While federal prosecutors have been investigating the case for more than a year, it is the most prominent insider-trading case to be filed by the United States attorney’s office in Manhattan since its chief, Preet Bharara, was fired by President Trump in March. The Centers for Medicare and Medicaid Services spend more than $1 trillion a year on health care programs for the elderly, disabled and lower income families and are major buyers of medical instruments, drugs and medical services.
Mr. Blaszczak, a former employee at the agency and founder of Precipio Health Strategies, was accused of pumping a friend at the agency for market-moving information that he passed to his clients at Deerfield, an unsealed indictment said.
In his interactions with the hedge fund partners, Mr. Blaszczak bragged about his access to the inside information. In an email message, he said his analysis differed from that of one of his competitors because that competitor “doesn’t know anyone at cms. His guesses are just wild random guesses,” according to a separate complaint filed by the Securities and Exchange Commission.
The information involved tips about potential changes in government policy and regulations for things such as radiation therapy and kidney dialysis and how these policies would affect publicly traded companies.
Two of the partners, Rob Olan and Ted Huber, were named in the indictment on Wednesday. Jordan Fogel, who worked at Deerfield from 2006 until last year, was charged separately and pleaded guilty this month.
Federal prosecutors in New York contend the scheme generated $3.5 million in illegal profits. The S.E.C. said the information led to $3.9 million in illegal profits.
“Deerfield is committed to maintaining a strict culture of compliance and the highest ethical standards,” Jonathan Gasthalter, a spokesman for Deerfield said in an emailed statement. “We are cooperating fully with the government’s investigation.”
Mr. Huber’s biography described him as a partner who “provides extensive research and analysis on individual companies operating in the health care industry.”
Barry Berke, his lawyer, said in a statement that Mr. Huber denied wrongdoing and that “his research was based on detailed and rigorous analysis as well as the type of information regularly and properly relied upon by institutional investors in evaluating health care and medical companies.”
A biography for Mr. Olan on Deerfield’s website described him as a “partner on the devices team at Deerfield since 2002.”
David Esseks, Mr. Olan’s lawyer, said, “Rob Olan is an innocent man and looks forward to clearing his name at trial.”
Marc Mukasey, a lawyer for Mr. Fogel, said his client was “resolving this issue and looking forward to the future.”
Mr. Blaszczak used a friend and former colleague, Christopher Worrall, a senior staff member at the Centers for Medicare and Medicaid Services, as his insider. Mr. Worrall would communicate “material, nonpublic information” about the agency’s rate decisions through text messages, telephone calls and meetings, including some at the agency’s offices, the S.E.C. said.
Mr. Blaszczak would pass the information to his hedge fund clients, sometimes within minutes of the communications, prosecutors said.
In email exchanges made public by federal prosecutors, Mr. Blaszczak and Mr. Worrall would exchange banter with clients about how much money they could make by collaborating. In one email exchange in 2014, Mr. Blaszczak told Mr. Worrall that they would “kill it working together.”
Mr. Worrall responded: “You’re like a drunk whore to me. Hard to resist. Lol. Let’s talk.”
A lawyer for Mr. Worrall, who was also charged, declined to comment. Mr. Blaszczak’s lawyer did not respond to a request for comment.
Mr. Blaszczak was paid $193,000 for his information over a year and a half, according to the S.E.C. Federal prosecutors said Mr. Blaszczak was paid $263,000 in consulting fees between 2012 and 2014.
His name surfaced this year in the trial of Stefan Lumiere, a former Visium Capital Management employee, in a securities fraud trial. Christopher Plaford, a witness at the trial, testified that Mr. Blaszczak had provided him with confidential information that he used to make trades in two stocks.
In January, Mr. Lumiere was convicted on securities fraud charges of mismarking assets held in a Visium portfolio. The charges against Mr. Lumiere arose from a broader investigation into allegations of insider trading at Visium, a hedge fund that shut its door in the aftermath of the investigation and charges. Mr. Lumiere is the former brother-in-law of the Visium founder Jacob Gottlieb.
In the Visium case, the authorities said that some at the hedge fund had received inside information about the approval process for drugs from a former Food and Drug Administration employee-turned-consultant.
“As the second political intelligence case brought by the S.E.C. and D.O.J., this case underscores the government’s focus on political intelligence firms and the need for investment professionals to closely monitor the sources of information that potentially emanates from government agencies,” said Antonia Apps, a former federal prosecutor who oversaw several big insider-trading cases and is now a partner at the law firm Milbank.
In the latest case, Mr. Worrall gave information to Mr. Blaszczak because of their friendship and in exchange for future employment or business opportunities, the S.E.C. said. The agency cited one example, in September 2011, when Mr. Blaszczak introduced his friend to a private health care policy firm, where Mr. Worrall then interviewed for a job. He did not take the job but used it as leverage to get a $10,000 raise.
In the communications cited by authorities, some of the men appeared to be aware that their success in milking inside tips to make money could be their undoing.
In one email exchange on July 1, 2013, Mr. Fogel and an unidentified co-conspirator discussed a trading strategy based on information from Mr. Blaszczak about Fresenius, a company that provides kidney dialysis, before an announcement. The unnamed person sounded a note of caution and urged the hedge fund managers not to “get too greedy” in acting on the information.
One day later, Mr. Fogel credited Mr. Blaszczak for the insight, adding, “Wish we didn’t wuss out but will still make a couple million on it.”
Mr. Fogel suggested Mr. Blaszczak get paid more for his insights: “Lets not get crazy but still. Way more valuable than the other dc clowns put together I think.”