Jun 4, 2026
When most of us think of fraud, we think of credit card charges we didn’t make or scams targeting the elderly. But it can also look like a secret warehouse filled with Ferraris, Mickey Mantle rookie cards and game-worn Kobe Bryant sneakers.
CBS News was able to take a rare look inside a government facility stuffed with seized assets purchased with taxpayer money that was illegally diverted through fraud. And the scale of the theft is breathtaking.
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By some government estimates, at least $500 billion in taxpayer money is lost to fraud schemes every year, with about $60 billion of those losses related to Medicare fraud. Others who consult with the government put the real figure above $1 trillion annually.
“It should offend every American taxpayer that these people are taking advantage of the system,” said Bill Essayli, the top federal prosecutor in Los Angeles.
How fraudulently accessed Medicare money disappears
The warehouse includes assets seized from Paul Randall, a serial fraudster who pleaded guilty in April to diverting more than $270 million in California Medicaid funds — one of the largest such schemes in state history. He faces up to 30 years in prison for his seventh fraud conviction.
“Obviously, there’s a breakdown in the criminal justice system if this guy was able to have six convictions and never did any real prison time,” Essayli told reporters.
Medicare fraud tactics vary: providers might double-bill for a single treatment, charge for equipment you never received or needed, or set up fake Medicare drug plans. In some cases, scammers simply ask you to “confirm” your Medicare number, and then use it to bill the government for care that never happened.
But Randall is just one case. The bigger problem is what happens to the vast majority of stolen taxpayer funds: they vanish overseas before authorities can touch them.
Haywood Talcove, CEO of LexisNexis Risk Solutions Government, consults with the government on tracking illicit funds. He estimates roughly 70% of stolen funds end up in the hands of transnational criminal organizations.
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“It goes to Russia, it goes to China, it goes to Nigeria, it goes to Romania,” Talcove said. “Taxpayers are funding transnational criminals who are using this money for horrible things — child trafficking, drugs, threats to our democracy.”
Fraudsters are also getting harder to catch thanks to digital currency. Once stolen funds are converted into digital currency, such as crypto, they become easier to move and harder to trace.
“That is why it is so important that the money never goes out in the first place; that’s why it’s important that we have systems in place to detect and prevent fraud,” Essayli said.
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How to protect against Medicare fraud
Fraud that targets government programs like Medicare doesn’t just dupe doctors and medical offices. It takes money from every American who pays taxes, and some of those thieves are living like royalty on our dime. One of the assets seized from serial fraudster Paul Randall was an 8-bedroom, 10-bath compound in Orange County, likely purchased with money that should have gone to pay for healthcare.
The Federal Trade Commission offers a few ways to protect yourself:
- Treat your Medicare number like a credit card number: Never share it with someone who calls unexpectedly. Medicare won’t call or visit you at home to sell you anything, and representatives will only ask for your information if you contact them first.
- Review your statements: Spot a charge for a doctor you never saw or a service you never received? Ask your provider or plan for an explanation. If something doesn’t add up, call your local Senior Medicare Patrol at 1-877-808-2468 or reach Medicare directly at 1-800-MEDICARE.
- Report medical identity theft quickly: If someone has used your information to get medical care or services, notify your provider immediately and report the theft to IdentityTheft.gov. They can also provide a personalized recovery plan.
Medicare fraud costs taxpayers billions of dollars every year, but the impact extends beyond the dollars lost. It also results in a loss of trust and wasted resources that could be used for patient care or other government initiatives.
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Danielle is a personal finance writer whose work has appeared in publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love. She’s especially passionate about helping families and kids learn smart money habits early.
