The U.S. Treasury Department is set to launch a new whistleblower program Monday that will reward tipsters with up to 30% of the fines levied on criminals accused of defrauding taxpayers, according to The Post. The initiative, led by Treasury Secretary Scott Bessent, targets widespread abuse in federal programs including Medicaid and Medicare, where fraud is estimated to be in the tens of billions a year.
Lucrative incentives to expose US health care fraud
Under this scheme, individuals who provide useful information leading to enforcement action may receive between 10% and 30% of monetary penalties collected in cases exceeding $1 million. The payments will be funded directly from fines, not from public funds, ensuring that the cost is not borne by taxpayers.
“Individuals located in the United States or abroad who provide information may be eligible for awards if the information they provide leads to successful enforcement resulting in monetary penalties in excess of $1,000,000,” one of the documents reads, according to the NYP.
The program mirrors the existing Internal Revenue Service model in the US, but significantly expands its scope to include health care fraud and other financial crimes.
Medicaid and Medicare fraud costs billions each year
According to a New York Post report, Medicaid and Medicare fraud alone is estimated at $68.7 billion annually.
“Fraud, including health care fraud and government benefit fraud, also continues to be one of the largest sources of illicit revenue in the United States,” the advisory said, adding that “healthcare fraud has increased significantly since the COVID-19 pandemic.
Officials warn that such abuses ultimately drive up health care costs and divert critical resources from legitimate beneficiaries.
Complex fraud networks exploit systemic loopholes in the US
Fraudsters often rely on shell companies and “straw owners” to submit bogus claims for services that were never provided, according to Treasury documents. These operations may involve identity theft, bribery, and collusion with healthcare professionals.
“This is often facilitated by the payment of kickbacks and bribes through recruiters and marketers who complicit doctors, nurses, pharmacists and other medical professionals for fraudulent, non-existent, exploitative or unnecessary medical care,” the advisory said.
Funds are often laundered through bank transfers, cryptocurrencies or high-value purchases before moving overseas.
Banks are being urged to tighten surveillance on suspicious transactions
The Treasury Department’s Financial Crimes Enforcement Network will simultaneously issue an advisory instructing financial institutions to increase their vigilance regarding transactions potentially linked to healthcare fraud.
Banks are required by the Bank Secrecy Act to file a Suspicious Activity Report when possible money laundering or fraud is identified. The advisory outlines several warning signs, including sudden spikes in billing activity and rapid international transfers following government payments.
Failure to comply could expose institutions to regulatory scrutiny and significant penalties.
High-profile cases highlight the extent of the abuse
Recent enforcement actions have revealed the extent of fraudulent schemes targeting public programs. Federal prosecutors last year indicted 324 defendants in a $10 billion health care fraud case as part of Operation Gold Rush.
In Minnesota, investigators uncovered a network of fraudulent operations, including fake clinics and food distribution programs. In just one case involving Feeding Our Future, $250 million was siphoned from child nutrition funds.
“Our citizens have a right to know that their tax dollars are not being diverted to fund acts of global terror or to finance luxury cars for fraudsters,” said one Treasury official.
Part of the Trump administration’s broader push for zero tolerance
The rollout follows a broader federal crackdown on fraud, including an executive order signed in March 2025 that mandates a zero-tolerance approach to abuse of government programs. The newly formed Anti-Fraud Task Force also coordinates enforcement efforts across agencies.
