DOJ Charges Two in $227 Million Medicare COVID-19 Fraud Scheme

The U.S. Department of Justice (DOJ) has filed charges against two individuals for their alleged involvement in a $227 million Medicare fraud scheme. The defendants, Syed Murtuza Kablazada, 34, of Arlington Heights, Illinois, and Syed Mehdi Hussain, 32, of Carol Stream, Illinois, are accused of owning and operating medical labs that submitted fraudulent Medicare claims for COVID-19 test kit reimbursements that were never provided to beneficiaries.

The scheme involved hiring foreign nationals as straw owners of the labs, with the intention of having them flee the country once investigations began. The defendants allegedly paid a marketing company to acquire the names of hundreds of thousands of Medicare beneficiaries, which were then used to submit fraudulent claims. The labs rarely provided COVID-19 test kits to beneficiaries, further exacerbating the fraud.

Matthew R. Galeotti, Head of the Justice Department’s Criminal Division, commented on the alleged scheme, stating, “As alleged, the defendants used straw owners at multiple laboratories to cause the submission of more than $200 million in fraudulent claims to Medicare for COVID-19 test kits. Healthcare fraud harms Americans by squandering taxpayer money and diverting limited resources from those who need them most. The Criminal Division will continue to aggressively prosecute these crimes to hold fraudsters accountable, protect victims, and recover financial losses.”

This case highlights the ongoing efforts by the DOJ to combat healthcare fraud, particularly in the context of the COVID-19 pandemic. The alleged scheme not only defrauded Medicare but also diverted resources away from legitimate healthcare needs. The DOJ's aggressive prosecution of such crimes aims to deter future fraudulent activities and recover losses for taxpayers.

The charges against Kablazada and Hussain underscore the complexity and scale of healthcare fraud, which often involves sophisticated methods to evade detection. The use of straw owners and the acquisition of beneficiary names through marketing companies are tactics that have been employed in previous fraud schemes, indicating a pattern of behavior that the DOJ is determined to address.

The DOJ's actions in this case serve as a reminder of the importance of vigilance in protecting public funds and ensuring that healthcare resources are allocated appropriately. The alleged fraud not only harmed Medicare but also undermined public trust in the healthcare system. The DOJ's commitment to prosecuting such crimes is crucial in maintaining the integrity of the healthcare system and safeguarding taxpayer dollars.