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DOJ charges 14 people for alleged health-care fraud related to Covid-19

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Federal prosecutors charged 14 people in multiple fraud schemes that allegedly bilked consumers and insurers out of $143 million, the Department of Justice announced Wednesday.

In addition to those charged by DOJ, more than 50 medical providers are also facing administrative actions by the Center for Program Integrity and Centers for Medicare & Medicaid Services for their involvement in health care fraud schemes relating to Covid-19.

The DOJ’s Fraud Section, which leads the Medicare Fraud Strike Force, announced it is prosecuting cases in the following districts: Western District of Arkansas, Northern District of California, Middle District of Louisiana, Central District of California, Southern District of Florida, District of New Jersey and the Eastern District of New York.

“These medical professionals, corporate executives, and others allegedly took advantage of the COVID-19 pandemic to line their own pockets instead of providing needed health care services during this unprecedented time in our country,” Deputy Attorney General Lisa Monaco said. “We are determined to hold those who exploit such programs accountable to the fullest extent of the law.”

FBI Director Christopher Wray also said the agency is committed to combatting health-care fraud related to Covid-19.

The DOJ announcement also noted that the profits made from the fraudulent schemes were allegedly laundered through shell corporations and used to purchase exotic cars and luxury real estate.

After Covid-19 was recognized as a national emergency, telehealth regulations were broadened to give Medicare beneficiaries greater access to a wider range of services to avoid risky travel to health-care sites. The accused allegedly exploited these regulation expansions to submit fraudulent claims to Medicare for telemedicine encounters that never happened, according to the DOJ.

In Arkansas, a man who owns two testing laboratories was charged with health-care fraud in connection to an alleged scheme to defraud the U.S. of more than $88 million. The man allegedly used access to beneficiary and medical provider information from prior lab testing orders to submit hundreds of fraudulent claims for urine, drug and other tests. Some of the falsely submitted claims were for beneficiaries that were already dead.

A doctor in New Jersey allegedly ordered expensive and medically unnecessary cancer genetic testing for Medicare beneficiaries that attended a Covid-19 testing advertising event that he participated in. The man also allegedly billed Medicare for services to beneficiaries that he never provided, totaling about $19 million in health-care fraud schemes.

Another man in the state who was a partner at a diagnostic testing lab allegedly offered kickbacks in exchange for respiratory tests that were improperly bundled with Covid tests and billed to Medicare. The man allegedly paid and received bribes in a scheme totaling $5.4 million.

In New York, charges were brought against two people who owned several pharmacies and sham pharmacy wholesaling companies for allegedly committing health-care fraud, wire fraud and money laundering totaling $45 million. The two and their co-conspirators allegedly acquired billing privileges for multiple pharmacies. They also allegedly submitted fraudulent claims to Medicare by abusing emergency Covid-19 rules to avoid otherwise applicable limits on refills for expensive drugs.

The report claims the defendants “allegedly used an elaborate network of international money laundering operations to conceal and disguise the proceeds of the scheme.”

“Medical providers have been the unsung heroes. … It’s disheartening that some have abused their authorities,” Wray said.

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