Americans who ordered Covid-19 tests advertised as 'no cost' online during the pandemic were allegedly at the centre of a healthcare fraud scheme that generated more than $500 million in false claims, according to the US Department of Justice.
Prosecutors said the company behind the tests used customers’ insurance information to bill government-backed healthcare programmes for medical services that were never provided.
Hasan “Lucas” Seyhun, 45, of Miami, Florida, pleaded guilty on Wednesday to conspiracy to commit healthcare fraud. Seyhun was the Chief Operating Officer of New York-based Fast Lab Technologies, LLC, which offered people 'no cost' Covid-19 tests that could be ordered through its website during the pandemic.
According to court documents, Fast Lab allegedly used the insurance details provided by customers to submit claims for Covid-19 testing services that had not actually taken place. The claims included services linked to antigen tests, saliva samples and PCR testing.
Prosecutors said the company claimed that medical professionals had observed antigen tests, collected saliva samples and conducted PCR testing, even when those services had not been provided.
The case centres on how the insurance information of people seeking Covid-19 tests was allegedly used after they placed their orders. Prosecutors said Seyhun worked with previously charged defendants Cemhan “Jimmy” Biricik, Fast Lab’s CEO, and Dr Martin Perlin, the company’s Medical Director, to carry out the scheme.
Seyhun also admitted that, as COO, he helped orchestrate the submission of millions of dollars in fraudulent healthcare claims.
The US Attorney’s Office for the Eastern District of Michigan said the scheme resulted in more than $500 million in fake claims being submitted to government-backed healthcare programmes.
Seyhun admitted that the fraud resulted in at least $35 million in illicit payments. He has agreed to a forfeiture money judgment of $4,313,153. The amount represents the money he personally received from the scheme.
Prosecutors also said the company sometimes submitted claims before customers had even received their Covid-19 test kits.
US Attorney Jerome F Gorgon Jr said the alleged conduct took advantage of the fear and isolation surrounding the pandemic.
“Ripping off the American taxpayer is bad enough. Using the fear and isolation of the Covid pandemic to do it is sickening,” Gorgon said.
“Not only did Seyhun and his co-conspirators defraud the American public of hundreds of millions of dollars’ worth of fake services, but they were so confident in their scheme that they routinely submitted claims for payment before test kits were even delivered to the customer,” Attorney Gorgon added.
According to The Justice Department, Seyhun’s guilty plea was part of a wider investigation into pandemic-related healthcare fraud. The investigation involved several federal and state agencies, including the FBI Detroit Field Office, the US Department of Health and Human Services Office of Inspector General, the Office of Personnel Management Office of Inspector General and the Michigan Attorney General’s Medicaid Fraud Control Unit.
The alleged fraud involved several types of Covid-19 testing services. Prosecutors said Fast Lab submitted claims stating that antigen tests had been observed by medical professionals. Antigen tests are used to detect proteins from the virus.
The company also allegedly claimed that saliva samples had been collected by medical personnel. Those samples were then allegedly billed as having undergone PCR testing. PCR tests detect genetic material from the virus and were widely used for Covid-19 diagnosis during the pandemic.
The government said the use of customers’ insurance information allowed the company to seek payments for services connected to tests that people had ordered online.
Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division said Seyhun and his colleagues had exploited public trust during the pandemic.
“At a time when Americans were scared for their families and their futures, Hasan Seyhun saw an opportunity to turn a national crisis into his own personal payday,” McDonald said.
“Instead of providing the American people with the assistance they needed during a critical time, Seyhun and his colleagues exploited their trust, and lined their pockets from fraudulent insurance claims,” he added.
The FBI also said the scale of the alleged scheme affected healthcare funding and public trust. Jennifer Runyan, Special Agent in Charge of the FBI Detroit Field Office, said, "A scheme of this magnitude undermines public trust and diverts critical healthcare dollars away from the people and programs who need it most. Today’s guilty plea is an important step toward accountability for conduct that resulted in hundreds of millions of dollars in fraudulent billings,” Runyan said.
