PANDEMIC FRAUD EXPOSED: Illinois Lab Owner Accused of Billing Taxpayers $66 Million for 380,000 COVID Tests That Never Happened
Federal authorities have charged the operator of an Illinois medical laboratory with orchestrating a massive COVID-19 testing fraud scheme that allegedly generated more than $66 million in bogus government claims, including charges for at least 380,000 tests that prosecutors say were never performed.
Rajesh “Raj” Patel, 52, of Schaumburg, Illinois, was indicted by a federal grand jury on five counts of wire fraud. Each charge carries a maximum sentence of 20 years in federal prison if he is convicted.
Investigators allege that Patel, who served as co-owner and chief operating officer of a laboratory in the Chicago metropolitan area, took advantage of federally funded pandemic testing programs by submitting claims for nonexistent tests and collecting tens of millions of dollars in reimbursements.
“This defendant allegedly exploited a global crisis for personal gain, fabricating hundreds of thousands of COVID-19 tests, then billing the taxpayer for it,” said Assistant Attorney General Colin M. McDonald, head of the Justice Department’s Fraud Division.
According to the indictment, the operation began taking shape around March 2021, when Patel’s laboratory entered into arrangements with a medical staffing company that was supposed to collect COVID-19 specimens and provide the corresponding patient information.
The laboratory paid the staffing business tens of millions of dollars for those services. Federal investigators, however, contend that a substantial number of the purported patients either did not exist or had never provided specimens for testing.
Prosecutors say Patel subsequently generated fabricated test results to support claims for laboratory services that had never taken place. Between May 2021 and April 2022, the laboratory allegedly produced false negative COVID-19 results for at least 380,000 tests that were never conducted.
Those manufactured results were then used to seek reimbursement through a federal program established to cover COVID-19 testing for uninsured individuals during the pandemic.
Authorities estimate that the laboratory submitted approximately $66.2 million in fraudulent claims and received roughly $44.1 million in government payments. Of that amount, prosecutors allege, Patel personally obtained approximately $28 million.
The FBI said the allegations illustrate how programs intended to provide medical assistance during a national emergency became targets for individuals seeking to exploit government funding.
“Pandemic assistance programs were designed to provide a lifeline to vulnerable members of society,” said Ryan Whalen, special agent in charge of the FBI’s Chicago office. “Those who are entrusted with federal healthcare dollars have a responsibility to bill honestly and accurately.”
The prosecution comes amid continuing federal efforts to investigate and recover money allegedly stolen through COVID-era assistance programs, many of which distributed enormous sums under emergency procedures designed to get financial help to businesses, healthcare providers and individuals as quickly as possible.
Kansas Attorney General Kris Kobach, discussing pandemic fraud during a Newsmax interview last month, said the rapid distribution of government assistance created opportunities for widespread abuse.
“We all remember during COVID how it was … it really was like a piggy bank,” Kobach said during an appearance on “National Report.”
Kobach specifically pointed to the Paycheck Protection Program, which provided federal assistance to businesses struggling during the pandemic, as an example of a program in which he believed insufficient safeguards allowed fraudulent applications to slip through.
“This PPP program, I heard from various businesses how easy it was and how little checking there was when the money was handed out,” Kobach recalled, referring to the Paycheck Protection Program for small businesses. “And I think many people just assumed they were going to get away with it.”
Although identifying the overall scope of pandemic-related fraud is relatively straightforward, Kobach said the more difficult challenge involves tracking down individual offenders, bringing criminal charges and recovering money that has already been distributed.
“But the hard work of actually prosecuting the cases, doing the investigations, and then getting the money back is what’s happening right now,” he said.
“It’s something that’s going to take many years, multiple administrations to start clawing all this money back,” he added, “and then create an atmosphere of deterrence so that the fraudsters say, ‘Hey, you know what, my buddy’s in jail right now and I’m not going to be able to get away with this.'”
The Justice Department said the case is being investigated by the FBI’s Chicago field office and the Department of Health and Human Services Office of Inspector General. Trial attorney Claire Sobczak Pacelli of the department’s Health Care Fraud Section is handling the prosecution.
Federal officials also pointed to the broader crackdown on healthcare fraud. Since 2007, the Justice Department’s Health Care Fraud Strike Force program has charged more than 6,200 defendants accused of collectively billing federal healthcare programs and private insurers over $45 billion.
The Patel indictment follows other major pandemic-related fraud prosecutions in Illinois. In June 2025, Chicago laboratory owner Zishan Alvi was sentenced to seven years in federal prison for a separate COVID-19 testing scheme that resulted in more than $14 million in improper government payments. Alvi was also ordered to pay restitution and forfeit millions of dollars in assets.
The Justice Department has additionally established a National Fraud Enforcement Division to pursue fraud involving federal benefits and assistance programs, working alongside the Trump administration’s broader initiative to identify and combat misuse of taxpayer funds.
Patel has not been convicted, and the charges against him remain allegations. He is presumed innocent unless proven guilty in court.
{Matzav.com}
