Nurse Fraud Crackdown Shows Risk to Hospitals
December 1, 2025
By Gregory Freeman
The latest federal crackdown on fraudulent nursing degrees shows the risk posed to patient safety by employees who were hired without the proper credentials. Healthcare organizations employing them face substantial liability risk.
In the latest development of Operation Nightingale, a large-scale law enforcement investigation into illegal licensing and employment shortcuts for aspiring nurses, prosecutors have filed fraud-related charges against 12 defendants for their roles in selling fraudulent nursing diplomas and transcripts. In Phase I, 30 defendants were charged and convicted in 2023.
The Department of Justice says the defendants conspired to sell false registered nurse (RN), licensed professional nurse (LPN), and LPN/vocational nurse (LPN/VN) credentials using diplomas and transcripts fraudulently obtained from Florida-based nursing schools.
“Purchasers of the bogus documents used them to qualify for the National Council Licensure Examination (NCLEX), commonly known as the nursing board exam. Candidates who passed the exam became eligible for licensure in various states and, once licensed, obtained employment as nurses across the United States,” according to a statement from the United States Attorney’s Office for the Southern District of Florida.
“The defendants, which include nursing school owners and employees, are charged with conspiracy to commit wire fraud. Their conduct involved multiple for-profit nursing schools in Florida, all of which have since closed. At one time, these schools were authorized to issue diplomas and transcripts to individuals pursuing RN and LPN/VN licensure. In total, the fraudulent schemes generated approximately 7,300 fake diplomas,” the statement says.
The District Attorney’s office says the charges highlight the purpose of a professional nursing licensure: protecting the public from harm by ensuring that only qualified and competent practitioners provide nursing care.
“Because nursing is a profession that, if practiced by unprepared or unqualified individuals, poses a serious risk to public health and safety, state boards of nursing establish standards for education, regulate licensure, and oversee compliance with training requirements,” the statement says. “The National Council of State Boards of Nursing requires candidates seeking RN or LPN/VN licensure to graduate from a board-approved pre-licensure program and pass the NCLEX. The Nurse Licensure Compact — adopted by 43 states, including Florida — further ensures that nurses meet consistent standards for safe practice.”
The threat is very extensive, says Paul F. Schmeltzer, JD, member with the Clark Hill law firm in Los Angeles. Enforcement materials and major press reports estimate that more than 7,500 fake diplomas are involved nationwide, and several states have reported dozens of license actions tied to the scam, he says.
“The result is that there could be thousands of illegally licensed or fraudulent nurses operating throughout the United States who, by virtue of their lack of qualifications, could put patients at risk,” Schmeltzer says. “This is a public safety issue.”
Healthcare employers could face accusations of negligent hiring and credentialing as well as corporate negligence if they failed to properly verify the licensure and competence of their nursing staff, he says. There also is a concern with noncompliance with Medicare’s Conditions of Participation, since hospitals must ensure personnel requiring licensure have valid, current licenses. The employer also could face liability under the False Claims Act if claims were submitted for services rendered by unlicensed or improperly credentialed staff, he says.
To reduce the risk, covered entities should make primary-source verification a standing workflow at hire and monthly thereafter, he says. They can use Nursys QuickConfirm to verify license and discipline statuses and enroll every nurse in Nursys e-Notify so they receive automated change alerts — and they should document each check.
“They should also require official sealed or directly transmitted transcripts from accredited programs or trusted clearinghouses. In addition, the covered entity must cross-check graduation dates against application and NCLEX timing and treat schools named in Operation Nightingale filings as higher risk for enhanced scrutiny,” he says. “The covered entity should also confirm NCLEX passage and, for Nurse Licensure Compact holders, validate multistate authority and the right to practice in the practice’s state via Nursys. Finally, they should screen the OIG’s (Office of Inspector General’s) List of Excluded Individuals and Entities at hire and monthly — and maintain documentation of each search.”
The scale of Operation Nightingale is unmatched and, hopefully, singular, says Alexis D. Gregorian, JD, partner with the Bradley law firm in Atlanta. However, the demand for nurses remains high, and several “imposter” nurses — individuals posing as nurses and treating patients without licenses — recently have been charged across the country, requiring continued vigilance in credentialing, even in the face of healthcare staffing challenges, she says.
