More charges in $1.2B Arizona-based Medicare wound care fraud case

Three more suspects are facing charges in connection with a $1.2 billion Arizona-based wound care scheme that preyed on vulnerable patients and defrauded Medicare and other insurers, the U.S. Department of Justice says.

The latest charges involved out-of-state residents connected with the scheme. Charges were announced as part of an annual health care fraud effort, bringing the tally of suspects in the wound care scheme to at least 13.

Medicare is a federal health insurance program primarily for people aged 65 and older and is funded by tax revenue and enrollees’ premiums and out-of-pocket costs.

Two Valley residents, Alexandra Gehrke and Jeffrey King,…

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PAYROLL & HR CONTROLS (PREVENTING “GHOST” SCHEMES)

Payroll fraud is often the hardest to detect because it “looks” like a normal business expense.

• Segregation of Duties (SoD): The person who adds new employees to the system must not be the same person who approves the monthly pay run.
• Mandatory Vacation Policy: Require all financial and HR staff to take 5–10 consecutive days of leave annually. Fraud often surfaces when the perpetrator isn’t there to “hide” the trail.
• Ghost Employee Audit: Perform a quarterly “Headcount Reconciliation” where managers must physically verify every name on their payroll list exists.
• Self-Pay Blocking: Ensure the payroll software has a hard-coded block preventing administrators from editing their own salary or bank details.