Chicago lab co-owner charged in $83 million COVID-19 testing scheme
The US Department of Justice on Monday announced criminal charges against a founder of a Chicago-based COVID-19 testing lab that allegedly made more than $83 million in fraudulent federal health claims for COVID testing.
Zishan Alvi, 44, co-owner and operator of Laboratory Elite, which falsely claimed to have offered two types of COVID-19 tests in addition to expedited test results, according to an indictment filed in the U.S. District Court for the Northern District from Illinois. Alvi was indicted by a federal grand jury on ten counts of wire fraud and one count of theft of public funds.
“The charges in this case allege that the defendant ignored public health concerns in favor of personal financial gain. To do so while undermining taxpayer-funded programs intended to combat the spread of the coronavirus was particularly reprehensible,” Illinois Acting U.S. Attorney Morris Pasqual said.
The indictment further alleges that Alvi transferred more than $83 million in fraudulently obtained federal funds to a bank account for personal expenses, including luxury vehicle purchases and investments in stocks and crypto. -cash.
Lab Elite is one of several Chicago-area labs that came to the attention of state and federal regulators during the height of the COVID-19 pandemic after customers expressed frustration to reporters with USA TODAY and the local outlets, which launched a series of stories exploring the business practices of businesses.
An Illinois-based national coronavirus testing chain, Center for COVID Control, has faced lawsuits from multiple states, with some alleging owners funneled millions of dollars received from the federal government and insurance companies to test themselves. The FBI raided the station’s headquarters early last year.
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Indictment reveals Alvi stole millions for ‘personal financial gain’
Around December 2020, Lab Elite had enrolled in the Uninsured Program of the Health Resources and Services Administration, which was a federal agency that administered funds to help defray the costs of COVID-19 testing for people without health insurance coverage.
Alvi conspired with others to submit false health claims to reimburse inaccurate and unreliable test results to the public from 2021 to 2022, according to the indictment.
The indictment alleges that Alvi ordered Lab Elite employees to provide negative test results for COVID-19 tests that were not actually performed or rejected.
In an effort to cut costs and increase profits for the lab, the indictment said Alvi instructed employees to use fewer materials than necessary to process the tests, which he said would make unreliable test results.
Alvi’s operation, according to the indictment, obtained more than $83 million from the uninsured program. Alvi reportedly transferred these funds from Lab Elite accounts to a personal account where he bought luxury cars and invested in stocks and cryptocurrencies. Among the items seized by the government:
- A 2021 Mercedes-Benz GLB250W4
- A 2021 Land Rover Range Rover HSE
- A 2021 Lamborghini Urus
- A 2021 Bentley
- A 2022 Tesla X
- Approximately $6,825,089 in ZISHAN ALVI’s personal bank account
- Around $810,000 in an E*Trade account
- About $500,000 in a Fidelity Investments account
- About $245,814 in a Coinbase account
Alvi faces up to 20 years in prison for each electronic fraud
Each count of wire fraud carries a sentence of up to 20 years in federal prison, according to a Justice Department press release. And Alvi faces up to 10 years in federal prison for the count of theft of public funds.
The indictment, according to the press release, also seeks the forfeiture of at least $6.8 million from Alvi, in addition to his five luxury vehicles and funds from other business accounts and ‘investment.
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Lab Elite under scrutiny after Center for COVID Control investigation
Following the FBI’s investigation of the Center for COVID Control, people started asking other labs in the Chicago area.
Health officials urged the public to avoid pop-up COVID-19 testing sites In January 2022, Lab Elite came under local and national scrutiny for outsourcing pop-up tents to Philadelphia.
At the time, the lab had been reimbursed more than $80 million by the federal government, and two people filed lawsuits against the lab, saying they never received test results.
Lab Elite was organized in Chicago at the end of 2020 by Nikola Nozinic and Zishan Alvi. The two owned a pizzeria and tavern in Evanston, Illinois, which closed in late 2020.