CHICAGO — A local man ran a COVID-19 testing lab where workers tossed tests and gave people false results while the company raked in $83 million from the federal government — and he used the money for cars, stocks and cryptocurrency, according to a federal indictment.
Zishan Alvi, 44, of suburban Inverness, is facing 10 counts of wire fraud and a count of theft of government funds, with federal prosecutors saying he got money from the government by making fake claims for tests that were never performed, were done incorrectly or for which a client had already paid. Alvi co-owned and ran the LabElite testing company in Chicago.
Block Club reported in March 2022 that FBI and other law enforcement agents had raided LabElite’s Norwood Park headquarters, and the lab had racked up numerous complaints with federal and state officials.
The indictment against Alvi, released Monday evening, alleges he and others set up a “scheme to defraud and to obtain money and property” through incorrect COVID-19 testing during some of the hardest days of the pandemic.
Alvi’s lab sought reimbursement from the federal government for tests Alvi knew had not been performed, for tests the lab had “modified” so the results weren’t reliable and for tests already paid for by customers, prosecutors said.
Alvi also directed the lab to give customers a negative result if they’d paid for expedited results — even when he knew the test had not actually been run on their sample, prosecutors said.
Alvi used the money from the lab to buy multiple luxury cars, and he had more than $6 million in his personal bank account when it was seized by the feds, prosecutors said.
The “scheme” took place between February 2021 and February 2022, prosecutors said.
That includes the time of the Omicron surge, when COVID-19 cases skyrocketed and people desperately sought out testing.
“The charges in this case allege that the defendant disregarded public health concerns in favor of personal financial gain. Doing so by compromising taxpayer-funded programs intended to fight the spread of coronavirus was particularly reprehensible,” acting U.S. Attorney Morris Pasqual said in a news release.
What Alvi and the lab did put people at risk and defrauded taxpayers, officials said.
Alvi could face up to 20 years in prison for each count of wire fraud and up to 10 years in prison if convicted of theft of government funds.
Lab Hid Positive Results, Feds Say
Alvi told the lab’s employees to falsely mark that tests had been performed when he knew they had actually been discarded and not tested, prosecutors said in the indictment. To hide that the tests had not been done, Alvi told employees to give customers negative results, prosecutors said.
When tests were “eventually” completed, the lab did not tell customers they were positive because they’d already falsely told them their result was negative, prosecutors said.
To increase the lab’s profits and reduce costs, Alvi told employees to alter their testing method so they’d use less material to process people’s specimens, even though he knew “that this made the test results unreliable,” prosecutors said. The company still asked the government to reimburse them for these tests, despite having used “this unreliable method,” according to the indictment.
Alvi directed the lab’s staff to hide the change in testing method from the lab directors so the lab could continue to claim money from the feds for the altered tests, prosecutors said.
Around November 2021 through January 2022, the lab saw an influx of tests to be processed as cased skyrocketed during the Omicron surge — but the lab couldn’t process or store so many tests, so Alvi told employees to dispose of specimens that hadn’t been tested, prosecutors said.
But between that December and January, Alvi still had the lab seek federal reimbursement for tests that were thrown away, prosecutors said.
Alvi also paid “test collectors” to bring his lab specimens so he could get more money from the federal government, prosecutors said.
A Bentley, Tesla And More Cars
Alvi had the “fraudulently obtained” funds from the government put into an account for the lab — then moved some funds into his personal account, which he used to buy things like cars, cryptocurrency and stocks, prosecutors said.
The indictment calls for Alvi to forfeit property from the alleged offenses if he is convicted — up to the amount of the $83.5 million the prosecutors say the company obtained from the federal government.
The government alleges Alvi used proceeds to buy a 2021 Mercedes-Benz, a 2021 Range Rover, a 2021 Lamborghini Urus, a 2021 Bentley and a 2022 Tesla.
Alvi also had more than $6.8 million in his personal bank account when it was seized in February 2022, about $810,000 in an E*Trade account, about $500,000 in an investments account and more than $245,000 in a Coinbase account, prosecutors said. They called for that money to be forfeited if he is convicted.
Read the indictment:
Prior Complaints About LabElite
Block Club reported in March 2022 that federal health inspectors found LabElite-partnered site in Iowa did not inform the government of thousands of test results, improperly handled rapid tests, did not have documented training for some staff members and did not have a qualified director on site.
The Illinois Attorney General’s Office and Centers for Medicare and Medicaid Services also reported complaints about the company’s Norwood Park headquarters.
HELP US REPORT: Have you been tested at a COVID-19 pop-up? Click here to tell Block Club about your experience.
Multiple LabElite customers told Block Club in 2022 that they experienced problems: They said results were badly delayed or never delivered, they got results that didn’t make sense, the company didn’t respond to their concerns and some were told to not enter their insurance information when testing, among other things.
LabElite is one of at least four Chicago-area testing companies facing various investigations: The Center for COVID Control shut down after being raided by the FBI, and the company and its lab have been sued, fined or otherwise faced discipline in several states after Block Club’s reporting. O’Hare Clinical Lab and Northshore Clinical Lab have been cited at the highest level by federal authorities.
These four Chicago-area testing companies processed millions of tests for hundreds of sites across the United States. They received more than $582 million from the federal government.
LabElite was registered with the state of Illinois in October 2020. The lab partnered with testing sites that collected rapid and PCR samples, with the PCR samples then processed by LabElite. It processed tens of thousands of tests from various states, including Illinois, Pennsylvania and Florida.
Debby Donovan, of suburban Berwyn, previously said she went to a city-organized mass testing event run by LabElite where she struggled to fill out a registration form on her phone. A worker there gave Donovan a paper form to fill out and told her to not put down her insurance, though she wrote her insurance information anyway, she said. The worker told Donovan it’d be quicker if she didn’t provide her insurance, she said.
A worker doing a PCR test for Donvan put a swab up her nose, immediately removed it and was done, Donovan said. The worker did not swirl the swab or keep it Donovan’s nose for several seconds, she said.
A rapid test at the site showed Donovan was positive, and she took an at-home test that also came back positive, she said. But LabElite later sent Donovan a PCR test result from the same event that said she was negative, she said.
A spokesperson for the company has previously denied allegations from customers.
READ MORE
• Embattled Center For COVID Control Testing Company Barred From Washington, Fined In Wisconsin
• LabElite, COVID Testing Lab Raided By FBI, Failed To Report Thousands Of Test Results, Feds Say
• FBI Raids Another Chicago COVID Testing Company — Which Has Gotten $77 Million From The Feds
• Troubled Center For COVID Control Must Prove It Followed State Rules, California Official Says
• Center For COVID Control Shutting Down Amid Federal, State Investigations, Employees Told
• Center For COVID Control’s Headquarters Raided By FBI
• Center For COVID Control Faked Test Results, Minnesota Attorney General Says In New Lawsuit
• Be Cautious Around COVID-19 Testing Pop-Ups, Illinois Attorney General Warns
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