Illinois Men Face Additional Charges for Health Care Fraud and Money Laundering Conspiracy

Two Illinois brothers were indicted yesterday in a superseding indictment on charges related to a scheme to defraud Medicare, Medicaid and private health care insurers and for participating in a money laundering conspiracy with the fraud proceeds.

"These defendants are charged with a brazen scheme to steal nearly $300 million from vital health care programs by taking advantage of the fear and panic of the COVID-19 pandemic," said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department's Criminal Division. "These charges make clear that the Criminal Division will never rest in its pursuit of those who try to exploit the most vulnerable members of our society, the elderly and the disabled, for their own personal gain."

"The defendants chose to enrich themselves and deprive the most vulnerable members of society from much needed assistance designed by the U.S. Government to provide critical relief efforts," said , Special Agent in Charge Douglas S. DePodesta of the FBI Chicago Field Office. "Health care fraud affects everyone - it costs taxpayers millions of dollars, contributes to rising health insurance premiums, and depletes resources from our vital health care system. The FBI is committed to working with all our law enforcement and prosecutorial partners to ensure that anyone who dares to exploit government programs intended to assist the American people will be held fully accountable under federal law."

"Allegedly billing almost $300 million dollars to taxpayer-funded health care programs for services that were never provided is a staggering abuse of public resources," said Deputy Inspector General for Investigations Christian J. Schrank of the U.S. Department of Health and Human Services, Office of Inspector General. "These charges demonstrate HHS-OIG's unwavering resolve to hold accountable those who exploit federal health care programs and betray the public trust."

According to court documents, Minhaj Feroz Muhammad, 37, and Sufyan Feroze, 35, both of Naperville, owned and controlled, sometimes through straw owners, four clinical laboratories located in Illinois and California. Their scheme allegedly sought to defraud Medicare, Medicaid and private insurers by submitting fraudulent claims of over $293 million for COVID-19 laboratory testing services that were never provided, for which insurers paid at least approximately $65 million in reimbursements.

Additionally, as alleged in the superseding indictment, the defendants participated in a money laundering conspiracy by transferring fraud proceeds between laboratories and other businesses controlled by the defendants, ultimately using the funds to purchase real estate, including luxury developments overseas, gold bars, luxury watches and luxury vehicles.

Each defendant has been charged with six counts of health care fraud and one count of money laundering conspiracy. Feroze has also been charged with one count of engaging in a monetary transaction in criminally derived property in excess of $10,000.

If convicted, the defendants face a maximum penalty of 10 years in prison on each health care fraud charge and 20 years in prison on the conspiracy to commit money laundering charge. If convicted, Feroze faces an additional 10 years in prison on the engaging in a monetary transaction in criminally derived property charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

FBI and HHS-OIG are investigating the case.

Trial Attorney Kelly M. Warner of the Criminal Division's Fraud Section is prosecuting the case.

The Fraud Section leads the Criminal Division's efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,800 defendants who collectively have billed federal health care programs and private insurers more than $30 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.