Key insights
- The Treasury Department is urging financial institutions to monitor healthcare fraud schemes targeting government programs. Increased scrutiny and reporting of suspicious activity related to healthcare fraud may lead to increased compliance costs for financial institutions and potentially impact earnings in the healthcare sector, though the overall market impact is expected to be limited.
Investing.com -- The U.S. Department of the Treasury’s Financial Crimes Enforcement Network issued an advisory on Monday urging financial institutions to monitor fraud schemes targeting government healthcare benefit programs including Medicare and Medicaid. The move supports President Trump’s pledge to combat fraud.
The advisory follows Treasury Secretary Scott Bessent’s trip to Minnesota earlier this year, where he announced steps Treasury is implementing to detect and stop government benefits fraud across the country.
FinCEN’s advisory provides financial institutions with an overview of how fraudsters, organized crime groups, and transnational criminal organizations are targeting government healthcare benefit programs. It highlights money laundering typologies and red flag indicators to help financial institutions identify and report suspicious activity.
Financial institutions filed 20% more suspicious activity reports related to healthcare in 2025 than in 2024, after President Trump pledged to eliminate fraud nationwide. This reporting likely represents only a small fraction of the illicit activity connected to healthcare fraud in the United States.
The advisory details how transnational criminal organizations exploit federal and state healthcare benefit programs through schemes that file false and fraudulent claims for reimbursement, including nonexistent, exploitative, substandard, or unnecessary medical care. The organizations send non-resident aliens into the United States to serve as straw owners of recently established or purchased healthcare providers or suppliers registered with federal or state healthcare benefit programs.
The organizations illicitly obtain the names and identification numbers of beneficiaries enrolled in these programs, using that information to file false and fraudulent claims for reimbursement. This is often facilitated through kickbacks and bribes to complicit medical professionals.
Once the claims are paid to bank accounts owned by shell companies, the organizations launder the reimbursements through the U.S. and international financial systems via wire transfers, digital assets, and other money laundering methods, including the use of complicit insiders at financial institutions.
FinCEN also issued a proposed rule on Monday to implement its whistleblower program. The rule proposes procedures for whistleblowers to provide information to FinCEN about potential violations and sets forth eligibility criteria for issuing awards and adjudicating award applications.
Awards to eligible whistleblowers will range from 10% to 30% of monetary penalties resulting from qualifying enforcement actions. Payments will be funded by penalties collected under the Bank Secrecy Act and the International Emergency Economic Powers Act from actions brought by Treasury and the Department of Justice.
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