The Justice Department brought charges against medical professionals and owners of medical businesses for a variety of fraud schemes involving false billings.
The Department of Justice (DOJ) has charged 18 defendants in nine federal districts across the United States for their alleged participation in health care fraud schemes that exploited the COVID-19 pandemic and allegedly resulted in more than $490 million in COVID-19 related false billings to federal programs and theft from federally funded pandemic programs. As part of the investigation and enforcement action, the DOJ also seized more than $16 million in cash and other proceeds.
“The Justice Department will not tolerate those who exploited the pandemic for personal gain and stole taxpayer dollars,” said Attorney General Merrick B. Garland in the announcement. “This unprecedented enforcement action against defendants across the country makes clear that the Department is using every available resource to combat and prevent COVID-19 related fraud and safeguard the integrity of taxpayer-funded programs.”
Multiple defendants were charged with defrauding the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program, which was designed to prevent the further spread of the pandemic by providing access to uninsured patients for testing and treatment. The program, which ended operation after the exhaustion of funding, was also designed to provide financial support to health care providers fighting the COVID-19 pandemic by reimbursing them for services provided to uninsured individuals.
“Exploiting the COVID-19 pandemic and viewing the public health emergency as an opportunity to steal money and resources from federal health care programs shows a clear disregard for the well-being and safety of those who rely on government-funded health care services,” said Inspector General Christi A. Grimm of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “As today’s enforcement action demonstrates, HHS-OIG and our partners remain steadfast in our commitment to protecting critical public health measures from fraud.”
Criminal charges were brought against:
- Lourdes Navarro, 64, of Glendale, Calif., in a superseding indictment with conspiracy to commit health care fraud and wire fraud, health care fraud, conspiracy to commit money laundering, and making false statements, in connection with the operation of Matias Clinical Laboratory, Inc. (Matias), also known as Health Care Providers Laboratory, a laboratory she operated, controlled, and managed with her husband Imran Shams. Navarro was previously charged in an indictment returned in April 2022. The superseding indictment adds allegations that Navarro conspired with Shams and carried out a scheme to submit false and fraudulent claims to Medicare, the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program, and an insurance company for respiratory pathogen panel (RPP) testing that was not ordered, medically unnecessary, procured through illegal kickbacks and bribes, and ineligible for reimbursement.
During the COVID-19 pandemic, Matias performed COVID-19 screening testing for a variety of clients, including nursing homes, rehabilitation facilities, assisted living facilities, and similar facilities with vulnerable elderly populations, as well as primary and secondary schools. The DOJ alleges Matias fraudulently added claims for RPP tests even though medical providers and facility administrators did not order them, and such tests were not needed for the patient population Matias served. In addition, Matias allegedly falsely represented to HRSA that patients had been diagnosed with COVID-19 to obtain payment on the RPP claims. The superseding indictment alleges additional loss to Medicare, HRSA, and the insurer of approximately $241 million in billed claims, and alleges that these payors reimbursed Matias an additional $39.9 million.
- Anthony Hao Dinh, 63, of Orange County, Calif., was charged by complaint for allegedly orchestrating an approximately $230 million fraud on the HRSA Uninsured Program. Dinh was the second highest biller in the country to the Uninsured Program, and he allegedly submitted fraudulent claims for treatment of patients that were insured, billed for services not rendered, and billed for services not medically necessary. He allegedly used over $100 million in fraud proceeds to engage in high-risk options trading. Dinh is also charged with two other individuals, Hanna T. Dinh, also known as Hang T. Dinh, 64, of Orange County, Calif., and Dr. Matthew Ho, 65, of Brevard County, Fla., for allegedly submitting over 70 fraudulent loan applications under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Program and fraudulently obtaining over $3 million in loan funds.
- Latresia Wilson, 60, of Ocala, Fla., and Corey Alston, 45, were charged by indictment with conspiring to defraud the United States and to illegally purchase and arrange for the purchase of Medicare beneficiary identification numbers in connection with a scheme to bill Medicare for over-the-counter COVID-19 test kits that were ineligible for reimbursement. Wilson and Alston allegedly conspired to unlawfully purchase Medicare beneficiary information, including Medicare Beneficiary Identification Numbers used for billing, and submitted more than $8.4 million in claims to Medicare for over-the-counter COVID-19 test kits for Medicare beneficiaries throughout the United States regardless of whether those beneficiaries requested or wanted the test kits.
- Melissa J. Watson, 50, of Slidell, La., was charged by indictment with theft of public money, wire fraud, and money laundering in connection with an alleged scheme to misappropriate over $1.1 million in funds from the Provider Relief Fund (PRF), administered by HRSA, and the EIDL Program, administered by the Small Business Association (SBA), for the enrichment of herself and others. According to the indictment, Watson, who operated a primary care clinic and a purported spa prior to the onset of the COVID-19 pandemic, caused the submission of false and fraudulent loan agreements, attestations, and other documentation, on behalf of her clinic to HRSA and the SBA. Watson then allegedly used the PRF and EIDL Program funds, not as falsely attested, but for personal gain, including making numerous cash withdrawals, and purchasing, among other things, two luxury vehicles, hundreds of thousands of dollars in real estate, a boat, a trailer, a time share, and multiple luxury vacations. The government seized over $500,000 in bank accounts held by Watson, and several assets, including a boat, trailer, and Range Rover Sport.
