Justice Department announces charges for alleged $149M in COVID-19 fraud

COVID-19 false billings and theft worth $149 million led to federal charges against 21 defendants across the United States, according the U.S. Department of Justice.

Investigators announced the charges as part of continuing effort with the Department of Health and Human Services and a number of federal agencies to prosecute COVID-19-related fraud.

“The Department of Justice’s Health Care Fraud Unit and our partners are dedicated to rooting out schemes that have exploited the pandemic,” Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division said in a press release. “Today’s enforcement action reinforces our commitment to using all available tools to hold accountable medical professionals, corporate executives, and others who have placed greed above care during an unprecedented public health emergency.”

The schemes took place in nine districts around the country.

Bogus claims

Several cases involved defendants who allegedly offered COVID-19 testing to induce patients to provide their personal identifying information and saliva or blood samples, then used the information for fraudulent Medicare claims, according to the Justice Department.

In the Central District of California, two owners of a clinical laboratory were charged with a health care fraud, kickback, and money laundering scheme for fraudulent billing of more than $125 million for phony COVID-19 and respiratory pathogen tests. The proceeds were allegedly laundered through shell corporations in the United States, transferred to foreign countries, and used to purchase real estate and luxury items.

In separate cases in the District of Maryland and the Eastern District of New York, owners of medical clinics allegedly obtained confidential information from patients seeking COVID-19 testing at drive-thru testing sites, then submitted fraudulent claims for office visits that did not occur.

Sham telehealth

In another scheme, defendants allegedly exploited policies that the Centers for Medicare and Medicaid Services (CMS) put in place to enable increased access to care during the COVID-19 pandemic.

In the Southern District of Florida, one medical professional was charged with a health care fraud, wire fraud, and kickback scheme for allegedly billing for sham telemedicine encounters that did not occur and agreeing to order unnecessary genetic testing in exchange for access to telehealth patients.

The CMS Center for Program Integrity separately announced an additional 28 administrative actions against providers for their alleged involvement in fraud, waste, and abuse schemes related to the delivery of care for COVID-19, and schemes that capitalize on the public health emergency.

Provider Relief Funds

Two defendants were charged for schemes targeting the Provider Relief Fund (PRF), part of the March 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act. In total, 10 defendants have been charged with crimes related to misappropriating PRF monies intended for frontline medical providers and three have pleaded guilty.

‘I’m taking the money, ha!’

Investigators announced charges against manufacturers and distributors of fake COVID-19 vaccination record cards.

In the Northern District of California, three defendants were charged in a scheme to sell homeoprophylaxis immunizations and falsify COVID-19 vaccination record cards to make it appear customers received authorized vaccines.

One defendant, a director of pharmacy at a northern California hospital, obtained real lot numbers for the Moderna vaccine to falsify COVID-19 vaccination record cards.

In a separate case in the Western District of Washington, one manufacturer was charged in the multistate distribution of fake COVID-19 vaccination record cards after allegedly telling an undercover federal agent,“until I get caught and go to jail, [expletive] it I’m taking the money, ha! I don’t care.”