Feds Charge 21 In Sweeping Covid Fraud Crackdown

Topline

The Department of Justice announced charges Tuesday against 21 defendants accused of participating in pandemic fraud schemes ranging from making counterfeit vaccination cards to selling fake homeopathic Covid-19 cures, allegedly leaving the federal government with more than $149 million in losses, in the latest string of Possible attempts to fraudulently profit from the pandemic.

Key Facts

Clinical laboratory owners Lourdes Navarro and Imran Shams of California were charged with conspiracy to commit health care fraud and other offenses, for allegedly plotting to fraudulently bill Medicare for over $214 million in lab tests, laundering some of the proceeds through real estate and luxury purchases, the DOJ announced.

Navarro and Shams—who was legally excluded from participating in Medicare prior healthcare-related criminal convictions—allegedly following Medicare claims for unnecessary Covid-19 and respiratory pathogen tests, paying kickbacks to accomplices who obtained specimens and test orders used to help justify some of those claims, prosecutors said.

Nurse practitioner Elizabeth Mercedes Hernandez of Miami was charged in a scheme that resulted in over $134 million in fraudulent Medicare claims: She claimed signed numerous doctor’s orders for unnecessary tests and equipment that were used to justify fraudulent Medicare claims for the benefit of co-conspirators, in exchange for which she received payments for telemedicine consultations she never actually performed, taking advantage of Medicare’s relaxed Covid-era telemedicine rules.

Robert Van Camp of Colorado was charged with conspiracy to defraud the US and trafficking in counterfeit goods after selling hundreds of fake record vaccination cards for as much as $175 apiece to buyers and distributors in at least 12 states, disguising his activities by referring to them as restaurant cards or gift cards.

Three defendants from California and Texas were charged with participating in an alleged plot to sell a phony homeopathic Covid-19 cure and distribute fake vaccination cards, some of which were filled in using numbers from actual batches of Covid-19 vaccines.

Other defendants included a healthcare business owner who allegedly submitted fraudulent requests for federal Covid-19 relief funding that he spent on himself and others, a healthcare center CEO who allegedly planned to submit over $1.5 million in fraudulent Medicare claims for Covid-19 tests and a US Postal Service employee who allegedly designed and sold 400 fake vaccination cards.

Key Background

Passed in spring 2020, the $953 billion CARES Act Paycheck Protection Program (PPP) was established to assist businesses struggling amid the pandemic to cover payroll expenses and rehire laid-off workers through low-interest loans. In December, the Secret Service announced almost $100 billion in funds from various pandemic relief programs had been stolen. Many alleged Covid-19 fraudsters simply submitted PPP claims using inflated staff numbers and payroll expenses. Others, however, concocted more elaborate schemes: Dog breeder Luke Pierre Jr. of Florida was intended to two years in prison after obtaining a fraudulent PPP loan, $100,000 of which he transferred to a co-conspirator disguised as a payment for dog “stud fees.” Within roughly the first year of the pandemic, the DOJ charged nearly 600 defendants in connection to Covid-19 fraud, the department said. Though a special DOJ Covid-19 Enforcement Task Force was established in May to investigate pandemic-related crimes, the department has operated a general health care fraud investigation network since 2007, which has brought Medicare fraud charges against over 4,200 defendants.

Surprising fact

Van Camp allegedly bragged to an undercover federal agent that he had sold fake vaccination cards to three Olympic athletes and their coach, remarking that, “until I get caught and go to jail, f— it, I’m taking the money! I don’t care.”

Crucial Quote

“Throughout the pandemic, we have seen trusted medical professionals orchestrate and carry out egregious crimes against their patients all for financial gain,” FBI Criminal Investigative Division Assistant Director Luis Quesada said in a statement. “These healthcare fraud abuses erode the integrity and trust patients have with those in the healthcare industry, particularly during a vulnerable and worrisome time for many individuals.”

Big Number

$8 million. That’s how much the DOJ seized in cash and other fraud proceeds connected to Tuesday’s charges, the department said.

Further reading

“$100K In Dog ‘Stud Fees’? Covid Fraudsters Get Creative Covering Up Theft” (Forbes)

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