Doctors, Nurses Charged in Wide-Ranging COVID Fraud Schemes, DOJ Says

— Largest coordinated action targeting COVID healthcare fraud also includes clinic owners

by
Sophie Putka, Enterprise & Investigative Writer, MedPage Today
April 21, 2023

The Department of Justice (DOJ) announced a slew of criminal charges against 18 individuals working in healthcare — including doctors and nurses — for allegedly stealing a total of $490 million in funds from federal health and COVID-related programs.

“Today’s announcement marks the largest-ever coordinated law enforcement action in the United States targeting healthcare fraud schemes that exploit the COVID-19 pandemic,” said Assistant Attorney General Kenneth A. Polite Jr. of the DOJ’s Criminal Division, in a press release.

This action follows two other enforcement actions, in May 2021 and April 2022, which prosecuted similar fraud schemes.

Those charged with the crimes took advantage of pandemic-era relief programs, including the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program, Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) Program, and the Health Care Fraud Unit’s Provider Relief Fund (PRF) Initiative. They also billed Medicare fraudulently, and sold thousands of fake COVID vaccination cards.

The U.S. Government Accountability Office (GAO) previously reported that pandemic relief programs were vulnerable to massive fraud, in part because they “lacked appropriate controls to prevent, detect, and recover fraudulent and other improper payments.” For the EIDL and PPP programs alone, the GAO noted that the government estimated “improper payments” totaling $36.7 billion in 2022.

Lab Testing Elder Scam

Lourdes Navarro, 64, of Glendale, California, operated the Matias Clinical Laboratory with her husband, Imran Shams. They performed COVID screening for residents of nursing homes, rehab facilities, assisted living facilities, and primary and secondary schools. Though court documents said Navarro and Shams were previously excluded from participating in all federal healthcare programs, they billed Medicare, the HRSA, and a private insurer for respiratory pathogen panel (RPP) testing, but are alleged to have fraudulently added claims for tests that their clients didn’t order or weren’t needed.

They also reportedly told HRSA that some patients had been diagnosed with COVID when they hadn’t been to get reimbursement for the RPP screening claims. Their superseding indictment alleges “additional loss” to the payers of $241 million, and reimbursement to the lab of an additional $39.9 million. From the bank accounts of Matias, they transferred money to themselves to use for “real estate, luxury items, travel, and household expenses,” court documents said.

False Billing for the Uninsured

Anthony Hao Dinh, DO, of Orange County, California, is allegedly behind a $230 million fraud using the HRSA uninsured program, which was meant to provide uninsured patients access to COVID testing and treatment. The owner of Elite Care Medical Group and two surgery centers was the second-highest biller in the country to this program, and reportedly submitted claims for treatment of patients who were insured, and billed for services that weren’t provided or were medically unnecessary. According to court documents, Dinh billed the uninsured program for “services allegedly provided to an entire command of National Guard soldiers” who had insurance.

The ear, nose, and throat doctor allegedly used much of the money for high-risk options trading. He allegedly lost over $100 million between 2020 to 2022, according to court documents. He also used the funds to buy a $1.1 million home, and transferred the property to his wife. Dinh is being charged with two others, who allegedly submitted 70 fraudulent loan applications to the PPP and EIDL programs to get $3 million in loans.

COVID Test Kit Racket

Latresia Wilson, MD, PA, 60, of Ocala, Florida, and Corey Alston, 45, the chief administrative officer of Heritage Pharma Group, are charged with illegally purchasing Medicare beneficiary identification numbers to bill the program for over-the-counter COVID test kits that weren’t eligible for Medicare reimbursement. They allegedly submitted more than $8.4 million in Medicare claims for these test kits, regardless of whether Medicare beneficiaries actually requested the tests. Medicare paid more than $2.6 million based on the claims, court documents alleged, and Wilson funneled much of the reimbursement to Alston, and “retained a portion of the Medicare reimbursement payments for her own use.”

COVID Aid for Luxury Cars, Real Estate, and Vacations

Melissa J. Watson, DNP, 50, of Slidell, Louisiana, owned a primary care clinic and purported medical spa before the pandemic, and is alleged to have submitted false and fraudulent documentation to HRSA’s PRF and EIDL programs in a scheme to get $1.1 million for these businesses, which she spent for personal use. The PRF was meant to provide funding to healthcare professionals delivering COVID treatments, and EIDL provided low-interest loans to small businesses affected by the pandemic.

According to the DOJ, Watson used the funds to buy two luxury cars, “thousands” of dollars of real estate, a boat, a trailer, a time share, and “multiple luxury vacations.” Court documents noted that Watson also paid off a $15,000 truck loan for another person, and $32,000 to a probation office in court-ordered restitution for the same person. The government has seized $500,000 from Watson’s bank accounts, as well as her boat, trailer, and Range Rover Sport.

Midwife COVID Card Scheme

Two certified nurse midwives who ran a practice called Sage-Femme Midwifery in Albany, Sharon Springs, and Saratoga, New York, were charged in a conspiracy to defraud the U.S. by distributing around 2,700 forged COVID vaccination cards. Kathleen Breault, CNM, 65, and Kelly McDermott, CNM, 61, enrolled their practice as a COVID vaccine administration site and became one of the busiest sites in New York state, “outpacing large, state-run vaccination sites despite being a small midwife practice.”

Because they were enrolled as a vaccination provider, they received genuine COVID vaccination cards and forged them to indicate vaccinations had occurred when they hadn’t. According to court documents, Breault and McDermott even held vaccination clinic days, met with individuals, and destroyed vials of COVID vaccines instead of administering them. They allegedly provided vaccination cards to minors who were ineligible for the vaccine and to non-U.S. citizens.

Online COVID Card Hustle

A Utah man allegedly manufactured and sold as many as 120,000 fake COVID vaccination cards to customers across the country, particularly in states with more strict COVID restrictions, such as New York. Nicholas Frank Sciotto, 32, of Salt Lake City, sold the cards largely through Facebook and charged $10 per card, and offered a discounted rate of $7.50 each for orders of 100 or more (plus shipping), according to court documents. Co-defendant Kyle Blake Burbage, 32, of Goose Creek, South Carolina, allegedly bought and resold several packages of cards from Sciotto.

According to the DOJ, “the defendants significantly undermined the CDC’s COVID-19 vaccination program and other governmental health-and-safety regulations and protocols.” They are charged with conspiring to defraud the U.S. by obstructing the CDC’s COVID-19 vaccination program.