A Georgian national has been indicted in Massachusetts after federal prosecutors say a Pennsylvania medical supply company he purportedly owned submitted at least $1.3 billion in fraudulent insurance claims in just five months.
Erekle Gugava, 33, is charged with one count of conspiracy to commit money laundering. Prosecutors say he purportedly owned ND Medical Solutions LLC, a durable medical equipment company, from February through July 2025 and opened several company bank accounts used to receive insurance payments.
The claims were submitted to Medicare, Medicare supplemental insurers, private employer-sponsored plans and union health plans. Although ND Medical allegedly billed at least $1.3 billion, insurers paid the company approximately $6.5 million.
The U.S. Attorney’s Office for the District of Massachusetts says the case is connected to Operation Gold Rush, the transnational operation the Justice Department has described as the largest health care fraud case by loss amount it has ever prosecuted.
Stolen Patient Identities Were Used to Support the Claims
Prosecutors say the fraudulent billing relied in part on stolen identities belonging to people in Massachusetts, elsewhere in New England and across the United States. Elderly people and people with disabilities were among those whose information was allegedly used.
Some beneficiaries discovered the problem after receiving benefit statements showing durable medical equipment they said they had never received. The records also listed prescriptions from doctors they had never visited and supplies supposedly delivered by ND Medical, a company they did not recognize.
Those identities allegedly helped make the claims appear connected to real patients even though prosecutors say the equipment listed on the bills had not actually been provided to them.
Gugava Allegedly Opened Accounts to Receive the Insurance Money
Federal charging documents say Gugava was the purported owner of ND Medical during the five-month billing period and opened several bank accounts in the company’s name. Prosecutors say he was the sole signatory on those accounts.
Checks from Medicare supplemental insurers and other health insurers were deposited into the ND Medical accounts. The funds were then transferred to overseas bank accounts for the benefit of the organization behind the scheme, according to prosecutors.
The Justice Department says the insurance proceeds were particularly susceptible to laundering because they came from legitimate sources, including Medicare and established private insurers, giving the money an initial appearance of legitimacy.
ND Medical Was Part of a $10.6 Billion Operation
ND Medical was only one piece of Operation Gold Rush. Federal authorities say a transnational criminal organization based in Russia and elsewhere used foreign straw owners to acquire durable medical equipment companies across the United States before rapidly billing Medicare through them.
The broader organization allegedly submitted more than $10.6 billion in fraudulent Medicare claims for urinary catheters and other durable medical equipment. Prosecutors say stolen identities and confidential medical information belonging to more than one million Americans across all 50 states were used to support the claims.
Federal data analysis helped identify the unusual billing before Medicare paid most of what had been submitted. Authorities said approximately $4.45 billion was scheduled for Medicare payment, but all except about $41 million was stopped. Medicare supplemental insurers still paid approximately $900 million across the broader operation.
Gugava Left the United States in July 2025
Prosecutors say Gugava left the United States in July 2025 after the alleged conduct described in the indictment. The latest federal announcement does not say that he has been arrested or returned to the United States.
He faces one count of money laundering conspiracy. If convicted, the charge carries a maximum possible sentence of 20 years in federal prison, three years of supervised release and a fine of up to $500,000 or twice the amount of money laundered, whichever is greater.
The indictment contains accusations that prosecutors must prove in court. Gugava is presumed innocent unless and until convicted.
Check Medicare Statements for Equipment You Never Received
The U.S. Department of Health and Human Services Office of Inspector General advises beneficiaries to review Medicare Summary Notices and insurance Explanation of Benefits statements for unauthorized durable medical equipment charges.
A claim for equipment that never arrived, a supplier the patient does not recognize or equipment that does not match a doctor’s prescription should be checked rather than assumed to be a billing mistake. HHS-OIG also advises consumers to be cautious about unsolicited offers of medical supplies and to verify that equipment they receive matches what their doctor actually prescribed.
Beneficiaries who find a suspicious claim should preserve the statement showing the supplier, equipment and charge and report suspected durable medical equipment fraud. HHS-OIG accepts reports through its fraud hotline at 1-800-HHS-TIPS and through its online complaint system.
Medicare beneficiaries can also review their claims through their Medicare account and report suspected Medicare fraud by calling 1-800-MEDICARE. Medicare numbers and other health insurance information should be protected because stolen beneficiary identifiers can be used to submit claims without the patient’s knowledge.