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Charges Filed in Shameful COVID-19 and Genetic-Cancer-Screening Test Scam

Posted  April 3, 2020

Erik Santos of Braselton, Georgia had run a fraudulent genetic cancer-screening-test scheme for months, then spotted an opportunity capitalize on fear surrounding COVID-19.  According to the criminal complaint, Santos targeted elderly persons to determine if they met certain eligibility requirements for testing under government health-care programs.  He passed the information along to co-conspirator testing companies, who would arrange for doctors (none of whom had previously treated the patients) to write prescriptions for these medically unnecessary cancer-screening tests.  Santos used “downstream suppliers” find such patients in assisted living facilities, hospitals, urgent care centers, and medical practices.  He collected test kits with specimens to provide to the testing centers, sometimes falsifying the test dates to account for prescriptions written after the fact.  Santos received a per-test kickback of $1,750 per Medicare-reimbursement.

Santos’ scheme took a decidedly darker turn in March 2020 with the rise in COVID-19 cases and the beginning of a pandemic.  He began to enlarge his fraudulent enterprise to include kickbacks related to COVID-19 tests and accompanying Respiratory Pathogen Panels (RPP).  In reference to the money to be made, he texted:

“Govt ok’d all copays and deductables [sic] across the board for this so it is huge. I just got a call to service the [Department of Defense] with one of our channel partners”

In a later recorded call, he said:

“[T]he good thing is we’re opening a lot of doors through this coronavirus testing.”

“[W]hile there are people going through what they are going through, you can either go bankrupt or you can prosper.”

Even more deplorably, Santos worked out that he made more money if he provided COVID19 tests to patients unlikely to test positive, because a negative result would spin off a more expensive RPP follow-up test.  He targeted his scheme accordingly, saying:

“we’re trying  to  have  more  of  the  asymptomatic  patients going through,” and, “if we got 1,000 tests a day to do, we don’t want 999 coming in at just COVID. What it does its gonna bankrupt everybody. It’s not gonna work.”

Thus, Santos’ COVID19 testing scheme specifically incorporated medically unnecessary testing and did not even incidentally benefit patients who might have needed the COVID19 testing the most.

The FBI arrested Santos in late March 2020 and charged him with conspiring to violate the Anti-Kickback Statute and conspiracy to commit health care fraud.  Federal enforcement officials spared no harsh word in condemning Santos for “preying on people’s fear in order to defraud the government and make money for himself” — U.S. Attorney for the District of New Jersey Craig Carpenito.  Mr. Carpentino decried “this kind of despicable pandemic profiteering.”

“[T]his case takes things to a new low,” said Newark FBI Special Agent-in-Charge Gregory W. Ehrie.  “This defendant not only allegedly defrauded the government, he conspired to bilk his fellow citizens of a valuable resource that’s in high demand.  His profiteering is akin to receiving blood money.”  He further vowed to “capture anyone who puts money before humanity.”

“Individuals seeking to fraudulently profit during the COVID-19 global pandemic undermine the government’s response, jeopardize medical professionals and endanger the public,” said DCIS Special-Agent-in-Charge Leigh-Alistair Barzey.

The C|C whistleblower team couldn’t have said it better.  We are closely following government response and guidance to the COVID-19 crisis in programs at CMS, the FDA, the SBA, the SEC, and the CFTC and elsewhere.  Many initiatives involve areas in which prior whistleblowers have exposed cheating under the False Claims Act, including fraudulent laboratory testing, telehealth, the pharmaceutical industry, and small business programs.  We remain dedicated to providing whistleblowers and potential whistleblowers with support and legal guidance, particularly with newly heightened vulnerabilities that might easily be abused by unscrupulous actors.

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Tagged in: Anti-Kickback and Stark, CC Lawyers, COVID-19, FCA Federal, Healthcare Fraud, Importance of Whistleblowers, Laboratory and IDTF, Lack of Medical Necessity, Provider Fraud,