Charges described below are allegations. An indictment, complaint or information is not evidence of guilt, and each defendant is presumed innocent unless and until proven guilty in court. Where a case has ended in a plea or sentence, the article says so. The Investigative Journal has not independently verified the Justice Department’s account and relies on the public records linked in each section. Parties named have the right of reply, and TIJ will update this article on request.
The Justice Department used the closing days of the week to announce a heavy slate of fraud and national security actions. Records published Oct. 20–22, 2026 suggest the department’s newly named National Fraud Enforcement Division is leaning on coordinated, multi-district “surges” and takedowns. Below are seven notable actions, followed by cases that may warrant deeper TIJ reporting.
1. Los Angeles health care fraud takedown: 15 defendants, about $1.8 billion in claims
According to a Justice Department announcement dated Oct. 22, the National Fraud Enforcement Division and its partners charged 15 defendants, including six medical professionals, in schemes that allegedly generated more than $1.8 billion in fraudulent claims to government and private insurers. The release says eight defendants were arrested that day, six of whom were to appear in federal court in downtown Los Angeles and two in Texas. A parallel posting appears on the DEA website.
The largest component involves substance abuse treatment. Four defendants (Nathan Young, David Young, Honey Phipps and Cody Phipps) are charged with conspiracy to commit health care and wire fraud and with violating the Eliminating Kickbacks in Recovery Act. Prosecutors allege they recruited vulnerable patients with inducements and steered them into sham or medically unnecessary treatment that was billed to private insurers, roughly $1.6 billion in all. A separate defendant, Nicholas Moore, has pleaded guilty to conspiracy charges and admitted helping submit $199 million in fraudulent claims, according to the release.
Other counts in the takedown include allegedly unnecessary arterial procedures billed to Medicare (about $135 million), three hospice schemes alleged to exceed $138 million in combined claims, kickbacks for genetic testing orders, a Medi-Cal pharmacy case in which about $178.7 million was paid out of roughly $270 million in claims, and the alleged resale of prescription drug samples, including GLP-1 medications. The significance lies less in any single defendant than in the breadth: the filings suggest prosecutors are targeting each layer of the chain, from owners to the clinicians who sign certifications. All defendants other than those who have pleaded are presumed innocent.
2. HHS and DOJ launch False Claims Act self-disclosure pilot
On the civil side, HHS and the Justice Department’s Civil Division announced on Oct. 22 a six-month Healthcare False Claims Act Self-Disclosure Pilot Program. Companies that voluntarily disclose potential violations by April 22, 2027 may resolve them through a coordinated civil release. Repayment is calculated at a multiplier of 1.25 to 1.6 times the loss, depending on timeliness, duration, scope, leadership involvement and financial benefit, per the announcement. In exchange, HHS-OIG says it will not impose exclusion or require a Corporate Integrity Agreement, and CMS will not revoke billing privileges.
Law-firm commentary, including a Sidley Austin analysis, characterizes the fixed multiplier as a notable departure from the negotiated damages typical in False Claims Act settlements. Compared with the multiples of damages that litigated cases can reach, the pilot offers predictability. The practical effect may be a wave of quiet disclosures that never appear on a docket, a development TIJ will watch through settlement announcements.
3. First national USDA benefits fraud surge: more than 40 defendants
The Fraud Division, USDA and USDA’s Inspector General announced on Oct. 21 what they call the department’s first national USDA benefits and program fraud enforcement surge. Running from Sept. 1 to Oct. 21 with 13 U.S. Attorneys’ Offices and the Utah Attorney General’s Office, it produced actions against more than 40 defendants and nearly $45 million in alleged or proven intended loss, about $42 million of it tied to SNAP.
The lead case, United States v. Yaseen and Kanaan (S.D. Ohio), alleges $29.7 million in intended loss from Chicago stores that processed transactions using stolen Ohio EBT information. Charges include wire fraud conspiracy and money laundering conspiracy. In the Northern District of Georgia, Mercedes New is charged in a $4.4 million case involving a SNAP retailer and more than 500 linked EBT cards. The release also lists a guilty plea in a $3.2 million crop-insurance case (Mark Frisbie, M.D. Fla., with $1.5 million in restitution agreed) and sentences in an Oregon case that has now reached twelve sentenced defendants. As with the takedown, the indictments and complaints are allegations.
