US federal prosecutors charged 11 people on Friday in a Russia-based scheme to bilk Medicare – the American health insurance program for the elderly and disabled – out of $10.6bn through fraudulent billing for expensive medical equipment.

The “transnational criminal organization” orchestrated a “multi-billion-dollar health care fraud and money laundering scheme” that included purchasing dozens of medical equipment companies from prior legitimate owners to perpetrate the fraud, according to the indictment dated 18 June.

More than a million Medicare recipients had their personal information stolen and used by the defendants to file for billions of dollars in claims from Medicare and its supplemental insurers, prosecutors said in the filing.

The claims were filed through medical equipment providers that the group had purchased, but no equipment was ever sent out for the payments.

Medicare paid “approximately $41 million as a result of the fraudulent submissions” and supplemental insurers are estimated to have paid out $900m more between 2022 and 2024, prosecutors wrote.

The scheme was organized by Imam Nakhmatullaev, who is based in Russia, officials said, and managed the other defendants who were in Estonia, the Czech Republic and the US.

The fraud was identified after “hundreds of thousands of Americans reported their concerns to Medicare and its contractors after receiving explanation of benefit forms that reflected them purportedly receiving” equipment that they neither sought or received, the indictment said.

The organization moved its proceeds through shell companies to bank accounts in countries such as Singapore, Pakistan and Israel and laundered it using cryptocurrency, according to the indictment, the New York Times reported.