Three hundred and eighty thousand COVID-19 tests. That's how many Rajesh "Raj" Patel, a 52-year-old lab owner from Schaumburg, Illinois, allegedly fabricated and billed to the federal government between May 2021 and April 2022. The tests didn't exist. Many of the patients didn't either.
The price tag for this particular piece of pandemic entrepreneurship: $66.2 million.
A federal grand jury in the Northern District of Illinois returned an indictment on October 20 charging Patel — co-owner and Chief Operating Officer of a clinical laboratory in Hillside, Illinois — with five counts of wire fraud. Each count carries a maximum penalty of 20 years in prison. Patel's lab submitted $66.2 million in fraudulent claims to the Health Resources and Services Administration's Uninsured Program, according to the Department of Justice. HRSA paid out approximately $44.1 million. Patel personally pocketed roughly $28 million.
The mechanics were straightforward. Around March 2021, Patel's lab contracted with a company called Meridian Medical Staffing Inc. to collect test specimens and patient information. Prosecutors say many of those patients never actually existed or never provided specimens to Meridian. The lab generated fake negative PCR results to support the claims, then billed the federal government for tests that were never performed on people who were never tested.
Assistant Attorney General Colin M. McDonald of the Justice Department's Fraud Division said the defendant "allegedly exploited a global crisis for personal gain, fabricating hundreds of thousands of COVID-19 tests" and billing taxpayers for the results. FBI Chicago Special Agent in Charge Ryan Whalen emphasized the bureau's commitment to holding accountable those who unlawfully obtain federal assistance. Thomas Ethridge, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General, pointed to the unprecedented public investment the pandemic required — and the people who saw that investment as an open register.
Remember the climate around COVID testing in 2021. Questioning the volume, the accuracy, or the incentive structure of the testing apparatus made you a dangerous conspiracy theorist. Suggesting that a system funneling billions in federal dollars to labs with minimal oversight might attract fraud was treated as anti-science. Meanwhile, a lab in Hillside was manufacturing fake results by the hundreds of thousands and collecting checks from an agency that apparently didn't notice 380,000 tests from a single facility had no corresponding patients.
The HRSA Uninsured Program was designed to cover COVID testing and treatment for Americans without health insurance — taxpayer money allocated during a national emergency to protect the most vulnerable. Patel allegedly converted that program into a personal ATM, submitting claims for phantom tests while real patients elsewhere waited in line at legitimate testing sites that were overwhelmed by demand his fake volume helped create.
Patel billed $66.2 million. The government paid $44.1 million. He kept $28 million. The patients were fictional. The tests were fictional. The negative results his lab generated for people who never walked through the door were fictional. The only thing that was real was the money, and it moved in one direction — from the federal treasury to Raj Patel's accounts, $28 million at a time.