Feds Charge Man Who Allegedly Profited From Fraudulent COVID-19, Cancer Testing Claims

March 30, 2020 Updated: March 31, 2020

Federal prosecutors have charged a Georgia man for his alleged role in a scheme to defraud federal and private health care benefit programs by submitting fraudulent testing claims for COVID-19 and genetic cancer screenings.

Erik Santos, 49, has been accused of soliciting and receiving kickbacks from unnecessary medical testing, including COVID-19 tests, according to the Justice Department (DOJ). He has been charged with one count of conspiring to violate the Anti-Kickback Statute—which carries a maximum penalty of five years in prison—and one count of conspiring to commit health care fraud, which carries a maximum penalty of 10 years in prison. Both offenses also carry a $250,000 fine.

“The complaint in this case describes a defendant who saw the spread of COVID-19 as nothing more than an opportunity to profit personally,” U.S. Attorney Craig Carpenito said in a statement.

“As the complaint alleges, he offered kickbacks in exchange for medically unnecessary tests–including potentially hard-to-obtain COVID-19 tests–thus preying on people’s fear in order to defraud the government and make money for himself,” he added.

Prosecutors alleged that the large scale scheme dated back to November 2019, which was formed to defraud the federally funded Medicare program, which provides medical insurance benefits for individuals 65 and older and certain disabled individuals. Santos, who ran a marketing company that brought people to testing companies, received kickback payments for referring individuals who were eligible for testing that Medicare would reimburse, court documents alleged.

Santos initially profited from being paid kickbacks for submitting genetic cancer screening tests to diagnostic testing facilities, regardless of medical necessity, prosecutors said. The agreement expanded to include COVID-19 testing after February 2020, which were often bundles with more expensive respiratory tests.

This was during a time when the country and the world were concerned about the CCP (Chinese Communist Party) virus pandemic that had devastated lives and economies worldwide.

“Santos sought to maximize his kickback profits and to bleed federal health care resources at a time when Medicare beneficiaries across the United States were in dire need of coverage for medical treatment and services,” the DOJ alleged, adding that Santos’s scheme aimed to submit more than $1.1 million in fraudulent claims to Medicare.

Prosecutors said Santos explained how he viewed the pandemic as a money-making opportunity in a telephone call on March 19.

“[W]hile there are people going through what they are going through, you can either go bankrupt or you can prosper,” Santos allegedly said during the call. In the same call, he also noted that his other work was on hold because “everybody has been chasing the Covid dollar bird.”

Special Agent-in-Charge Gregory Ehrie of FBI Newark compared the scheme to “receiving blood money.”

“It is unfortunate that we have people in our country who will capitalize on others’ suffering to make a buck,” Ehrie said. “This defendant not only allegedly defrauded the government, he conspired to bilk his fellow citizens of a valuable resource that’s in high demand.”

Attorney General William Barr instructed U.S. attorneys nationwide on March 16 to prioritize prosecutions and investigations of scammers, fraudsters, and cybercriminals who are seeking to take advantage of the public panic over the CCP virus, commonly known as novel coronavirus, outbreak.

He told federal prosecutors to “prioritize the detection, investigation, and prosecution of all criminal conduct related to the current pandemic.”

“The pandemic is dangerous enough without wrongdoers seeking to profit from public panic, and this sort of conduct cannot be tolerated,” Barr said in the memo.

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