Uncovering the Hidden Fraud in Healthcare

The USPS Office of Inspector General recently brought to light a significant healthcare fraud scheme that has been operating for a decade. This scheme involved Texas pharmacies and medical professionals who billed the government for unnecessary prescriptions. The investigation revealed that these healthcare providers were prescribing compound pain creams to injured federal workers, including USPS employees, and charging inflated prices. The Department of Labor's Office of Workers' Compensation Programs (OWCP) was the primary victim in this scheme. In 2025, the investigation resulted in criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals. The intended losses from this fraud were estimated to be over $14. 6 billion. The investigation began in 2015 when the USPS Office of Inspector General noticed unusually high reimbursements from OWCP to three Texas pharmacies. It was discovered that doctors were prescribing unnecessary creams and billing the government at inflated prices. Over a three-year period, these pharmacies billed OWCP more than $145 million and received over $90 million in payments. The creams themselves were inexpensive to produce, but the pharmacies billed thousands of dollars per prescription, keeping the profit and sharing it with others involved in the scheme.The investigation also revealed that money was laundered through shell companies, causing approximately $24 million in tax losses to the U. S. government. In a related scheme, pharmacy owners billed a major private insurance company for unnecessary prescriptions written for their own employees. Two pharmacy owners pleaded guilty and were sentenced to a combined 32 years in federal prison. The government seized over $396. 5 million in cash and $4. 6 million in real property, marking the largest cash forfeiture in the history of the Justice Department's Northern District of Texas Health Care Fraud Unit. Another family-owned pharmacy in Pharr, Texas, billed OWCP over $95 million and received $41 million in payments. This pharmacy also billed TRICARE nearly $10 million. The owner recruited marketers, a physician, and clinic staff to steer unnecessary prescriptions to the pharmacy in exchange for kickbacks. In total, 11 defendants pleaded guilty to healthcare fraud and kickback conspiracy charges. Nine have already been sentenced, with prison terms totaling more than 16 years, and were ordered to repay over $33 million to victims. It is important to note that injured federal workers, including USPS employees, did not receive any financial benefit from the scheme and were considered victims of the fraud.