- Adolphus A. Obioha, 64, of Baton Rouge, La., was charged by indictment with wire fraud and money laundering in connection with an alleged scheme to fraudulently obtain over $425,000 in funds under the EIDL Program. According to the indictment, Obioha, who operated a medical transport business prior to the onset of the COVID-19 pandemic, submitted multiple fraudulent loan documents to the SBA. Obioha allegedly used the EIDL Program funds to purchase a rental property and personal vehicle and to wire nearly $175,000 overseas. The government seized a total of $136,234.09 from multiple bank accounts held by Obioha.
- Shaquaila Lewis, also known as Shaquaila Lewis-Chatman, 35, of Gibsland, La., was charged by indictment with wire fraud and money laundering in connection with an alleged scheme to fraudulently obtain over $1.1 million in funds under the PPP and EIDL Program. According to the indictment, Lewis, a registered nurse, caused the submission of numerous fraudulent loan applications that contained false statements regarding a purported business and the intended use of the loan funds. The funds were allegedly used for personal expenses, such as gambling and contracting work on her home.
- Kelly McDermott, 61, of Albany, N.Y., and Kathleen Breault, 65, of Cambridge, N.Y., were charged by indictment with conspiracy to defraud the United States in connection with a scheme to distribute nearly 2,700 forged COVID-19 vaccination record cards. McDermott, a certified nurse midwife and the owner of Sage-Femme Midwifery PLLC, and Breault, a certified nurse midwife who worked at Sage-Femme, conspired to enroll Sage-Femme as an authorized COVID-19 vaccine administration site and to provide COVID-19 vaccination record cards to individuals who were not vaccinated, including minors who were not at the time eligible to be vaccinated and non-United States citizens who were not present in the United States when they were purportedly vaccinated. Sage-Femme was one of the busiest vaccination sites in New York State, outpacing large, state-run vaccination sites despite being a small midwife practice. Sherilyn Pellitteri, 41, of Somerset, Kentucky, previously pleaded guilty to an information charging the same conspiracy.
- Kate Spencer, 39, and Ziv Biton, 34, of North Miami Beach, Fla., were charged by indictment with conspiracy to commit wire fraud and bank fraud, money laundering conspiracy, and money laundering in connection with an alleged scheme to fraudulently obtain over $1.7 million in funds under the PPP and EIDL Program. According to the indictment, Spencer and Biton caused the submission of numerous fraudulent loan applications on behalf of purported health care businesses, among others, which contained false statements and falsified documents regarding the purported businesses and the intended use of the loan funds. The funds were allegedly used for personal expenses, such as purchases of residential properties.
- Jose A. Burgos-Millan, 55, of San Juan, Puerto Rico, was charged by information with health care fraud. According to the information, Burgos-Millan, a dentist, caused the submission of fraudulent claims to Medicaid using billing code D1999, which was meant to reimburse providers for the cost of COVID-19 infection control materials, and was known as a “COVID Fee.” The information alleges that from in or around August 2020 through November 2022, Burgos-Millan submitted approximately $108,052 in false and fraudulent claims to Medicaid using the billing code D1999 for encounters that never took place. In particular, the information alleges that Burgos-Millan would see Medicaid beneficiaries on one day, but then for billing purposes would split the services into multiple subsequent dates and bill a COVID Fee for each day he did not see of the beneficiaries.
- Nicholas Frank Sciotto, 32, of Salt Lake City, and Kyle Blake Burbage, 32, of Goose Creek, S.C., were charged by indictment for conspiring to defraud the United States by obstructing the Centers for Disease Control and Prevention’s (CDC) COVID-19 vaccination program. According to court documents, between March 2021 through September 2021, Sciotto allegedly manufactured and sold online approximately 120,000 counterfeit COVID-19 vaccination record cards across the country. Most of his buyers lived in New York where they were subject to more stringent COVID-19 vaccine restrictions. Sciotto’s alleged co-conspirator, Burbage, purchased counterfeit vaccination record cards from Sciotto and then resold some of them and distributed them to others in South Carolina. The indictment alleges that by collectively manufacturing, selling, and distributing approximately 120,000 counterfeit COVID-19 vaccination record cards to others during the COVID-19 pandemic, the defendants significantly undermined the CDC’s COVID-19 vaccination program and other governmental health-and-safety regulations and protocols.
“I am proud of the successful partnership of the CMS, the Department of Justice, and the U.S. Department of Health and Human Services Office of Inspector General to combat fraud, waste, and abuse in federal programs,” said CMS Administrator Chiquita Brooks-LaSure. “It is particularly offensive to discover individuals who took advantage of the pandemic to defraud the government. CMS will continue to aggressively investigate COVID-19-related fraud and has already taken actions against 28 providers to protect the sustainability of the Medicare program.”
The Health Care Fraud Strike Force is part of a joint initiative between the Department of Justice and HHS to prevent and deter health care fraud and enforce current anti-fraud laws around the country. In the past three years, the Health Care Fraud Strike Force has rooted out health care fraud related to the COVID-19 pandemic. To date, 53 defendants have been charged in nationwide COVID-19 Health Care Fraud Enforcement Actions for causing over $784 million in loss associated with the pandemic, and 20 defendants have been convicted.