Gerald Quindry was facing a quandary. The 73-year-old retired engineer received a statement last year that Medicare, his health insurance provider, had been billed $15,500 for urinary catheters — but his doctor had never ordered them, and Quindry never wanted nor received them. Quindry complained to Medicare. But he said the representatives seemed nonplussed by his complaint, and he could find little information about the incident himself beyond news reports of catheter-related fraud in the government program.

“Obviously, somebody deserves to be in jail,” Quindry told The Washington Post in February.

Four months later, several people are — and they are facing criminal charges in what the government says is the largest health care fraud bust in U.S. history.

Quindry was one of more than 1 million Americans whose personal information was compromised in an alleged $10.6 billion fraud scheme, the details of which were unsealed last week and announced by federal officials Monday.

The two-year investigation, dubbed Operation Gold Rush, uncovered a conspiracy to purchase more than 30 small health care supply companies that were already enrolled with Medicare, officials said. Conspirators then used those companies to submit a flood of claims for urinary catheters, continuous glucose monitors and other supplies that were not medically necessary, law enforcement officials allege.

The numbers were often eye-popping. Beginning in late 2022, the companies collectively submitted fraudulent claims to Medicare for more than 1 billion urinary catheters, officials said.

“I don’t even know if [the United States] has the ability to manufacture 1 billion catheters in such a short time,” said Isaac Bledsoe, director of strategic projects and initiatives at the Department of Health and Human Services’ inspector general’s office, which helped lead the investigation along with the Justice Department and the FBI. “The absurdity, the brazenness of these actors is really just astounding.”

Federal officials were able to prevent more than 99 percent of the Medicare payments from reaching the alleged perpetrators, saying that teams at the Centers for Medicare and Medicaid Services and the HHS inspector general’s office moved quickly to identify fraudulent bills, suspend payments to the suspected companies and partner with other federal agencies that launched Operation Gold Rush in early 2023. They also said they had been able to seize tens of millions of dollars in fraud proceeds. Bledsoe said it showed how the federal government has moved from its long-standing “pay and chase” approach — where agencies would pay out claims before identifying fraud and then try to claw the money back — to a “stop and caught” model.

But the perpetrators, authorities allege, were still able to collect about $1 billion in payments from other insurance companies that help cover older Americans’ health care costs, known as Medicare supplemental insurers. Those insurers were contractually obligated to reimburse claims processed by Medicare — even if Medicare didn’t end up paying out the claims, officials said. For instance, Quindry said his supplemental insurance company, Blue Cross Blue Shield of Illinois, paid 20 percent of his fraudulent $15,500 bill.

Federal officials Monday also announced that they had disrupted other alleged health care fraud schemes potentially worth $4 billion in total, including some focused on telemedicine, genetic testing and opioid trafficking, as part of an ongoing government initiative aimed at health care fraud.

“These criminals didn’t just steal someone else’s money. They stole from you,” Matthew R. Galeotti, head of the Justice Department’s criminal division, said at Monday’s news conference, where he was flanked by CMS Administrator Mehmet Oz and other federal officials.

Nineteen people have been charged with helping coordinate the Operation Gold Rush scheme, according to indictments unsealed last week in federal court in New York, Illinois and other states. The alleged conspirators — who include people from Estonia, Kazakhstan and Russia — face charges of conspiracy, health care fraud and money laundering that could send them to prison for years. At least one has taken a plea deal, according to public court dockets.

Seven alleged conspirators were intercepted at U.S. airport departure gates and at the U.S. border with Mexico, officials said, while others have fled the U.S. Four defendants were apprehended in Estonia as a result of cooperation with Estonian law enforcement, officials said.

The Post last year first revealed the federal investigation.

Gabriel L. Imperato, a partner with the Nelson Mullins law firm and a former HHS lawyer, said Medicare supplies have long been a target for overseas health care fraud rings, which have often deployed similar tactics in hopes of tapping the sprawling, multibillion-dollar market.

“It’s just an opportunity for international criminals,” Imperato said, adding that fraudsters have used similar tactics for decades. “It’s a never-ending quest to try to get beyond the whack-a-mole phenomena.”

Officials said the episode underscores the vulnerabilities in the American health care system and the complexity of cracking down on waste, fraud and abuse — a vowed political priority of the Trump administration. The U.S. DOGE Service and its former leader, Elon Musk, repeatedly highlighted the risk of Medicare fraud this year, although with sometimes misleading or false claims.

The episode also resulted in mass confusion for patients across the country. Medicare and its contractors received more than 400,000 complaints related to the catheter scheme, federal officials said, with older Americans demanding to know why their Medicare accounts had been billed by companies such as Pretty in Pink and Mainstreet DME.

The scheme ensnared more than 7,000 physicians, whose identities were used to order medical supplies without their knowledge, according to officials. It enmeshed legitimate companies that happened to share the same name as the alleged perpetrators, such as the Pretty In Pink Boutique in Tennessee, an unrelated cancer supply store that was so drowned by complaints, it posted instructions on how to report insurance fraud.

