CHICAGO — This is an official press release from the U.S. Department of Justice (Federal Bureau of Investigation (FBI)), published as received.
CHICAGO — A suburban Chicago man has been indicted by a federal grand jury on ten counts of wire fraud and one count of theft of government funds for purportedly submitting fraudulent claims for reimbursement on tests which were never performed, were performed improperly, or were already paid for by the client.
ZISHAN ALVI, 44, of Inverness co-owned and operated Laboratory A, a laboratory located in Chicago, Illinois. Laboratory A purported to perform testing to detect for SARS-CoV-2 and offered two types of COVID-19 testing: PCR tests and antigen tests that delivered results within approximately 15 minutes (“rapid tests”). Laboratory A also offered a service where individuals and companies could pay a fee to receive COVID-19 PCR test results in an expedited fashion.
The Health Resources and Services Administration (“HRSA”) was an agency of the U.S. Department of Health and Human Services that oversaw and administered the funds appropriated through federal legislation to cover the costs of COVID-19 testing for individuals without health insurance coverage (“the HRSA Uninsured Program”). As indicated in the indictment, Laboratory A enrolled in the HRSA Uninsured Program in or around December 2020.
From approximately February 2021 through February 2022, Alvi along with others, are alleged to have knowingly devised, intended to devise, and participated in a scheme to defraud the government by causing Laboratory A to submit fraudulent claims and delivering inaccurate and unreliable test results to the public. The fraudulent claims sought reimbursement for purported tests when Alvi knew that (a) Laboratory A had not performed a test for COVID-19; (b) Laboratory A had modified a test for COVID-19 such that the results were unreliable; and (c) Laboratory A already had collected payment from the individuals who purportedly had been tested.
The indictment further alleges that Alvi caused Laboratory A to provide negative test results to be released to individuals who had provided a specimen for testing, but for whom a COVID-19 test had not been performed. It is alleged that Alvi directed Laboratory A employees to falsely indicate in Laboratory A’s records that COVID-19 tests had been performed for these individuals, when Alvi knew that the test specimens had been discarded at his own direction and had not been tested. It is further part of the scheme that, in order to conceal the fact that tests were not performed, Laboratory A did not release positive COVID-19 results on specimens where tests were eventually performed, because a purported negative result had already been released.
It was further part of the scheme that, to reduce costs and increase Laboratory A’s profits, Alvi directed Laboratory A employees to alter Laboratory A’s PCR testing method by using less of the materials necessary to process the PCR test, including the reagents, knowing that this made the test results unreliable.
During its operation, Laboratory A obtained over $83 million from the HRSA Uninsured Program as payment for COVID-19 tests purportedly performed by Laboratory A. Alvi is alleged to have transferred some of the fraudulently obtained HRSA funds from Laboratory A’s accounts to a personal account, and to have used the funds for personal expenditures, including for vehicle purchases and investments in stocks and cryptocurrency. The indictment seeks forfeiture from the defendant of at least $6.8 million in alleged ill-gotten gains, in addition to five luxury vehicles and funds from other trade and investment accounts.
The indictment is announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois; Robert W. Wheeler, Jr., Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Mario Pinto, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General; and Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. Substantial assistance was provided by the Illinois Attorney General’s Office. The government is represented by Assistant U.S. Attorneys Jared Hasten, Misty Wright, and Trial Attorney Claire Sobczak from the Department of Justice’s Health Care Fraud Unit.
“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” said Acting U.S. Attorney Pasqual. “I commend the work of our law enforcement partners who investigated this complex fraud scheme. Our office will relentlessly continue to bring to justice those who defrauded the government’s pandemic relief initiatives.”
"The defendant defrauded the American people at a time when we were most vulnerable, in the midst of a global pandemic. This indictment shows that the FBI along with our law enforcement partners is continually working to keep Americans safe and uphold the Constitution as our mission demands of us," said Special Agent in Charge Wheeler.
“The defendant’s alleged conduct resulted in money unjustly obtained from Federal programs established during the COVID-19 pandemic to keep Americans safe, and also placed patients at risk through his role in the release of false COVID-19 test results,” said Special Agent-in-Charge Pinto. “Our agency is committed to working with our law enforcement partners to ensure that those who defraud our federal health care programs and place patients at risk of harm are held accountable.”
“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,” Attorney General Kwame Raoul said. “I want to thank the United States Attorney for the Northern District of Illinois, the Chicago Office of the Federal Bureau of Investigation, the U.S. Department of Health and Human Services Office of the Inspector General, and all of the law enforcement partners working to hold those who perpetrated this scheme accountable.”
The public is reminded that an indictment contains only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count of wire fraud is punishable by up to 20 years in federal prison, and the count of theft of government funds is punishable by up to 10 years in federal prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
