The U.S. Department of Justice on Monday announced criminal charges against a founder of a Chicago-based COVID-19 testing lab that allegedly made over $83 million in fraudulent federal health claims for COVID tests.
Zishan Alvi, 44, co-owned and operated Laboratory Elite, which falsely claimed to have offered two types of COVID-19 testing in addition to expedited test results, according to an indictment filed in the U.S. District Court for the Northern District of Illinois. Alvi was indicted by a federal grand jury on ten counts of wire fraud and one count of theft of government funds.
“The charges in this case allege that the defendant disregarded public health concerns in favor of personal financial gain. Doing so by compromising taxpayer-funded programs intended to fight the spread of coronavirus was particularly reprehensible,” said Illiniois Acting U.S. Attorney Morris Pasqual.
The indictment further alleges that Alvi transferred over $83 million fraudulently obtained federal funds to a bank account for personal expenditures, including luxury vehicle purchases, and stock and cryptocurrency investments.
Lab Elite is one of many Chicago-area labs that drew scrutiny from state and federal regulators at the height of the COVID-19 pandemic after customers raised frustrations to reporters with USA TODAY and local outlets, which launched a series of stories delving into the business practices of the companies.
One Illinois-based nationwide coronavirus testing chain, Center for COVID Control, faced lawsuits from multiple states, with some alleging the owners funneled millions of dollars received from the federal government and insurance companies for testing to themselves. The FBI raided the chain’s headquarters early last year.
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Indictment reveals Alvi stole millions for ‘personal financial gain’
Around December 2020, Lab Elite had enrolled in the Health Resources and Services Administration Uninsured Program, which was a federal agency that administered funds to help cover costs of COVID-19 testing for people without health insurance coverage.
Alvi schemed with others to submit false health claims to reimburse inaccurate and unreliable test results to the public from 2021 to 2022, according to the indictment.
The indictment alleges that Alvi directed Lab Elite employees to provide negative test results for COVID-19 tests that had not been actually performed or discarded.
In an effort to reduce costs and increase the lab’s profits, the indictment said Alvi had employees use less materials than required to process tests, which he knew would make the test results unreliable.
Alvi’s operation, according to the indictment, obtained over $83 million from the uninsured program. Alvi allegedly transferred those funds from Lab Elite’s accounts to a personal account where he bought luxury cars, and invested in stocks and cryptocurrency. Among the items seized by the government:
- A 2021 Mercedes-Benz GLB250W4
- A 2021 Land Rover Range Rover HSE
- A 2021 Lamborghini Urus
- A 2021 Bentley
- A 2022 Tesla X
- Approximately $6,825,089 in ZISHAN ALVI’s personal bank account
- Approximately $810,000 in an E*Trade account
- Approximately $500,000 in a Fidelity Investments account
- Approximately $245,814 in a Coinbase account
Alvi faces up to 20 years of prison for each wire fraud count
Each count of wire fraud is punishable by up to 20 years in federal prison, according to a news release from the Department of Justice. And Alvi faces up to 10 years in federal prison for the count of theft of government funds.
The indictment, according to the news release, also seeks forfeiture of at least $6.8 million from Alvi, in addition to his five luxury vehicles and funds from other trade and investment accounts.
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Lab Elite under scrutiny after Center for COVID Control investigation
Following the FBI’s investigation of the Center for COVID Control, people began to question other labs in the Chicago area.
Health officials urged the public to avoid pop-up COVID-19 testing sites in January 2022, Lab Elite came under local and national scrutiny for contracting pop-up tents in Philadelphia.
At the time, the lab had been reimbursed for more than $80 million from the federal government and two people filed complaints about the lab, claiming they never received test results.
Lab Elite was organized in Chicago in late 2020 by Nikola Nozinic and Zishan Alvi. The two owned a pizza place and a tavern in Evanston, Illinois, that closed in late 2020.