Two men built a string of fake medical equipment suppliers, prosecutors in California say, and used them to send Medicare more than $3.5 million in fraudulent claims. A grand jury indicted Nouman Mustafa, 36, of Torrance, and Mohsin Khan, 40, of Bakersfield, on September 17, and the U.S. Attorney’s Office for the Eastern District of California announced the case on September 30. That puts the announcement 13 days after the indictment, and more than seven months after Mustafa’s arrest at the airport in February.
The indictment charges multiple counts of health care fraud and aggravated identity theft. The charges are allegations, and the office notes that both men are presumed innocent until proven guilty beyond a reasonable doubt.
The claims were for durable medical equipment, the category of home-use items Medicare covers, and they ran from January 2025 through January 2026. According to the indictment, the details behind them were real: contacts in Pakistan and elsewhere supplied information on actual Medicare beneficiaries and their doctors. For anyone on Medicare, that makes the monthly statement the place where a case like this would first show up, as an equipment charge from a supplier the patient has never dealt with.
Khan’s first court appearance was set for September 30, and the announcement gives no trial date, so the next step in the case is a schedule the court has yet to publish.
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Companies with no storefronts
Prosecutors say the companies existed on paper. They were designed to look like legitimate equipment suppliers, but none had a storefront, a warehouse or any location where real business could take place. Each was used for only a few weeks or months, until Medicare began denying its claims for suspected fraud, and then the men moved on to the next one. Prosecutors describe the claims period as running from January 2025 through January 2026, so the filings continued for roughly 13 months, and the shells were rotated through that whole stretch.
That pattern is why a total of $3.5 million could come from a long list of small operations rather than one large supplier. A denial at one company did not end the activity, according to the indictment, because a new shell was ready to submit the next batch.
Where the money went, and the arrests
The indictment alleges the men kept about 30% of the proceeds and sent the rest back to their contacts overseas. Mustafa was arrested on February 11, 2026, at Los Angeles International Airport on a criminal complaint while trying to board a one-way flight to Pakistan. Khan was arrested at his Bakersfield home on September 29, the day before the case was announced.
Court records describe both men as Pakistani nationals with dual U.S. citizenship who have worked in the United States as security guards, warehouse managers and licensed insurance agents. U.S. Attorney Eric Grant announced the charges.
The Department of Health and Human Services Office of Inspector General investigated, with help from the Bakersfield Police Department, and Assistant U.S. Attorneys Arelis Clemente and Joseph Barton are prosecuting. The inspector general’s enforcement page lists the case among its Medicare actions and describes the claims as millions of dollars for durable medical equipment.
What conviction could carry
Each health care fraud count carries up to 10 years in prison and a fine of up to $250,000. Each count of aggravated identity theft carries a mandatory minimum of two years, served after any other sentence. Actual sentences would be set by the court under the federal Sentencing Guidelines, and nothing has been decided.
The $3.5 million is the value of claims submitted, which is not the same as money paid out. The announcement does not say how much of it Medicare paid. That figure, and any amount ordered returned, would come from the court record as the case proceeds.
Checking Medicare statements for equipment nobody ordered
Medicare’s own guidance is to compare the dates and services on a calendar with the statements Medicare sends, and to confirm that every listed service was received and the details are right. A secure account on Medicare.gov shows Original Medicare claims once they are processed, which lets a mistake surface sooner than a paper statement would. Medicare also says it does not call to sell anything or visit homes, and that a Medicare card or Medicare Number should go only to doctors and to people who should have it, such as insurers acting for the patient or the State Health Insurance Assistance Program, known as SHIP. Anyone who needs a local SHIP counselor can find one at shiphelp.org.
Anything that looks wrong, such as equipment that never arrived, a supplier with no known address or a doctor who never prescribed the item, can be reported at 1-800-MEDICARE (1-800-633-4227) or through the HHS inspector general’s online fraud form. Medicare Advantage and drug plan members are directed to a separate line, 1-877-772-3379. Identity theft can be reported at IdentityTheft.gov.
Having the supplier name, the date of the claim and the item described on the statement ready makes the call shorter. The charging announcement from the U.S. Attorney’s Office remains the source for what the two men are accused of, and the court record will show how the case resolves.
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This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
