Suburban man facing federal charges in 'reprehensible' COVID-19 testing fraud scheme
INVERNESS, Ill. - A man from northwest suburban Inverness who owned a COVID-19 testing lab in Chicago is facing federal charges for his alleged role in a COVID-19 testing fraud scheme.
From February 2021 through February 2022, Zishan Alvi and others submitted reimbursement claims to a federal program for COVID-19 tests that were never performed, conducted improperly or that had already been paid for by a client, prosecutors said.
During its operation, Labratory A, which was co-owned by Alvi, obtained more than $83 million from the program. Alvi allegedly transferred some of the funds to his personal account and used the money for vehicle purchases and investments in stocks and cryptocurrency.
Alvi, 44, is charged with 10 counts of wire fraud and one count of theft of government funds, the U.S. attorney’s office for the Northern District of Illinois said in a statement.
Laboratory A was enrolled in the Health Resources and Services Administration Uninsured Program, which used federal funds to help cover the cost of COVID-19 testing for those without insurance. The lab claimed to perform PCR tests and antigen rapid tests.
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But prosecutors allege that the lab told some patients that their COVID-19 test had come back negative when no test had been performed. Alvi allegedly directed employees to modify records to show that tests were being done when he knew that specimens were actually being discarded.
To help hide the scheme, the lab didn’t release positive COVID-19 results on some specimens that were eventually tested because the lab had already told clients of the false negative result, prosecutors said.
Alvi also allegedly told his employees to alter the lab’s PCR testing method by using less of the materials needed for a reliable result in order to reduce costs and increase profits.
"The charges in this case allege that the defendant disregarded public health concerns in favor of personal financial gain," acting U.S. Attorney Morris Pasqual said in a statement. "Doing so by compromising taxpayer-funded programs intended to fight the spread of coronavirus was particularly reprehensible."
The indictment seeks forfeiture of at least $6.8 million from Alvi, in addition to five luxury vehicles and funds from trade and investment accounts.
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.