Inverness man charged in COVID-19 testing fraud scheme – Chicago Tribune

A federal grand jury on Monday indicted a suburban man on 10 counts of wire fraud and one count of theft of public funds for his part in a COVID-19 testing fraud scheme that netted his Chicago lab more than $83 million from Federal Pandemic Assistance Program.

The money is alleged to have been obtained by making false claims for reimbursement for tests that were never performed, were performed incorrectly, or were paid for by clients.

Zeeshan Alvi, 44, from Inverness, was arrested last week for his alleged involvement in the scheme. He pleaded not guilty to the charges during his initial appearance Friday, according to court records. Alvey appeared Monday at a detention hearing at the U.S. Courthouse in Dirksen, where he was ordered released on bail, according to court records.

Alvey was the co-owner and manager of Lab A in Chicago, which allegedly performed two types of tests to detect COVID-19: PCR tests and “rapid” antigen tests that produced results in about 15 minutes. Individuals and companies could also pay a fee for the results of an accelerated PCR test at the A laboratory.

According to the indictment, around December 2020, Lab A was registered with the Health Resources and Services Administration’s Uninsured Persons Program. The agency’s program used funds allocated by federal law to cover the cost of COVID-19 tests for people without health insurance.

Between February 2021 and February 2022, Alvi and others allegedly engaged in a scheme in which Laboratory A submitted false reimbursement claims for COVID-19 tests knowing that: the laboratory did not perform the test; that the laboratory altered the test, making the results unreliable; or that the lab has already been paid by the customers who supposedly had the test.

According to the indictment, Alvey directed Lab A employees to falsely report that COVID-19 tests had been performed on customers, even though he knew the test samples had been discarded without inspection at his direction. The laboratory issued negative test results to individuals who provided samples for analysis. Lab A also did not release positive COVID-19 results on samples that were ultimately tested because a negative result had already been released, according to the indictment.

The indictment also alleges that Alvey ordered employees to change the lab’s testing methods, using fewer materials needed to process PCR tests — including reagents — to cut costs and increase profits, despite knowing that doing so would test results are unreliable.

Alvey allegedly transferred some of the $83 million that Lab A received from HRSA from the lab’s accounts to a personal account. He then allegedly used the funds for personal expenses, including buying cars and investing in stocks and cryptocurrency. According to a news release Monday, the indictment seeks forfeiture of more than $6.8 million in alleged ill-gotten gains, in addition to five luxury cars and funds from other trading and investment accounts.

Each count of wire fraud Alvey faces is punishable by a maximum of 20 years in federal prison, and the theft of public funds count is punishable by up to 10 years in federal prison.

“The charges in this case allege that the defendant ignored public health concerns in favor of personal financial gain,” said Maurice Pascual, Acting U.S. Attorney for the Northern District of Illinois, in a news release. “To do so while jeopardizing taxpayer-funded programs aimed at combating the spread of the coronavirus was particularly reprehensible.”

Jason Meisner of the Chicago Tribune contributed.

adperez@chicagotribune.com