DOJ's Enforcement Action Continues to Combat COVID-19 Healthcare Fraud

Previously, the U.S. Department of Justice (DOJ) announced a nationwide law enforcement action to combat COVID-19 healthcare fraud. In recent developments, the DOJ brought criminal charges against 21 defendants, across nine federal districts, for alleged participation in various COVID-19 healthcare fraud schemes. The DOJ’s latest case builds on their successful COVID-19 enforcement action announced in May 2021. Altogether, the enforcement action involves the prosecution of several COVID-19 healthcare fraud cases. The DOJ maintains several enforcement plans, addressing various frauds and schemes in several arenas, including cybersecurity and cybercrime. For instance, a previously announced plan combats ongoing cyber threats in response to increased ransomware and cryptocurrency abuse.

Combatting COVID-19 Healthcare Fraud

U.S. Attorney General Merrick B. Garland established the COVID-19 Fraud Enforcement Task Force (the task force) on May 17th, 2021, to combine resources within the DOJ with other agencies across the government in combatting COVID-19 healthcare fraud. The DOJ uses criminal, civil, and administrative actions in response to cases of COVID-19-related fraud. In forming the task force, Attorney General Garland expressed resolve stating, “We look forward to working with our federal government colleagues to bring to justice those who seek to profit unlawfully from the pandemic.” Accordingly, the DOJ and its agency partners have already worked to hold several perpetrators of COVID-19 healthcare fraud accountable.

Notable COVID-19 Healthcare Fraud Schemes

Many cases announced recently involved defendants who allegedly offered COVID-19 testing to get patients to provide personal identification, as well as a saliva or blood sample. Then, the defendants used the information and samples to submit false Medicare claims for unrelated, unnecessary, and more expensive services. The following COVID-19 healthcare fraud schemes follow the basic formula:

• Owners of a clinical laboratory in California participated in a healthcare fraud, kickback, and money laundering scheme involving the fraudulent billing of over $214 million for lab tests. Over $125 million of that total involved COVID-19 test-related claims. The owners laundered the proceeds through shell corporations in the U.S. They then transferred them to foreign countries and used them to buy real estate and luxury items.
• In Maryland and New York, medical clinic owners allegedly obtained confidential patient information while administering drive-thru COVID tests. The owners subsequently used the information in fraudulent claims for lengthier and costlier office visits that did not occur.
• Finally, in another case, defendants exploited Centers for Medicare and Medicaid Services (CMS) policies. A medical professional in Florida was involved in a healthcare fraud, wire fraud, and kickback scheme. The scheme involved billing for fake telemedicine encounters and ordering unnecessary genetic testing in exchange for access to telehealth patients.

Finally, the DOJ’s recent announcement also includes charges against manufacturers and distributors producing fake COVID-19 vaccination cards.

Latest Numbers From the COVID-19 Fraud Enforcement Task Force

In sum, the task force has brought criminal charges against 21 defendants in nine federal districts. The cases involved resulted in over $149 million in COVID-19-related fraudulent billings and theft from federal pandemic assistance programs. The task force has seized more than $8 million in cash and other fraud proceeds so far. Lastly, the CMS and the Center for Program Integrity both announced an additional 28 administrative actions against providers who participated in fraud, waste, and abuse schemes related to COVID-19.