COVID-19 lab co-owner indicted in testing scheme
The U.S. Department of Justice announced criminal charges against a founder of a Chicago-based COVID-19 testing lab accused of making more than $83 million in fraudulent federal health claims for coronavirus tests.
Zishan Alvi, 44, co-owned and operated Laboratory Elite, which falsely claimed to have offered two types of COVID-19 testing in addition to expedited test results, according to an indictment filed in the U.S. District Court for the Northern District of Illinois. Alvi was indicted by a federal grand jury on 10 counts of wire fraud and one count of theft of government funds.
“The charges in this case allege that the defendant disregarded public health concerns in favor of personal financial gain. Doing so by compromising taxpayer-funded programs intended to fight the spread of coronavirus was particularly reprehensible,” Illinois Acting U.S. Attorney Morris Pasqual said.
The indictment further says Alvi transferred more than $83 million in fraudulently obtained federal funds to a bank account for personal expenditures, including luxury vehicle purchases, and stock and cryptocurrency investments.
Lab Elite is one of many Chicagoarea labs that drew scrutiny from state and federal regulators at the height of the COVID-19 pandemic after customers raised frustrations to reporters with USA TODAY and local media outlets, which launched a series of stories delving into the companies’ business practices.
One Illinois-based nationwide coronavirus testing chain, Center for COVID Control, faced lawsuits from multiple states that accused the owners of funneling millions of dollars received from the federal government and insurance companies for testing to themselves. The FBI raided the chain’s headquarters early last year.
Around December 2020, Lab Elite had enrolled in the Health Resources and Services Administration Uninsured Program, a federal agency that administered money to help cover costs of COVID-19 testing for people without health insurance.
Alvi schemed 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 says Alvi directed Lab Elite employees to provide negative test results for COVID-19 tests that had not been actually been done or had been discarded.
In an effort to reduce costs and increase the lab’s profits, the indictment says, Alvi had employees use fewer materials than required to process tests, which he knew would make the test results unreliable.
Each count of wire fraud is punishable by up to 20 years in federal prison, according to a news release from the Justice Department. Alvi also faces up to 10 years in federal prison for the count of theft of government funds.
After the FBI’s investigation of the Center for COVID Control, people began to question 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 contracting pop-up tents in Philadelphia.