Chicago Lab Owner Jailed for COVID-19 Fraud Scheme

Crime doesn’t pay?

Try telling that to Zishan Alvi, a Chicago laboratory owner who must reimburse Uncle Sam more than $14 million he conned from U.S. government coffers during a COVID-19 testing fraud scheme.

Alvi owned and operated a laboratory in Chicago that performed COVID-19 testing. In 2021 and 2022, the 46-year-old Inverness, Ill., resident submitted claims to the U.S. Department of Health and Human Services’ Health Resources and Services Administration (HRSA) for COVID-19 tests that were either not performed at all or not performed correctly, according to court documents. As part of the scheme, the laboratory released negative test results to patients even though it never tested the specimens or it tampered with results by diluting the assays (to save on costs), U.S. prosecutors charged.

Alvi knew the laboratory released negative results for tests that either were not performed or were inconclusive but nevertheless billed HRSA for those tests. Alvi also lied to laboratory directors to conceal his fraud, authorities said. Consequently, HRSA paid the laboratory more than $14 million.

Alvi pleaded guilty to one count of wire fraud on Sept. 30, 2024. At sentencing, he was remanded to prison for seven years, ordered to pay $14,199,217 in restitution, and forfeit approximately $6.8 million in cash, a 2021 Range Rover HSE, and more than $630,000 from an E-Trade account.

Matthew R. Galeotti, head of the Justice Department’s Criminal Division, U.S. Attorney Andrew S. Boutros for the Northern District of Illinois, Special Agent in Charge Douglas S. DePodesta of the FBI Chicago Field Office, and Deputy Inspector General for Investigations Christian J. Schrank, of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

The FBI and HHS-OIG investigated the case.

Trial Attorney Claire Sobczak Pacelli of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jared Hasten for the Northern District of Illinois prosecuted the case.

The Fraud Section leads the Criminal Division’s efforts to combat healthcare fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program—comprised of nine strike forces operating in 27 federal districts—has charged more than 5,800 defendants who collectively have billed federal healthcare programs and private insurers over $30 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in healthcare fraud schemes.