4. Illinois lab owner charged in $66 million COVID-19 testing scheme
A federal grand jury in the Northern District of Illinois returned an indictment, announced Oct. 20, charging Rajesh Patel, 52, of Schaumburg, with five counts of wire fraud. The government alleges Patel, co-owner and chief operating officer of a Hillside laboratory, generated fake negative results for at least 380,000 PCR tests the lab never performed, partly through an arrangement with a staffing company that supplied patient information for many purported patients who allegedly did not exist or gave no specimens.
The lab allegedly billed the HRSA Uninsured Program about $66.2 million and was paid about $44.1 million; prosecutors say Patel personally obtained roughly $28 million. Each count carries up to 20 years. Pandemic-era program fraud continues to produce charges years after the emergency ended, and the dollar-to-patient mismatch described here is the kind of pattern investigators use to find such cases. Patel is presumed innocent.
5. Instacart: $5 million joint settlement over hiring of U.S. workers
The Civil Rights Division and the EEOC announced on Oct. 20 a settlement with Maplebear Inc., doing business as Instacart. The agencies allege that in the PERM labor certification process, the company’s recruitment favored temporary visa holders, including by requiring that applications for PERM-advertised jobs be physically mailed even though its normal process accepted electronic applications. Those allegations are the government’s; the settlement is not described in the release as an admission.
The terms: a fund of up to $4 million for affected and deterred U.S. applicants between December 2023 and February 2026, $1 million in civil penalties, public posting of PERM positions, electronic applications, training and monitoring. The department describes it as its fifteenth settlement under the Protecting U.S. Workers Initiative since 2025. Employers that sponsor foreign workers should read it as a signal of continuing scrutiny of the recruitment step.
6. Tennessee man sentenced to 17.5 years for arson and attempted material support to Hizballah
In a national security case, the department announced that Regan Darby Prater, 28, of Tullahoma, Tennessee, was sentenced to 210 months in prison, three years of supervised release and $1,289,000 in restitution. Prater pleaded guilty in April 2026. According to the release, he destroyed a building at the Highlander Center in New Market with a napalm-based incendiary device, causing more than $1.2 million in damage, and in 2019 passed a document containing personal data on more than 35,000 people purportedly affiliated with the Israeli government to someone he believed was tied to Hizballah, a designated Foreign Terrorist Organization.
The FBI Nashville office led the investigation. The case is notable because it joined a domestic civil-rights prosecution with a counterterrorism charge, and because the material support count was an attempt: the recipient was, by the department’s account, someone Prater believed to be connected to the group.
7. Chinese money laundering courier gets nine years
In the Western District of North Carolina, Shu Jun Zhen, 31, of New York, was sentenced on Oct. 21 to nine years in prison and ordered to forfeit nearly $23 million. She pleaded guilty in July 2025 to money laundering conspiracy and related counts, admitting she knew the money included drug proceeds. Prosecutors say she was a courier for a Chinese money laundering organization that laundered more than $92 million, collecting bulk cash from U.S. traffickers and depositing it into shell-company accounts using real and fake identities.
The release says she is the second defendant from this organization to receive a significant sentence, and that the case was part of the Homeland Security Task Force initiative with DEA and IRS Criminal Investigation. Chinese money laundering organizations have become a recurring feature of cartel-finance prosecutions, and the shell-company layer described here is a point where banks’ compliance records may matter.
Cases that warrant deeper TIJ investigation
- Hospice enrollment and certification. Three separate hospice schemes totaling more than $138 million were charged in a single takedown. Public CMS enrollment and ownership data may show how related entities were structured.
- EBT and SNAP retailer data. The Ohio and Georgia cases involve stolen or linked EBT card numbers. Questions for state agencies: how were the anomalies detected, and how long did they run?
- Self-disclosure pilot outcomes. Because disclosures are confidential unless a resolution is announced, TIJ will track settlements citing the program through April 2027.
- Shell-company banking. Court records in the Charlotte money laundering case may show which institutions opened the shell accounts.
Sources: U.S. Department of Justice press releases linked above; HHS press office; DEA; Sidley Austin FCA Blog. Right of reply: any named party or counsel may contact the TIJ newsroom to respond, and responses will be added.