A small Austin medical supply business that appeared to be little more than a mailroom is at the center of an alleged Medicare billing scheme that prosecutors say moved quickly and funneled millions of dollars overseas, according to a newly filed federal criminal complaint.

Nika Machutadze, a Russian citizen living in Texas, is charged with conspiracy to commit money laundering. Investigators say two medical equipment companies tied to him — including Centurion Superior Medical in North Austin — billed Medicare and other health programs for urinary catheters that patients did not need or receive. The proceeds were routed through U.S. bank accounts before being wired to Hong Kong, according to federal court records.

A company that looked small — but billed big

Centurion began submitting large batches of claims in late September 2025, shortly after Machutadze became the company’s managing member, investigators said. In a little more than a month, the company submitted claims for 78,663 items — mostly intermittent urinary catheters — billing roughly $134 million, with $90 million initially processed as “paid.”

Medicare suspended payments to Centurion on Oct. 2, 2025, but supplemental “Medigap” insurers continued issuing checks, which were then deposited into Centurion accounts, the affidavit states. This highlights a longstanding vulnerability in the system: Once Medicare processes a claim, private insurers typically pay their portion even if Medicare later freezes its own payments.

Investigators say Machutadze then moved the money through multiple accounts and wired at least $988,830 from Centurion accounts to a shell entity in Hong Kong.

“Wow – I have no idea” said employee from inside the Austin office

When the CBS News Texas I-Team visited Centurion’s listed address, a small basement office in a North Austin building, two workers were inside. Both said they responded to an online job posting and were hired to open mail and scan documents. They said they were unaware of the allegations.

“I thought they were doing medical records. I just scan it in,” one employee told the I-Team, adding, “I had no idea.”

Medicare patient asks, “What the hell is this?”

Late last year, Medicare recipients across the country began noticing catheter charges on their statements from a company they had never heard of.

“When we first got the notice on my husband’s Medicare summary, it had the charges, and I said, ‘What the hell is this?'” said Suzette Elekman of Florida.

Dorothy Merritt of Tennessee said she initially thought she had opened someone else’s mail. 

“But then I looked at it and realized — no, that’s me,” she said.

Arthur and Martha Carpenter, also from Tennessee, told the I-Team they felt blindsided by the lack of verification.

“It took four months to let us know this was happening,” Arthur Carpenter said. “By then, they had paid it all out. Nobody checked.”

Second company, bigger numbers

The affidavit also describes a second medical supply company, this one based in Florida, that investigators say is linked to Machutadze. That company submitted claims for 1.64 million medical items totaling $3.34 billion. Medicare suspended payments on Dec. 26, 2024. Investigators say at least $4.35 million from the company’s accounts was wired to Hong Kong and China.

Agents reported finding little evidence that either company actually purchased or shipped medical supplies.

Money moved fast, and so did investigators

According to the affidavit, agents tracked Machutadze in late December 2025 – watching him from his Austin apartment as he visited mail stores and banks. When authorities learned on Jan. 29, 2026, that Machutadze had booked a flight from Mexico with a final destination in the United Arab Emirates, they moved to arrest him.

Machutadze’s attorney told CBS News Texas that his client maintains his innocence but could not address the specific allegations at this time.

Happening again: latest case mirrors nationwide crackdown

The case comes months after the Justice Department announced the largest health care fraud takedown in U.S. history. 

As part of that crackdown, 19 defendants were indicted in what prosecutors described as a Russian-based transnational scheme that used shell buyers to acquire U.S. medical supply companies. The group then submitted $10.6 billion in fraudulent claims for urinary catheters and other durable medical equipment — an operation known as Operation Gold Rush.

One of the companies that prosecutors said was used in the scheme, Konaniah Medical Supplies, listed an address in Grand Prairie. A 2024 I-Team investigation found the Texas company billed Medicare nearly $3 billion for urinary catheters in the alleged scheme.

The Centers for Medicare & Medicaid Services said it could not comment on the active Centurion investigation at this time, but, in a statement to CBS News Texas, CMS said it uses data analytics, beneficiary complaints and referrals to flag suspicious billing and can suspend payments or revoke billing privileges. CMS said its Fraud Defense Operations Center helped suspend $5.7 billion in suspected fraudulent Medicare payments in 2025.

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