Owner of COVID testing company accused of defrauding US government out of $83M

An Illinois man has been indicted for allegedly cheating the U.S. government out of millions of dollars for his pop-up COVID testing company and allegedly lied about test results.

Zishan Alvi, 44, was the co-owner of Laboratory Elite, headquartered in Chicago, which purported to offer two types of COVID-19 testing, PCR tests and 15-minute rapid antigen tests, according to an indictment from the U.S. Attorney's Office for the Northern District of Illinois.

The company also offered a service where people could pay a fee to receive expedited PCR test results

Between February 2021 and February 2022, Alvi and others at his company allegedly devised a plan to seek reimbursements for tests under the government's Health Resources and Services Administration, which covered the cost of COVID-19 testing for those without health insurance.

These tests were either never performed, performed in such a way that the results were unreliable; or had already been paid for by patients, according to the indictment.

Additionally, to reduce costs and increase profits, Alvi allegedly told employees to use less materials for the PCR tests including reagents, which is a substance or mixture the test uses for a chemical analysis. Using less of these materials made the tests unreliable, the indictment said.

Over the course of this period, Laboratory Elite received more than $83 million from the HRSA Uninsured Program, some of which Alvi allegedly transferred to a personal account.

Prosecutors said he then used this money to cover personal expenses, including vehicles and investments in stocks and cryptocurrency.

"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 and investment accounts" according to the U.S. Attorney's Office.

What's more, Alvi allegedly told employees to provide negative test results to people who had been swabbed, but their specimens were thrown out.

He was indicted by a federal grand jury on 10 counts of wire fraud and one count of theft of government funds.

"It is absolutely reprehensible that the defendant would use a public health crisis to allegedly defraud taxpayers and further put public health at risk by providing fraudulent COVID-19 test results," Illinois Attorney General Kwame Raoul said in a statement.

If Alvi is found guilty, each count of wire fraud is punishable by up to 20 years in federal prison and the count of theft of government funds is punishable by up to 10 years, according to the U.S. Attorney's Office.