Two Illinois brothers have been indicted for allegedly scheming to defraud Medicare, Medicaid, and private healthcare insurers and for participating in a money laundering conspiracy with the fraudulent proceeds.   

“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, 37-year-old Minhaj Feroz Muhammad and 35-year-old Sufyan Feroze, both of Naperville, Ill., owned and controlled—sometimes through straw owners—four clinical laboratories in Illinois and California. Their scheme allegedly sought to defraud Medicare, Medicaid, and private insurers by submitting bogus claims of more than $293 million for COVID-19 laboratory testing services that were never provided, for which insurers paid at least approximately $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 Special Agent in Charge Douglas S. DePodesta of the FBI 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 contends the defendants participated in a money laundering conspiracy by transferring fraud proceeds between laboratories and other businesses controlled by the defendants, ultimately using the funds to purchase real estate, including luxury developments overseas, gold bars, luxury watches, and luxury vehicles.

Each defendant has been charged with six counts of healthcare fraud and one count of money laundering conspiracy. Feroze has also been charged with one count of engaging in a monetary transaction in criminally derived property in excess of $10,000.

“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 Deputy Inspector General for Investigations Christian J. Schrank of 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, the defendants face a maximum penalty of 10 years in prison on each healthcare fraud charge and 20 years in prison on the conspiracy to commit money laundering charge. If convicted, Feroze faces an additional 10 years in prison on the engaging in a monetary transaction in criminally derived property charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

FBI and HHS-OIG are investigating the case, and trial attorney Kelly M. Warner of the Criminal Division’s Fraud Section is prosecuting the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,800 defendants who collectively have billed federal health care programs and private insurers more than $30 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes.