The co-owner of a startup COVID testing company is believed to have scammed the U.S. government out of as much as $83 million in federal funding, the Department of Justice (DOJ) said in an indictment.
The co-owner of Laboratory Elite in Chicago, Zishan Alvi, received government funding for the company during the period between February 2021 through February 2022. The indictment alleges Alvi and others at the company created a plan to cheat the government into giving them reimbursements for COVID tests that were ultimately never performed or used.
Under the Health Resources and Services Administration, federal funding was administered to provide COVID-19 tests for individuals without insurance. Alvi’s company would allegedly scam the service by either never performing these COVID tests, performing tests in a way that was not accurate, or charging customers additional costs for tests, despite them being federally funded.
The indictment seeks forfeiture from the defendant of at least $6.8 million in alleged ill-gotten gains, in addition to five luxury vehicles and funds from other trade investment accounts.
Alvi would scam the government by pressuring employees to give customers fraudulent results without performing COVID tests, the indictment claims. “In order to conceal the fact that tests were not performed, Alvi instructed Laboratory Elite employees to release purported negative COVID-19 test results to individuals, when Alvi knew that no tests were performed.”
Alvi would also rake in more profits by ordering that fewer materials be used to process the COVID tests. “To reduce costs and increase Laboratory’s profits, Alvi directed employees to alter PCR testing method by using less of the materials necessary to process the PCR test, including the reagents, knowing this made rests unreliable.
Alvi is currently facing ten individual counts of wire fraud and one count of theft of government funds. Each wire fraud count equates to up to 20 years in prison. The theft of government funds could amount to a 10-year sentence. If convicted of all charges he could be sentenced to what would be equivalent to a life term.
Illinois Attorney General Kwame Raoul ridiculed Alvi over the allegations. He wrote in a statement, “it is absolutely reprehensible that the defendant would use public health crisis to allegedly defraud taxpayers and further put public health at risk by providing fraudulent COVID-19 test results.”
Sadly, this is just one of hundreds, or perhaps thousands of fraudulent schemes that have scammed and taken billions of taxpayer dollars, with many never being brought to justice.
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These small business owners and scam artists are watched and finally approached by the FBI if they fit the bill. They are groomed to commit these crimes knowing they are going to get caught and go to prison. They are the fall guys, but get to keep a large sum for their long stint of 5-7 years in prison. Many charges are obviously squashed. Usually they get the most time from wire fraud charges.