COVID-19 Fraud Update: DOJ Prosecutes More than 150 Defendants, 95 Criminal Cases

COVID-19 Fraud Update: DOJ Prosecutes More than 150 Defendants, 95 Criminal Cases 

Since the inception of the CARES Act, DOJ’s Fraud Section has prosecuted over 150 defendants in over 95 criminal cases. The Fraud Section has also seized over $75 million in cash along with numerous luxury items and real estate properties purchased with fraudulently obtained PPP proceeds.

A federal jury in Atlanta, Georgia, convicted a South Carolina man of conspiracy to commit bank fraud, making a false statement to a bank, and money laundering. According to DOJ’s press release, the man fraudulently obtained a $300,000 PPP loan under the CARES Act by falsely inflating the number of employees and average monthly payroll expenses on his loan application, which led to him receiving a larger PPP loan than he was legitimately eligible for. 

The man, along with a co-conspirator, then submitted a forged tax document to support the false statements and engaged in a series of sham transactions to make it appear as though he was paying employees, who, in reality, were returning most of the money to him. He is the 11th defendant convicted in this $3 million Atlanta-based PPP fraud ring; all other defendants pled guilty before trial.  

A former IRS employee recently pled guilty to fraudulently obtaining $62,300 in CARES Act Funds. 

The former IRS employee was alleged to have fraudulently applied for a loan under the Economic Injury Disaster Loan (EIDL) program by falsely claiming to be an independent contractor in the “Hair & Nail Salon” industry, even though at the time he was a full-time IRS employee. As a result of this false statement, he obtained $62,300 and used that money to renovate an investment property he owned. Read the DOJ’s press release here.

Biogen Inc. Settles False Claims Act Allegations for $900 Million 

Pharmaceutical company, Biogen Inc., agreed to pay approximately $900 million to settle allegations that it violated the False Claims Act (FCA) by causing the submission of false claims to Medicare and Medicaid.  

A former Biogen employee filed a lawsuit against Biogen under the whistleblower provisions of the FCA, alleging that Biogen paid kickbacks to physicians in order to induce them to prescribe Biogen’s drugs for multiple sclerosis, including Avonex, Tysabri, and Tecfidera. According to the complaint, Biogen paid health care professionals who spoke at or attended Biogen’s speaker programs, speaker trainings, and consultant programs. 

These professionals allegedly received speaker honoraria, speaker training fees, consulting fees, and meals to induce them to prescribe Biogen’s drugs.

Read the DOJ’s press release here.

Washington Doctor Pleads Guilty for Accepting Kickbacks in Scheme that Targeted the Elderly 

A Renton, Washington doctor pled guilty to conspiring to accept kickbacks in connection with an alleged fraudulent genetic testing scheme. According to DOJ’s press release, telemarketers connected the doctor to Medicare beneficiaries on the telephone, and the doctor then placed genetic testing orders for these Medicare beneficiaries whom he was not treating and with whom he had no physician-patient relationship. The laboratories then billed Medicare for the genetic tests, while another company billed Medicare for the alleged “telemedicine” visit. From December 2020 to September 2021, the doctor received $167,996 in kickbacks for ordering medically unnecessary genetic testing and other services.

Read the DOJ’s press release here.