A New York physician at the center of a sprawling COVID testing operation has admitted he turned the pandemic into a multimillion-dollar billing scam, pleading guilty Friday to federal charges tied to what prosecutors say was at least $24 million in fraudulent claims. Ali Rashan, founder and CEO of ClearMD, entered his plea before U.S. District Judge Paul A. Engelmayer and is scheduled to be sentenced on Sept. 22.
Prosecutors say ClearMD billed tens of millions for work it did not provide
According to a press release from the U.S. Attorney's Office, Southern District of New York, Rashan ran a network of ClearMD clinics across New York City from 2021 through 2023 and pushed out tens of thousands of claims to Medicare, Medicaid, the HRSA Uninsured Program and private insurers. Prosecutors say those claims were padded with evaluation and management codes and multiple COVID testing codes for services patients never actually received, generating at least $24 million in losses.
Alleged scheme used fake progress notes and custom software
Court filings and earlier reporting describe a clinic culture where staff were told to generate bogus progress notes and even build software to fabricate test results and encounter documentation that could prop up dubious claims. That pattern of billing multiple COVID test codes for a single visit, then creating false records to match, was laid out in a local breakdown of the Rashan case.
Legal consequences
Rashan pleaded guilty to one count of conspiracy to commit health care fraud and one count of making false statements relating to health care matters. Each charge carries a statutory maximum of five years in prison. Sentencing is scheduled for Sept. 22, 2026, and the case is being handled by the Office’s Complex Frauds and Cybercrime Unit, according to the U.S. Attorney's Office, Southern District of New York.
Part of a broader national crackdown
The plea lands against the backdrop of a 2025 national health care fraud takedown that charged hundreds of defendants and spotlighted more than $14 billion in alleged false billings, legal analysts note. That nationwide operation triggered renewed scrutiny of pandemic-era testing outfits and other providers, with legal commentary underscoring how high the stakes are for anyone caught gaming COVID relief and reimbursement programs, according to DeBevoise & Plimpton LLP.
ClearMD’s own website marketed the company as a citywide testing and care provider, a polished image that now sits in sharp contrast to prosecutors’ filings as the case heads toward sentencing. Those filings and related local coverage suggest many patients received a quick swab and an emailed result rather than the fuller exams and telehealth follow ups ClearMD sometimes advertised, a gap underscored by the company’s own description of its practice on ClearMD.
