A man accused of orchestrating an $83.6 million fraudulent COVID-19 testing scheme in Chicago is out on bond after offering the deed to his 5,600-square-foot suburban home as collateral. Prosecutors are seeking forfeiture of the luxury cars, bank accounts, and funds related to Zishan Alvi’s case.
Alvi, 44, of Inverness, is a co-owner and operator of LabElite, a laboratory that allegedly submitted fraudulent claims for COVID-19 testing services under the U.S Department of Health and Human Resources’ uninsured program. The program is designed to cover the costs of COVID-19 testing for individuals without health insurance.
According to prosecutors, Alvi’s lab sought reimbursement for tests that were either never performed, done incorrectly, or already paid for by the client. The lab also offered a service that allowed individuals and companies to pay for expedited COVID-19 PCR test results. An indictment filed by prosecutors showed that the lab submitted inaccurate and unreliable test results and subjected the public to inaccurate claims on the efficacy of the testing procedures.
Prosecutors said Alvi provided negative COVID-19 test results that were falsely released and delivered to people who didn’t have their specimens tested, with lab employees directed to misrepresent lab records that falsely indicated that the tests had been performed, knowing well that the test specimens had been discarded or were unreliable. To cover up the fact that some specimens had not been tested, the lab did not release positive COVID-19 results even when tests were eventually performed.
As a result, the lab collected more than $83.6 million from the HRSA Uninsured Program. The scheme grossly exploits the public and anyone trying to get access to health care services during the pandemic, prosecutors argue.
“The charges in this case allege that the defendant disregarded public health concerns in favor of personal financial gain,” Acting U.S. Attorney Morris Pasqual said in a statement. “Doing so by compromising taxpayer-funded programs intended to fight the spread of coronavirus was particularly reprehensible.”
Alvi now faces ten counts of wire fraud and one count of theft of government funds. Each count of wire fraud is punishable by up to 20 years in federal prison, while the count of theft of government funds is punishable by up to 10 years in federal prison.
During a preliminary hearing, Alvi’s defense team argued for his release on bond, citing his lack of a prior criminal history and strong community ties as good reasons why he should remain free. After weeks of courtroom appearances, the judge set Alvi’s bond at $10 million, which he posted by putting his home in suburban Chicago as collateral.
Additionally, prosecutors want to seize several luxury cars, including the 2021 Mercedes-Benz GLB 250, 2021 Land Rover Range Rover HSE, 2021 Lamborghini Urus, 2021 Bentley, and 2022 Tesla X, all of which are in Alvi’s possession.
Prosecutors are also seeking the seizure of $6.8 million in one bank account, $810,000 in an E*Trade account, $500,000 in a Fidelity Investments account, and $245,814 in a Coinbase account.
Alvi’s attorney, Murdoch Walker, did not respond to an email or a voicemail seeking comment. Meanwhile, Alvi has vowed to fight the charges against him and prove his innocence.
“We just got to fight this and prove my innocence,” Alvi said. “The truth always comes out.”
Aside from Alvi’s case, healthcare organizations worldwide have been battling fraudsters who take advantage of the COVID-19 pandemic to make quick money through fraudulent testing schemes. The pandemic has presented fraudulent opportunities for cybercriminals, with numerous cases of phony websites and counterfeit medical supplies sold to unsuspecting healthcare facilities.
American healthcare facilities have not been exempt from these fraudulent activities. In October 2020, the Department of Health and Human Services reported that its Office of Inspector General had worked to halt a COVID-19 testing fraud scheme in Texas. The scheme involved an illegal operation that provided fraudulent COVID-19 testing services and had defrauded the government of more than $1.6 million.
Moreover, in December 2020, the Department of Justice filed a criminal complaint against a group of individuals who allegedly participated in a scheme that allowed more than 100 travellers to bypass mandatory COVID-19 testing at Hawaii airports. The scheme involved providing negative test results generated by a California laboratory, and later identified as fraudulent.
In July 2020, the US Attorney’s Office for the Eastern District of New York charged VitalMed Laboratories and its CEO, Michael Gurry, with conspiracy to commit wire fraud and violating the Anti-Kickback Statute through running fraudulent national COVID-19 testing programs.
There has also been an increase in counterfeit personal protective equipment since the onset of the COVID-19 pandemic. The US Customs and Border Protection seized nearly $300,000 worth of counterfeit N95 respirators at various ports of entry in August 2021.
In conclusion, the COVID-19 pandemic has presented ample opportunities for fraudsters to take advantage of the unsuspecting public and governments, costing taxpayers billions of dollars worldwide. As the pandemic rages on, law enforcement agencies will continue to crack down on fraudulent activities that exploit healthcare programs designed to protect the public.
It is essential to maintain vigilance against scams and frauds, especially as health care facilities continue to grapple with surging infections and other COVID-19-related challenges. Individuals need to educate themselves on the various fraudulent practices associated with the pandemic, such as emails offering vaccination opportunities or COVID-19 financial relief benefits. Only then can people protect themselves from these fraudulent activities and avoid becoming unsuspecting victims.
