable prosecution results sends the right signal. Prosecuting aggressively works, and more of it is needed. But prosecution cannot keep pace with a trillion-dollar criminal enterprise that moves faster than any investigation can open.
Here is how the fraud actually works. A criminal organization incorporates a fake hospice, gets it credentialed, and starts billing within weeks. It runs for 18 months before any detection system flags the pattern. By the time an investigation opens, the money has been converted to cryptocurrency and wired overseas. The man who stole $270 million in California Medicaid funds had six prior fraud convictions and still built an eight-bedroom compound before anyone stopped him, because nothing in our payment systems caught the wire before it went out.
In just a few months, the Task Force to Eliminate Fraud has exposed billions in stolen benefits, blocked reimbursements to hundreds of suspected fraudulent providers, and held states accountable for results. To actually finish this fight, the Task Force to Eliminate Fraud, chaired by Vice President JD Vance, needs three more things.
The first is real-time payment screening at the point of disbursement. Every federal benefit payment should pass through fraud-detection technology before it is approved, not reviewed weeks later when the money is already gone. The same advanced artificial intelligence tools the criminal networks are using against us can be turned back on them at the moment of the transaction. It works in financial services and insurance on a massive scale every single day. The federal government has not required it of its own benefit programs.
The second is cross-agency data sharing that follows the criminal, not just the claim. Right now, each state and each federal program operates in a separate silo. A fraudster shut down in California simply moves to Nevada. Nevada saw a sevenfold increase in hospice applications after California cracked down. The balloon gets squeezed in one state and inflates in the next because the data never crosses the border. A national shared fraud database that flags bad actors across every program and every state would close that door permanently.
The third is independent third-party auditors who report directly to the Task Force to Eliminate Fraud, not to the agencies being defrauded. Internal reviews have structural pressures to minimize findings. Outside auditors with no political stake in the outcome and real-time access to payment data will find what internal teams miss. Every federal benefit program should be required to use them.
OHIO HAS ITS OWN SOMALI FRAUD PROBLEM, HOUSE OVERSIGHT SAYS
These three changes together would transform the fight. Not because they are complicated, but because they close the gaps criminals have been exploiting for decades. The tools exist. The authority to require them is already there.
Our health programs are designed to serve patients, not fund criminal networks. Getting there requires more than enforcement after the fact. It requires building the systems that stop the money before the luxury cars get purchased in the first place. The fraudsters are counting on the government to keep responding after the fact. These three steps get there first. That is what finally stops them.
Haywood Talcove is the CEO of LexisNexis Risk Solutions Government. He has testified before Congress on government fraud and consults with federal agencies and more than 9,000 state and local government programs on fraud detection and prevention.