The co-owner and operator of a Chicago-based laboratory company that operated COVID-19 testing sites during the pandemic faces federal charges that he defrauded a U.S. Department of Health and Human Services (HHS) agency out of more than $83 million with bogus or nonexistent testing.
Zishan Alvi, 44, of LabElite, was indicted by a federal grand jury on March 8 on 10 counts of wire fraud and one count of theft of government funds, according to the indictment from the U.S. Attorney’s Office for the Northern District of Illinois, Eastern Division. The business is referred to only as “Laboratory A” in the indictment.
Alvi is alleged to have devised a scheme to submit claims for PCR tests that weren’t performed for reimbursement under multiple federal programs set to pay for COVID-19 testing not covered under health insurance, including the Democrats’ Families First Coronavirus Response Act.
According to the indictment, his company often provided COVID-19 test results to customers for tests that were never conducted.
“The charges in this case allege that the defendant disregarded public health concerns in favor of personal financial gain. Doing so by compromising taxpayer-funded programs intended to fight the spread of coronavirus was particularly reprehensible,” Acting U.S. Attorney for the Northern District of Illinois Morris Pasqual said in a statement.
The Epoch Times attempted to reach Alvi for comment. His company left a message on its phone that it’s closed.
LabElite is one of several companies that partner with hundreds of pop-up COVID-19 testing sites across the United States. It’s among a string of Chicago-based testing labs that have been under investigation in the past year by various government agencies for their handling of COVID-19 test results.
Massachusetts, Nevada, Washington, Minnesota, and California are among more than a dozen states that have found companies to either be mislabeling tests, not following proper testing procedures, or collecting money and never providing results to the customers who paid for them.
Alvi is the first owner of COVID-19 testing labs with allegedly questionable practices to be criminally charged.
In addition to submitting for reimbursement for tests that were never taken, Alvi is accused of ordering his labs to cut corners and skip testing standards.
According to the indictment, an investigation found that his practices often led to providing customers with incorrect test results.
Court records show that Alvi submitted fraudulent claims for reimbursement of COVID-19 tests never conducted to the Health Resources and Services Administration (HRSA), an HHS agency, charged with administering the funds under the various federal COVID-19 reimbursement programs.
According to the indictment, Alvi also received funds from the Coronavirus Aid, Relief, and Economic Security Act, the Paycheck Protection Program, and the Health Care Enhancement Act, which were created under Biden’s 2021 $160 million COVID-19 funding initiative, called the American Rescue Plan.
“It is absolutely reprehensible that the defendant would use a public health crisis to allegedly defraud taxpayers and further put public health at risk by providing fraudulent COVID-19 test results,” Illinois Attorney General Kwame Raoul said in a statement.
Lucrative COVID-19 Black Market
A review of past and ongoing investigations into COVID-19 tests shows that a lucrative black market was created out of the government reimbursement program nearly since its inception.
Akbar Ali Syed and his wife, Aleya Siyaj, the listed owners of the Center for COVID Control, which has shut down amid a federal investigation into its operations, touted a million-dollar mansion and several luxury cars on their TikTok account before it disappeared, according to a USA Today report.
The Epoch Times was unable to reach Syed or Siyaj.
According to Centers for Disease Control and Prevention records, Northshore Clinical Labs, another Chicago-based testing company under federal investigation, received more than $160 million worth in federal reimbursements for its COVID-19 testing operations before having to shutter its operations.
The last listed owners of the company are brothers Hirsh and Gaurav Mohindra, and Omar Hussain. The Epoch Times was unable to reach any of the individuals for comment.
In 2016, the Mohindras were named as defendants in a Federal Trade Commission lawsuit against a ring accused of shaking down citizens for payments for nonexistent debts. The men surrendered $9 million in assets as part of a settlement with the FTC.
In 2019, Hussain was named in a similar FTC suit and later surrendered millions of dollars worth of assets as part of a settlement agreement with the government agency.
In the indictment against Alvi, the federal government lists in its forfeiture against him more than $83 million in assets, including a 2021 Bentley, a 2021 Lamborghini, along with other luxury cars, a $6 million bank account, and $800,000 in an E-Trade account.
COVID-19 testing has also led to other schemes.
Last August, the Federal Trade Commission reported that it discovered a scam involving offers of free COVID-19 tests to people on Medicare. The fraudsters would collect both personal and Medicare information under the scheme and then bill the federally-funded health insurance program for bogus test kits, the agency said.
In some of the cases, according to the FTC, the scammers would also bill Medicare for other bogus claims through the COVID-19 test scheme.
In just the past year, the FDA has sent more than 20 warning letters to various companies for their promotion of COVID-19 test kits that aren’t FDA approved.