14 Hit With Federal Charges In COVID Healthcare Fraud Scams

By - May 1, 2021
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The Department of Justice (DOJ) charged 14 people this week in several COVID-related healthcare fraud scams that may have bilked insurers and consumers out of at least $143 million.

Some of those charged with federal healthcare fraud include a medical doctor, laboratory owners, pharmacies, and home health agencies.

Also, the Center for Program Integrity at the Centers for Medicare & Medicaid Services stated it took administrative action against at least 50 healthcare providers for their involvement in healthcare fraud scams related to the pandemic.

The fraud section at the Department of Justice, which heads the Medicare Fraud Strike Force, stated that it’s going to prosecute cases in these districts:

  • Northern District of California
  • Middle District of Louisiane
  • Central District of California
  • Southern District of Florida
  • District of New Jersey
  • Eastern District of New York
  • Western District of Arkansas

Depute Attorney General Lisa Monaco told the press that these medical professionals and others took advantage of the COVID pandemic to steal money from the public when they should have provided desperately needed healthcare services. DOJ is determined to hold these people accountable to the fullest extent of federal law.

FBI Director Chris Ray also said his agency would continue to fight COVID healthcare fraud, noting that most medical providers have made heroic efforts during the pandemic, but a few have abused their positions.

Defendants Engaged In Variety of Healthcare Fraud Scams To Defraud The Government During COVID

The DOJ stated that several defendants provided COVID tests to Medicare recipients at assisted living facilities, drive-throughs, and medical offices to encourage patients to give their personal information and a blood or saliva sample.

The defendants then allegedly misused this information and samples and turn in Medicare claims for medically unnecessary, expensive lab tests, such as allergy testing, cancer genetic testing, and respiratory pathogen panel tests.

Then, the defendants took the proceeds from the COVID scams, laundered it through phony corporations, and bought luxury real estate and expensive sports cars.

In another case, one defendant used telehealth regulation expansions to turn in fake claims to Medicare for telemedicine appointments that didn’t happen. Telehealth regulations were expanded after COVID was seen as a national emergency to provide Medicare patients more access to healthcare services to avoid unnecessary travel.

Other federal healthcare fraud cases related to COVID-19 that the DOJ is prosecuting include:


The owner of two testing labs was charged with healthcare fraud related to a scam to defraud the US government of $88 million. He allegedly used access to medical provider and beneficiary information from lab testing orders to submit dozens of phony claims for drug and urine tests.

Some of the fake claims were for patients who had already died.

New Jersey

A doctor ordered medically unnecessary and expensive genetic tests for Medicare patients who attended a COVID testing center in which he participated. He also allegedly billed Medicare for medical services he didn’t provide, for a total of almost $19 million in fraudulent charges.

Another man in New Jersey who owned a diagnostic testing lab offered kickbacks in exchange for respiratory pathogen tests illegally bundled with COVID-19 tests and billed to the US government and Medicare. He allegedly received bribes in the scam for at least $5.4 million.


An LA home health agency owner is accused of stealing $200,000 from federal programs by spending disaster relief loans for his purposes. The funds were intended to be used by patients and support healthcare businesses struggling during the pandemic.

New York

The Department of Justice filed federal charges against two men who owned several pharmacies and allegedly committed healthcare fraud, wire fraud, and money laundering for about $45 million.

The two men and several co-conspirators got billing privileges for several pharmacies and submitted fake claims to Medicare by taking advantage of COVID-19 rules to skirt normal limits on refills for expensive drugs.

The DOJ noted the accused used several international money laundering operations to hide the proceeds from the scam.

Recent Federal Charges Date Back To Early Months of COVID-19 Pandemic

The charges announced this week by the federal government go back more than a year when COVID first broke out in the US. At that time, there was high demand for COVID tests but not enough supply.

Also, Medicare loosened its strict policies on remote medical consultations so more patients could see doctors without having to leave home. Also, the US government put billions into provider relief payments to help doctors and healthcare facilities stay in business. Unfortunately, many scam artists took advantage of these changes.

Experts say that fraud against Medicare and Medicaid is a constant problem, to the tune of tens of billions of dollars per year.

Part of the issue is that Medicare must pay medical bills quickly to medical providers. This means money may be sent out before the agency flags the possibly fraudulent transactions. The problem grew exponentially during the pandemic.

However, the federal government is cracking down on COVID-19 healthcare fraud, as Attorney General Merrick Garland announced last week establishing a new task force to fight COVID fraud.

COVID-19 Fraud Rampant For More Than A Year

COVID-19-related fraud has been a growing problem since the pandemic hit American shores in early 2020. Much of it has been healthcare fraud, but there are other examples.

Some of the fraud has been related to the $525 billion Paycheck Protection Program that was enacted as part of the CARES Act in 2020.

Other fraud has involved Personal Protective Equipment or PPE as medical providers have been in short supply of this equipment during the pandemic.