“Healthcare entities that employ fraudulently credentialed nurses, even if unknowingly, could face medical negligence, medical malpractice, or negligent hiring claims,” Gregorian says. “Entities that employ these individuals knowingly are at even greater risk of professional negligence claims but could also potentially face civil or even criminal liability for billing healthcare benefit programs for services purportedly rendered by these individuals knowing they did not have the requisite training to provide them.”
Employers must be vigilant during the credentialing process by contacting references and previous employers in addition to closely scrutinizing a licensee’s diploma and transcript, she says.
“Many of the fraudulent diplomas in the Operation Nightingale scheme were backdated to dates when the subject nursing schools were still operational — before their certifications were revoked,” she notes. “Eagle-eyed attention to inconsistencies like unexplained gaps between the graduation date on a licensee’s diploma and the date the licensee passed the NCLEX are key to the credentialing process.”
False nursing credentials pose a serious risk to patient safety, says Andrew Young, JD, partner with the Snell & Wilmer law firm in San Diego.
“As a former federal prosecutor, I view Operation Nightingale as a serious reminder of the risks fraudulent credentials pose to both patients and institutions. Even a small number of unqualified nurses can compromise patient safety and erode public trust,” he says. “Employers who fail to verify credentials may face significant exposure, including negligent hiring claims and potential False Claims Act liability if unlicensed individuals provide services billed to federal programs.”
Young says the best safeguard is rigorous, ongoing verification. Healthcare organizations should confirm credentials directly with issuing schools, audit staff linked to the affected institutions, and implement continuous license monitoring.
“Proactive diligence now can prevent far greater legal and reputational harm down the line,” Young says.
Employer liability turns on the facts of the situation, and liability can stem from a regulatory investigation from a state licensing board or federal regulator like Centers for Medicare & Medicaid Services, or a criminal fraud or related investigation from local or federal authorities, like the Federal Bureau of Investigation or Department of Justice, says Susan L. Kimble, JD, of counsel with the Stoel Rives law firm in Seattle.
“Of course, patient safety, and resulting liability from patient harm, is a top concern,” she says. “Healthcare is also a team sport, and where any clinician on the team is not qualified, there is danger not just for patients, but for other clinicians, too.”
Nurses carry a huge ethical responsibility, Kimble says, and situations arise in healthcare every single day that require nurses to speak up under difficult and complicated circumstances. It is important that clinicians, including nurses, who are entrusted with patient care and advocacy, are properly qualified and trained so that employers can be confident in their decisions and judgment, she says.
It is important that hiring teams are and feel empowered to ask questions, investigate, and require confirmation from candidates, particularly regarding educational requirements, license status, and past clinical experience, she says. When hiring teams sense something might be off, they should be encouraged to speak up because patients are depending on them, she says.
“Though our healthcare system faces immense and complex challenges, including nurse staffing, there are thousands of clinicians working extremely hard to take good care of patients every day,” Kimble says. “Healthcare employers can support their clinical teams by making smart, efficient, and thoughtful hiring decisions that are supported by evidence, and by paying attention and updating processes when situations like the one in Florida arise.”
Greg Freeman has worked with Clinican.com and its predecessor companies since 1989, moving from assistant staff writer to executive editor before becoming a freelance writer. He has been the editor of Healthcare Risk Management since 1992 and provides research and content for other Clinician.com products. In addition to his work with Clinician.com, Greg provides other freelance writing services and is the author of seven narrative nonfiction books on wartime experiences and other historical events.
Sources
- Alexis D. Gregorian, JD, Partner, Bradley, Atlanta. Telephone: (404) 866-2784. Email: [email protected].
- Susan L. Kimble, JD, Stoel Rive, Seattle. Telephone: (206) 386-7612. Email: [email protected].
- Paul F. Schmeltzer, JD, Member, Clark Hill, Los Angeles. Telephone: (213) 417-5163. Email: [email protected].
- Andrew Young, JD, Partner, Snell & Wilmer, San Diego. Telephone: (858) 910-4786. Email: [email protected].
The latest federal crackdown on fraudulent nursing degrees shows the risk posed to patient safety by employees who were hired without the proper credentials. Healthcare organizations employing them face substantial liability risk.
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