21 defendants charged in alleged $149 million COVID-19 fraud schemes

Federal prosecutors on Wednesday announced charges against 21 defendants for their alleged involvement in COVID-19 fraud schemes that resulted in over $149 million in losses. Physicians, marketers and medical businesses across nine U.S. federal districts are among those facing charges in what officials said are "some of the largest and most wide-ranging pandemic frauds detected to date."

Several cases of those announced Wednesday involve defendants accused of offering COVID-19 testing to prompt patients to provide personal information and a saliva or blood sample, the Department of Justice said. Defendants then allegedly used the samples and information to submit false and fraudulent claims to federal health insurance for tests or services that were unrelated, medically unnecessary and significantly more expensive. 

In a scheme of this kind, two owners of a California clinical laboratory are accused of fraudulently billing more than $214 million laboratory tests as well as over $125 million in fraudulent COVID-19 claims and respiratory pathogen tests, the DOJ said.

In other cases, owners of medical clinics in Maryland and New York allegedly obtained confidential information from patients who sought COVID-19 tests at drive-thru testing sites and submitted fraudulent claims for long office visits that never happened, investigators said. The proceeds then were allegedly laundered through U.S. shell corporations, transferred to foreign countries and used to buy luxury items and real estate. 

Additional types of schemes announced Wednesday include the alleged exploitation of policies established to boost access to care during the pandemic, the misappropriation of COVID-19 funds intended for frontline medical providers and the distribution of fake COVID-19 vaccination cards.

In one instance, according to the Justice Department, the pharmacy director of a California hospital obtained real lot numbers for vials of the Moderna vaccine and used them to falsify COVID-19 vaccination cards. In another case, a Washington manufacturer allegedly told an undercover federal agent "until I get caught and go to jail, [expletive] it I'm taking the money, ha! I don't care."

Assistant director Luis Quesada of the FBI's Criminal Investigative Division called the defendants' actions "unacceptable."

"These health care fraud abuses erode the integrity and trust patients have with those in the health care industry, particularly during a vulnerable and worrisome time for many individuals," Quesada said in a statement. 

In connection with the charges, the DOJ said it also seized more than $8 million in cash "and other fraud proceeds." Multiple federal agencies vowed to crack down further on fraudulent providers.

In:
• COVID-19
• Fraud
• United States Department of Justice