It frustrated accountable-care organizations — groups of hospitals and physicians that receive federal incentives to deliver high-quality, low-cost health care — which worried that they could collectively lose millions of dollars in payments because it appeared that they were failing to manage their patients’ health care spending. The National Association of ACOs, an industry trade group, publicized the alleged fraud last year. The CMS subsequently issued a rule to change how it paid for catheters and effectively protect the accountable-care organizations from the spike in catheter bills.

And the scheme angered lawmakers, who demanded answers on why the alleged fraud had gone publicly unreported for more than a year.

Targeting catheters

Health care supplies known as “durable medical equipment,” or DME — such as wheelchairs, catheters and wound-care dressings — have long been an alluring target for scammers, in part because of the sheer number of claims that are submitted every day for payment. Medicare will pay 80 percent of DME claims if the equipment is prescribed by a physician, and Medicare supplemental insurers will often pay the remaining balance.

Bledsoe said the DME market also had a “low barrier for entry” for would-be fraudsters, compared with other health care schemes that would require a medical degree or advanced knowledge.

“With a DME company, you essentially need space, supplies and a person — and sometimes you don’t even need the supplies,” Bledsoe said.

The alleged conspirators homed in on intermittent urinary catheters — tubes that patients insert several times a day to drain their bladders and treat incontinence.

Urinary catheters made an appealing target for potential scammers because orders for the low-cost products could escape some of the scrutiny that accompanies billing for expensive equipment, surgeries and other high-cost claims, fraud experts said.

The alleged conspirators then were able to obtain sensitive Medicare information for about 1.2 million Americans, officials said.

“We have seen instances where Medicare beneficiary information can be bought and sold on LinkedIn, on Craigslist,” Bledsoe said. “It is available if you know where to look, and it’s not too hard to run across it.”

The alleged conspirators purchased small companies, such as Priority 1 Medical Equipment, a medical supply company in Bowling Green, Kentucky, for $200,000 in March 2024, according to charging documents. They hired U.S.-based office managers through internet postings and phone calls, relying on those workers to collect mail and deposit checks. Then they used cryptocurrency, virtual private servers and other means to cloak their identities and move money out of the U.S., officials said.

“A majority of the fraud occurred by individuals who never even set foot in the United States,” Bledsoe said.

As federal officials steadily identified the potential fraud, the CMS suspended payments to the companies and placed the funds in escrow as federal officials investigated. More than $5.5 billion in Medicare funds remains suspended, Bledsoe said.

Past calls to telephone numbers listed in state and federal records for Priority 1, Pretty in Pink and other companies being investigated led to busy signals, inactive numbers and voicemail.

Charging documents offer vivid depictions of how investigators surveilled suspects, inspected their offices and confronted some alleged conspirators as they attempted to leave or enter the country.

“Investigators viewed no indication a legitimate DME business was being run out of the location, as investigators did not observe any medical supplies or DME inside the business,” according to one court filing that included photos depicting the interior of Priority 1: a small office with empty shelves. Meanwhile, the company was in the midst of billing Medicare for about $667 million, claiming that it had provided urinary catheters and glucose monitors to about 50,000 Medicare beneficiaries.

Fast-paced fraud

Federal officials said Operation Gold Rush’s work is not finished, noting that some of the alleged conspirators are still at large and that new companies continue to run the same playbook.

Stephen Nuckolls, a health care executive who helped publicize the catheter fraud last year, said that accountable-care organizations have identified similar patterns of fraud this year around products such as skin substitutes, knee braces and other DME. While Medicare issued a rule last year to shield health care groups from catheter fraud, the newer fraudulent bills are threatening his and other organizations again, he said.

“It’s disappointing that CMS does not seem to have meaningfully adjusted its approach to prevent repeat abuse,” Nuckolls, the CEO of Coastal Carolina Health Care, wrote in an email.

The CMS did not immediately respond to a request for comment.

Seema Verma, who led the CMS in the first Trump administration, said the systems used to catch fraud were antiquated and sometimes involved paper records. Now, with technology and artificial intelligence, there is much more opportunity, she said.

“The digitization of medical records, the ability to interact with patients through portals and the introduction of AI will make it easier to combat the fraud and abuse that has plagued the health care industry,” said Verma, who is executive vice president and general manager of Oracle Health and Life Sciences. “It’s going to result in more arrests and greater protection for patients and taxpayers.”

Jetson Leder-Luis, an assistant Boston University professor focused on health care fraud, told The Post last year that the government needed to invest more in detection through artificial intelligence, machine learning and better data to save billions, he said.

“The government is getting better, the fraudsters are getting better,” he said. “And maybe the fraudsters are getting better faster.”

Federal officials said they were meeting the moment, noting that the alleged perpetrators at the center of Operation Gold Rush received only a sliver of their $10 billion in Medicare claims. They also announced the creation of a “health care fraud data fusion center,” which officials said would allow agencies to use cloud computing, artificial intelligence and advanced analytics to share information, identify fraud schemes and quickly prevent funds from being paid.

“As the criminals get smart, we get smarter,” Chris Schrank, HHS deputy inspector general for investigations, said in a statement. “We share insights and experience to stay one step ahead.”

Aaron Schaffer and Jeremy Roebuck contributed to this report.