The federal government continues its crackdown on COVID-related fraud with the announcement that 18 defendants in nine federal districts are charged for their alleged participation in various healthcare-related fraud schemes resulting in more than $490 million in false billings and theft from pandemic programs.
The charges build on the success of the April 2022 COVID-19 Enforcement Action and the May 2021 COVID-19 Enforcement Action. As we first wrote about in July 2020, COVID-related healthcare fraud began within months of the start of the pandemic.
In this latest crackdown, the feds seized more than $16 million in cash and other healthcare fraud proceeds. In addition, the Center for Program Integrity of the Centers for Medicare & Medicaid Services (CPI/CMS) announced that it took administrative actions in the last year against 28 medical providers for their alleged involvement in COVID-19 schemes.
The schemes for which the 18 have been charged varied.
In one of the most significant types of COVID-19 healthcare fraud schemes, multiple defendants were charged with defrauding the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program. The program was designed to prevent the further spread of the pandemic by providing access to uninsured patients for testing and treatment. It eventually ceased operation in April 2022 after funding ran out.
For example, in the Central District of California, Dr. Anthony Hao Dinh, was charged with allegedly orchestrating an approximately $230 million fraud on the Uninsured Program. The doctor was the second highest biller in the country to the program. He allegedly submitted fraudulent claims for the treatment of patients who were insured and billed for services that were not rendered or medically necessary. He allegedly used more than $100 million in fraud proceeds for high-risk options trading.
Also, in the Central District of California, Lourdes Navarro, a lab owner, was charged in a superseding indictment with allegedly submitting more than $358 million in false and fraudulent claims to Medicare, HRSA, and a private insurance company. The indictment alleges that the defendant’s lab performed COVID-19 screening testing for nursing homes and other facilities. But to increase reimbursements, she allegedly added claims for respiratory pathogen panel tests even though ordering providers and facility administrators did not want or need them. Navarro was previously charged in an indictment returned in April 2022.
The announcement also includes first-of-their-kind charges against suppliers of COVID-19 over-the-counter tests, which Medicare began to cover in April 2022 for beneficiaries who requested them.
In the Middle District of Florida, Dr. Latresia Wilson and Corey Alston, a marketer, were charged with unlawfully purchasing Medicare beneficiary identification numbers and shipping over-the-counter tests to beneficiaries throughout the country who did not request the tests, resulting in more than $8.4 million in fraudulent Medicare claims.
In the Eastern District of Louisiana, Melissa J. Watson, the operator of a primary care clinic and purported spa, was charged with submitting fraudulent loan agreements, attestations, and other documentation from which she received more than $1.1 million in Provider Relief Funds (PRF) that were used to purchase real estate, luxury vehicles, a boat, a trailer, a timeshare, and luxury vacations, among other expenditures. The government seized more than $500,000 in bank accounts held by Watson, and several assets, including a boat, trailer, and Range Rover Sport.
In the Middle District of Louisiana, Adolphus A. Obioha was charged with wire fraud and money laundering in connection with an alleged scheme to fraudulently obtain more than $425,000 in funds under the EIDL Program. Obioha, who operated a medical transport business prior to the COVID-19 pandemic, submitted multiple fraudulent loan documents to the SBA. Obioha allegedly used the money to buy 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.
And, in the Western District of Louisiana, Shaquaila Lewis, a/k/a Shaquaila Lewis-Chatman, was charged in connection with an alleged scheme to fraudulently obtain more than $1.1 million in funds under the PPP and EIDL Program. According to the indictment, Lewis, a registered nurse, submitted 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.
In the Eastern District of New York, Kelly McDermott and Kathleen Breault, both certified midwives, were charged in connection with a scheme to distribute nearly 2,700 forged COVID-19 vaccination record cards. Instead of administering the vaccine, the defendants allegedly destroyed vials of COVID-19 vaccines that were intended to be used on patients. Despite being a small midwife practice, it was one of the busiest vaccination sites in New York State, outpacing large, state-run vaccination sites.
Also, in the Eastern District of New York, Kate Spencer, and Ziv Biton of North Miami Beach were charged with conspiracy to commit wire and bank fraud, money laundering conspiracy, and money laundering in connection with an alleged scheme to fraudulently obtain more than $1.7 million in funds under the PPP and EIDL Program. According to the indictment, Spencer and Biton submitted numerous fraudulent loan applications on behalf of purported healthcare businesses. The money was allegedly used for personal expenses, such as purchases of residential properties.
In the District of Utah, Nicholas Frank Sciotto of Salt Lake City, and Kyle Blake Burbage, of South Carolina, were charged with allegedly manufacturing and selling online approximately 120,000 counterfeit COVID-19 vaccination record cards across the country, especially in areas that were subject to more stringent COVID-19 vaccine restrictions. Burbage allegedly purchased the counterfeit cards from Sciotto and resold some of them, and distributed them to others in South Carolina.
In the District of Puerto Rico, Dr. Jose A. Burgos-Millan, a dentist, allegedly submitted 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.” It’s alleged he submitted approximately $108,052 in false and fraudulent claims to Medicaid encounters that never took place. In particular, the information alleges that he would see Medicaid beneficiaries on one day, but then would split the services into multiple subsequent dates and bill a COVID Fee for each day he did not see the beneficiaries.
As we have been writing about, numerous others have been caught up in the COVID-19 anti-fraud efforts:
In May 2022, a New York Doctor agreed to pay more than $564,000 to resolve allegations that they submitted false claims to Medicare for services not provided during the administration of COVID-19 vaccines and tests.
In April, a Florida man pleaded guilty to receiving kickbacks as part of a COVID-19 scheme. Michael Stein was among 14 defendants charged in May 2021 for their alleged participation in various healthcare fraud schemes that exploited the COVID-19 pandemic and resulted in more than $143 million in false billings.