DOJ Announces Another COVID-19 Healthcare Fraud Takedown

DOJ Announces Another COVID-19 Healthcare Fraud Takedown

As we predicted last month, the Department of Justice (DOJ) has continued to prioritize COVID-19 fraud enforcement by utilizing its new task forces and newly budgeted resources to take aim at pandemic-related health care fraud schemes. In particular, we anticipated that DOJ would focus on three areas for COVID-19 enforcement: (1) government contract fraud; (2) telemedicine fraud; and (3) vaccine-related fraud.  On April 20, 2023, DOJ announced a new national takedown of 18 individuals for COVID-19 fraud enforcement with charges against those defendants for an alleged $490 million in fraud focused on two of the categories we predicted (1) government contract fraud and (2) vaccine-related fraud.

Government Contract Fraud

• Dr. Anthony Dinh, a California physician, was charged for submitting $230 million in false and fraudulent charges to the HRSA Uninsured Program for COVID-19 tests and other COVID-19-related care that was submitted to HRSA in violation of its terms of service because the patients were actually insured, was not actually provided, or was not medically necessary. Dr. Dinh also submitted over 70 false and fraudulent loan applications for COVID-19 pandemic relief, for which he received approximately $3 million.
• Melissa Watson, a Louisiana primary care clinic operator, was charged for obtaining over $1.1 million in COVID-19 Provider Relief Funds and Economic Injury Disaster Loan Program funds under false pretenses and then using the funds for her personal benefit.

COVID-19 Vaccine Fraud

• Kelly McDermott and Kathleen Breault of New York were indicted for operating an allegedly false COVID-19 vaccine site in New York State that existed largely to facilitate the distribution and sale of approximately 2,700 forged COVID-19 vaccine cards to minors and foreign nationals who were not even in the United States when they were allegedly vaccinated.
• Nicholas Sciotto of Utah and Kyle Burbage of South Carolina were indicted for the sale and online distribution of nearly 120,000 counterfeit COVID-19 vaccine cards across the United States.

In a press release announcing the Takedown, Attorney General Merrick B. Garland stated “this unprecedented enforcement action against defendants across the country makes clear that the Department is using every available resource to combat and prevent COVID-19 related fraud and safeguard the integrity of taxpayer-funded programs.” Assistant Attorney General Kenneth A. Polite, Jr. added that the announcement “marks the largest-ever coordinated law enforcement action in the United States targeting health care fraud schemes that exploit the COVID-19 pandemic.” 

The Takedown is yet another indication that DOJ plans to aggressively utilize its COVID-19 task forces and the Health Care strike teams to continue to pursue COVID-19-related health care fraud, particularly with respect to government contracting fraud, telemedicine, and vaccine-related fraud.