18 charged with COVID-19 fraud schemes

Federal prosecutors have brought charges against 18 people, including doctors and owners of medical businesses, for defrauding the government of more than $490 million that was to go toward fighting the COVID-19 pandemic.

Justice Department officials said the law enforcement action was the largest ever to target healthcare schemes that exploited the pandemic, resulting in charges laid against 18 defendants in nine federal districts and more than $16 million in cash seized.

"The Justice Department will not tolerate those who exploited the pandemic for personal gain and stole taxpayer dollars," Attorney General Merrick Garland said Thursday in a statement announcing the charges.

"This unprecedented enforcement action against defendants across the country makes clear that the department is using every available resource to combat and prevent COVID-19-related fraud and safeguard the integrity of taxpayer-funded programs."

Among the schemes that brought charges Thursday was one involving multiple defendants seeking to defraud a federal program of funds set aside to cover COVID-19 testing and treatment for the uninsured.

According to prosecutors, a California doctor described as the second-highest biller to the Health Resources and Services Administration COVID-19 Uninsured Program attempted to defraud it of some $230 million by submitting fake claims for uninsured patients for services that were not rendered.

Court documents state that he is accused of using more than $100 million of the ill-gotten money for high-risk options trading. He has also been charged along with two other people for submitting more than 70 fraudulent loan applications through the Paycheck Protection Program and the Economic Injury Disaster Loan Program.

Another scheme saw a California lab owner submitting more than $358 million in false and fraudulent claims to Medicare, the Health Resources and Services Administration and private insurance companies for laboratory testing.

Prosecutors said the lab, which performed COVID-19 screening testing for nursing homes and other similar facilities and grade schools, added claims for tests that were not needed.

"Exploiting the COVID-19 pandemic and viewing the public health emergency as an opportunity to steal money and resources from federal healthcare programs shows a clear disregard for the well-being and safety of those who rely on government-funded healthcare services," Inspector General Christi Grimm of the Department of Health and Human Services Office of the Inspector General, said in a statement.

Prosecutors added that charges, which are the first of their kind, were laid against suppliers of COVID-19 over-the-counter tests, which Medicare began to cover in April of last year.

Manufacturers and distributors of fake COVID-19 vaccination record cards, which were used to circumvent federal vaccination efforts, were also among those hit by charges Thursday, including three medical professionals at a small New York midwife practice who distributed nearly 2,700 of the forged COVID-19 vaccination cards.

"During the COVID pandemic, programs were put in place to help the American people, and we will continue to ensure that the individuals that took advantage of those programs face justice," Assistant Director Luis Quesada of the FBI's Criminal Investigation Division said.