Lab Owner Created Fake COVID Test Results To Bill Taxpayers: Feds

SCHAUMBURG, IL — A Schaumburg laboratory owner created hundreds of thousands of fake negative COVID-19 test results to fraudulently bill a federal health care program, according to an indictment announced Tuesday by the U.S. Department of Justice.

Rajesh "Raj" Patel, 52, faces five counts of wire fraud in the alleged scheme. Prosecutors said his laboratory submitted approximately $66.2 million in fraudulent claims, received approximately $44.1 million and generated approximately $28 million in proceeds for Patel personally.

A federal grand jury in the Northern District of Illinois returned the indictment Oct. 19.

Patel was the co-owner and chief operating officer of a clinical laboratory in Hillside that processed polymerase chain reaction, or PCR, tests during the pandemic, according to court documents described by the Justice Department.

Around March 2021, the laboratory entered into an agreement with Meridian Medical Staffing Inc. The laboratory paid Meridian tens of millions of dollars to collect test specimens and provide specimens and information about purported patients.

Many of those patients did not exist or never provided specimens to Meridian, prosecutors alleged.

Between May 2021 and April 2022, Patel allegedly created fake negative results for at least 380,000 PCR tests without the laboratory actually performing the tests.

The false results allowed the laboratory to bill the Health Resources and Services Administration’s Uninsured Program, which covered COVID-19 testing costs for people without health insurance, according to prosecutors.

"This defendant allegedly exploited a global crisis for personal gain, fabricating hundreds of thousands of COVID-19 tests — then billing the taxpayer for it," Assistant Attorney General Colin M. McDonald said in the release.

"Pandemic assistance programs were designed to provide a lifeline to vulnerable members of society," FBI Chicago Special Agent in Charge Ryan Whalen said. "Those who are entrusted with federal healthcare dollars have a responsibility to bill honestly and accurately."

The FBI's Chicago Field Office and the Department of Health and Human Services Office of Inspector General investigated the case. If convicted, Patel faces a maximum sentence of 20 years in prison on each wire fraud count.