The alleged ringleader is Terrence Williams, who was drafted by the Nets in 2009.
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Authorities say he devised way to defraud a supplemental health plan for active and retired players and roped in a slew of others to submit false claims "for reimbursement of expenses for medical and dental services that were not actually rendered."
They allegedly submitted false or fraudulent claims totaling nearly $4 million, from which the ex-players took in about $2.5 million
The records submitted by the ex-players "described medical and dental services that were not in fact provided," the indictment said.
"Really, this is a garden variety insurance fraud wire fraud scheme, we see dozens of them everywhere, every year all the time. What really sets it apart is the people who participated in it," said Gil Soffer, ABC7 legal analyst and former federal prosecutor. "It's a pretty brazen scheme, it's pretty simple and it seems easily proven."
Several former Bulls are among those charged, including Charles "CJ" Watson, Eddie Robinson and Shannon Brown. Brown is also a native of the Chicago area, playing high school basketball at Proviso East.
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Ex-NBA players arrested: Full press conference
Others with Chicago area ties include Tony Allen and Will Bynum, who both played at Crane High School and Melvin Ely, who played high school at Thornton.
The ABC7 I-Team learned Bynum has been arrested by the Chicago FBI at his home in suburban Wood Dale, while Ely was arrested by the FBI at his home in suburban Matteson. Both were released Thursday afternoon on $250,000 bond.
The remaining players charged are: Sebastian Telfair, Glen "Big Baby" Davis, Darius Miles, Alan Anderson, Christopher Douglas-Roberts, Milton Palacio, Ruben Patterson, Greg Smith, Antoine Wright and Tony Wroten.
Allen was a six-time All-Defensive team selection and a member of the 2008 champion Boston Celtics. His wife, Desiree Allen, was also indicted. For the most part, though, the ex-players charged had journeyman careers playing for several different teams and never reached anywhere close to the enormous stardom or salary that top players command.
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Another former player charged in the scheme was Sebastian Telfair, a one-time high school star in New York who was highly touted when he turned pro, though his NBA career with eight franchises never brought the stardom some had expected.
The fraudulent invoices were created by a chiropractic office in Encino, California; two dentist offices in Beverly Hills; and a wellness office in Washington state.
The indictment named none of the offices allegedly involved, and they were not charged.
The Associated Press contributed to this report