Justice Department Charges 18 in Sweeping COVID Fraud Action

Federal officials have charged 18 people in a wide-ranging series of COVID fraud cases.

The defendants are accused of taking part in a variety of schemes to exploit healthcare services during the pandemic, and allegedly led to more than $490 million in COVID-19 related false billings to and theft from federally funded pandemic programs, the Department of Justice (DOJ) said in a Thursday (April 20) news release.

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

“As today’s enforcement action demonstrates, HHS-OIG and our partners remain steadfast in our commitment to protecting critical public health measures from fraud.”

According to the release, the prosecutions include “first-of-their-kind” charges against suppliers of COVID-19 over-the-counter tests.

These defendants are accused of exploiting the government’s free test kit program and repeatedly supplying patients — or in some cases, patients who had died — with dozens of tests they didn’t want or need.

Among the other people charged were a California lab owner accused of submitting more than $358 million in bogus insurance claims. The DOJ says the lab performed legitimate COVID screening for nursing homes and schools, but also added claims for additional unwanted or unneeded testing to increase its reimbursements.

Also in California, a doctor is accused of defrauding the government’s uninsured program for $230 million, billing for services that were never performed or weren’t medically necessary. This doctor was the second highest biller in the program, the DOJ said.

The charges come weeks after the White House announced it was seeking congressional approval for a $1.6 billion plan to deal with COVID-related fraud.

The proposal would prosecute people who committed fraud related to the government’s pandemic relief funds, while also establishing protections for identity theft victims.

A report late last year from Congress uncovered tens of billions of dollars in losses related to fraud in the Paycheck Protection Program (PPP).

Unveiled after the pandemic, PPP offered businesses with fewer than 500 employees low-interest loans of up to $10 million. As we wrote last year, many of these loans were forgivable, but many businesses receiving them turned out to be ineligible or fraudulent.

“The FinTechs facilitating these loan transactions did not have in place the proper controls to mitigate the impact of these bad actors; or were perhaps blinded by the fees they were reaping, which in certain cases exceeded $1 billion,” PYMNTS wrote.