How the COVID-19 Pandemic Sparked A Pandemic of Fraud

By Devin Partida, Editor-in-Chief, ReHack.com
Twitter: @rehackmagazine

The COVID-19 pandemic was a difficult time for people around the globe. Unfortunately, with the pandemic came a wave of fraudsters that misused the medical system for their own benefit.

While the medical industry helped people through the dangerous waters the pandemic brought, some practitioners saw this as a golden opportunity to commit fraudulent crimes. Here is how COVID-19 sparked a pandemic of fraud.

The DOJ Created a Pandemic Related Taskforce

Due to the number of fraud cases that arose during the pandemic, the Department of Justice (DOJ) formed a task force specifically for combating COVID-19-related fraud. The DOJ stated the fiscal year of 2021 reached more than $5,6 billion of settlements and judgments of fraud-related cases. This was the second-largest yearly total of fraud claims in history.

Health care was the biggest of these fraud cases the government received. In 2021, the DOJ released a press release stating they charged multiple defendants for allegedly conducting fraud schemes that exploited the pandemic. These schemes resulted in more than 143 million dollars of illegal billings.

Law enforcement across the U.S. was committed to putting a stop to these pandemic fraudsters. Medical providers utilized the help of different technology to fight the pandemic and with some medical practitioners misusing their power, it greatly undermined the actions and efforts for combatting COVID-19.

The COVID-19 Medical Fraud Schemes

Throughout the pandemic, numerous COVID-19-related fraud cases resulted in the loss of millions of dollars. In some cases, fraudsters went after the Provider Relief Fund (PRF). This fund provided financial assistance to the health care sector to assist people with medical care that had sustained the COVID-19 virus. In April 2022, multiple defendants were charged with this fraud crime and three of them pleaded guilty to the charges.

Some of these fraud crimes involved defendants conducting Medicare fraud where they allegedly offered COVID-19 testing to obtain personal information and a blood or saliva sample from patients. According to the Justice Department, they would use this information to submit false medical claims to Medicare. These fraudulent claims were for unnecessary and expensive tests.

In one of these cases, owners of a clinical laboratory were charged with a multitude of crimes — money laundering, kickback and health care fraud. These crimes resulted in the fraudulent billing of 214 million dollars of tests. They allegedly laundered the money of these fraudulent claims through different shell corporations throughout the United States.

In other instances of two different cases — the Eastern District of New York and the District of Maryland — owners of medical clinics submitted fraudulent claims of office visits. The owners obtained personal and confidential information from people looking for COVID-19 testing at drive-thru testing sites. They used this information to submit office visits that did not happen.

There were also cases where defendants sold homeoprophylaxis immunizations to people and then presented them with fake vaccination records. The goal was to make them think that they have obtained government-authorized vaccines. In one instance, a person that worked as the Director of Pharmacy used her job to obtain real lot numbers of the Moderna vaccine to create false vaccination records.

Exploiting CMS Policies

There were also a few cases of defendants misusing policies the Centers for Medicare and Medicaid Services (CMS) had implemented. Allegedly, a Florida medical practitioner billed fake telemedicine visits that did not occur and was also in an agreement to conduct unnecessary genetic tests in exchange for access to telehealth patients.

One defendant received a prison sentence of 82 months for the part they played in this fraudulent scheme. In April 2022, the CMS stated that they took administrative action against 28 different medical practitioners for their alleged involvement in fraudulent activities related to COVID-19 care delivery, alongside those that misused the public health emergency for personal gain. The previous year they took action against 50 medical providers.

The Pandemic of Fraud

While the pandemic brought fear and uncertainty, some practitioners decided to abuse their power for self-gain. However, many law enforcement officials are still taking action against those who exploited the fear and finances of civilians. With the widespread emission of the vaccine and these fraudsters being brought to justice, this scary and uncertain time of COVID-19 can almost be a thing of the past.