Two brothers from Illinois have been indicted on allegations that they schemed to defraud Medicare, Medicaid, and private health insurers, while also participating in a money laundering conspiracy tied to the alleged fraud.
“These defendants are charged with a brazen scheme to steal nearly $300 million from vital healthcare programs by taking advantage of the fear and panic of the COVID-19 pandemic,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “These charges make clear that the Criminal Division will never rest in its pursuit of those who try to exploit the most vulnerable members of our society, the elderly and the disabled, for their own personal gain.”
According to court documents, Minhaj Feroz Muhammad, 37, and Sufyan Feroze, 35, both of Naperville, Illinois, allegedly owned and controlled — sometimes through straw owners — four clinical laboratories in Illinois and California. Prosecutors claim the pair submitted more than $293 million in fraudulent claims for COVID-19 laboratory testing services that were never provided. Insurers allegedly paid about $65 million in reimbursements.
“The defendants chose to enrich themselves and deprive the most vulnerable members of society from much needed assistance designed by the U.S. Government to provide critical relief efforts,” said Douglas S. DePodesta, special agent in charge of the FBI’s Chicago Field Office. “Healthcare fraud affects everyone—it costs taxpayers millions of dollars, contributes to rising health insurance premiums, and depletes resources from our vital healthcare system. The FBI is committed to working with all our law enforcement and prosecutorial partners to ensure that anyone who dares to exploit government programs intended to assist the American people will be held fully accountable under federal law.”
A superseding indictment alleges the brothers laundered the proceeds by transferring funds among laboratories and other businesses they controlled. Prosecutors say the money was ultimately used to buy real estate, including luxury developments overseas, as well as gold bars, luxury watches, and high-end vehicles.
Each defendant faces six counts of healthcare fraud and one count of conspiracy to commit money laundering. Feroze also faces an additional charge of engaging in a monetary transaction involving more than $10,000 in criminally derived property.
“Allegedly billing almost $300 million dollars to taxpayer-funded and private healthcare programs for services that were never provided is a staggering abuse of resources,” said Christian J. Schrank, deputy inspector general for investigations at the U.S. Department of Health and Human Services Office of Inspector General. “These charges demonstrate HHS-OIG’s unwavering resolve to hold accountable those who exploit federal health care programs and betray the public trust.”
If convicted, both defendants could face up to 10 years in prison on each healthcare fraud charge and up to 20 years on the money laundering conspiracy charge. Feroze could face an additional 10 years if convicted on the monetary transaction charge. A federal judge will determine sentencing based on U.S. Sentencing Guidelines and other statutory factors.
The FBI and HHS-OIG are investigating the case. Trial attorney Kelly M. Warner of the Justice Department’s Criminal Division Fraud Section is prosecuting the matter.
The Fraud Section leads the Criminal Division’s health care fraud enforcement through the Health Care Fraud Strike Force Program. Since March 2007, the program has charged more than 5,800 defendants across 27 federal districts, involving more than $30 billion in alleged fraudulent billings to federal healthcare programs and private insurers.
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