COVID fraud takedowns: Feds charge 18 people, including doctors, with raking in nearly $500M from scams

Eighteen people, some of them practicing medical doctors, were criminally charged with participating in healthcare fraud schemes that exploited the COVID-19 pandemic and allegedly raked in $490 million.

The schemes resulted from false billings to federal programs and theft from federally funded pandemic programs, according to the Department of Justice (DOJ) in a news release.

In the widespread fraud takedown, federal authorities also targeted suppliers of COVID-19 over-the-counter tests who exploited federal partners by shipping tests to patients who did not want or need them. And the feds went after individuals who filed fraudulent claims to the Provider Relief Fund (PRF) and the manufacturers and distributors of fake COVID-19 vaccination record cards.

Two of the most significant criminal cases in this latest sweep were filed by federal prosecutors in the Central District of California.

Anthony Hao Dinh, D.O., allegedly bilked the federal government out of $150 million and he used these fraud proceeds for high-risk options trading, losing over $100 million, according to the DOJ in an announcement April 20.

Dinh allegedly submitted fraudulent claims to the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program totaling about $230 million. That federal program was designed to prevent the further spread of the pandemic by providing access to uninsured patients for testing and treatment. The program also was intended to provide financial support to healthcare providers fighting the COVID-19 pandemic by reimbursing them for services provided to uninsured individuals. 

He was the second-highest biller in the country to the uninsured program, according to federal authorities.

Dinh allegedly submitted fraudulent claims for treatment of patients who were insured, billed for services that were not rendered and billed for services that were not medically necessary, according to a criminal complaint filed April 10.

After being arrested April 12 and subsequently released on a $7 million bond, Dinh is scheduled to be arraigned in U.S. District Court May 22. If he were to be convicted of the three charges, he would face a statutory maximum sentence of 50 years in federal prison, federal authorities said.

“Dr. Dinh is alleged to have stolen from a taxpayer-funded program meant to provide COVID-related health care to uninsured patients,” said U.S. Attorney Martin Estrada. “We will not tolerate stealing from the American people, and our prosecution of this large-scale scheme demonstrates our continued efforts to stop fraud of all sorts.”

Dinh also was charged with two other individuals for allegedly submitting over 70 fraudulent loan applications through the Paycheck Protection Program and Economic Injury Disaster Loan Program and fraudulently obtaining over $3 million in loan funds.

A California lab owner also was charged for allegedly submitting over $358 million in false and fraudulent claims to Medicare, HRSA and a private insurance company for laboratory testing.

In connection with the widespread fraud takedown, the DOJ claimed that it seized more than $16 million in cash and other fraud proceeds. The Center for Program Integrity of the Centers for Medicare & Medicaid Services separately announced today that it took adverse administrative actions in the last year against 28 medical providers for their alleged involvement in COVID-19 schemes.

"This unprecedented enforcement action against defendants across the country makes clear that the Department is using every available resource to combat and prevent COVID-19 related fraud and safeguard the integrity of taxpayer-funded programs," said Attorney General Merrick Garland in a statement.

Assistant Attorney General Kenneth A. Polite Jr. said the latest takedown marks the largest-ever coordinated law enforcement action in the U.S. targeting healthcare fraud schemes that exploit the COVID-19 pandemic.

Federal authorities also claim the first charges against suppliers of COVID-19 over-the-counter tests, which Medicare began to cover in April 2022. These kits were provided to the public to slow the spread of the deadly disease; authorities allege that some suppliers exploited the program by repeatedly supplying patients or, in some instances, deceased patients, with dozens of COVID-19 tests that they did not want or need.

In Florida, a doctor and a marketer were charged for allegedly unlawfully purchasing Medicare beneficiary identification numbers and shipping over-the-counter tests to beneficiaries throughout the country who did not request the tests, causing over $8.4 million in fraudulent claims to Medicare.

Authorities also brought charges under the Health Care Fraud Unit’s PRF Initiative. The operator of a primary care clinic in Louisiana allegedly submitted fraudulent loan agreements, attestations and other documentation and received more than $1.1 million in federal funds that were used to purchase real estate, luxury vehicles, a boat, a trailer, a time share and luxury vacations. In total, 12 defendants have been charged with crimes related to misappropriating funds intended for front-line medical providers, and seven have pleaded guilty, federal authorities said.

And feds targeted manufacturers and distributors of fake COVID-19 vaccination record cards. In the Eastern District of New York, three medical professionals who worked at a small midwife practice were charged for allegedly distributing nearly 2,700 forged COVID-19 vaccination record cards to individuals who were not vaccinated. 

Despite being a small midwife practice, the facility was one of the busiest vaccination sites in New York state, outpacing large, state-run vaccination sites, according to the DOJ.

Two people in Utah also were charged for allegedly manufacturing and selling online approximately 120,000 counterfeit COVID-19 vaccination record cards across the country.

The attorney general established the COVID-19 Fraud Enforcement Task Force in May 2021 to marshal the resources of the DOJ in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.

In April 2022, a federal takedown netted charges against 21 defendants accused of various healthcare fraud schemes involving the COVID-19 pandemic. The cases allegedly led to more than $149 million in false billings to federal programs and theft from federally funded assistance programs and cost over $8 million as part of its enforcement.

It’s been nearly two years since the attorney general established the COVID-19 Fraud Enforcement Task Force, a partnership between the DOJ and other government agencies that investigates and prosecutes such cases.

A year ago, the DOJ said its Health Care Fraud Strike Force has charged over 4,200 defendants who collectively billed Medicare for nearly $19 billion. More than $5 billion of those recoveries came in 2021 alone.