A 36-year-old Indian national living in Des Plaines, Illinois has pleaded guilty to orchestrating a $227 million Medicare fraud scheme that relied on personal data from hundreds of thousands of beneficiaries, much of it purchased from a company based in Pakistan. Syed Murtuza Kablazada admitted to two counts of health care fraud tied to a scheme that billed Medicare for COVID-19 test kits that were never requested or delivered.
According to the U.S. Department of Justice, Kablazada and his co-conspirators purchased the personally identifiable information of hundreds of thousands of Medicare beneficiaries from the Pakistan-based firm and used it to bill the federal program for test kits that beneficiaries never saw. Reporting from The American Bazaar detailed that the scheme stretched over roughly six months, beginning in January 2023, during which Kablazada and his associates acquired three Chicago-area laboratories — Chicago Care, V Care and Al-Ameer — to carry out the billing scam.
How the Scheme Moved Money and Data
Per the same American Bazaar account, Kablazada paid approximately $11 million to the purported Pakistan-based telemarketing company that supplied the beneficiary data used to generate the fraudulent claims. The laboratories then submitted roughly $227 million in claims for COVID-19 test kits that beneficiaries did not request or receive, and Medicare ultimately paid out approximately $136 million of those claims — a figure the Justice Department attributes directly to the fraud scheme.
The defendants allegedly moved their proceeds through overseas money transfers and unlicensed money transmitters to pay themselves, the report states, and spent some of the money on luxury vehicles. Kablazada has agreed to forfeit more than $46 million in fraud proceeds that were seized from ten bank accounts as part of the case.
Sentencing Still Pending
Kablazada faces a maximum sentence of 20 years in prison, though no sentencing date has been announced. A federal district court judge will determine his final sentence after weighing the U.S. Sentencing Guidelines and other statutory factors, according to the same reporting.
The case was investigated by the FBI's Chicago Field Office and the HHS Office of Inspector General. The guilty plea was announced by Colin M. McDonald, Assistant Attorney General of the Justice Department's National Fraud Enforcement Division; Ryan Whalen, FBI Chicago Special Agent in Charge; and Thomas Ethridge, HHS-OIG Special Agent in Charge. Patrick Mott and Claire Sobczak Pacelli are prosecuting the case for the Justice Department's Fraud Division, Health Care Fraud Section, with Andres Almendarez assisting for the Northern District of Illinois.
Part of a Broader Federal Crackdown
The prosecution falls under the Justice Department's Fraud Division, which the department announced the creation of in April and which focuses on investigating and prosecuting people and organizations accused of defrauding the American public. That division is part of President Donald Trump's Task Force to Eliminate Fraud, chaired by Vice President JD Vance, which addresses fraud, waste and abuse across federal benefit programs.
The division works alongside the Health Care Fraud Strike Force Program, which has operated since 2007 through nine strike forces spread across federal districts. That program has charged more than 6,200 defendants who were collectively accused of billing more than $45 billion to federal health care programs and private insurers, per the American Bazaar report. The Centers for Medicare & Medicaid Services and HHS-OIG are described as taking additional steps to hold providers accountable for fraudulent billing schemes.
Not an Isolated Case
COVID-19 testing fraud has drawn sustained federal attention in recent years. The HHS Office of Inspector General documented a nationwide enforcement action targeting fraudulent Medicare charges for over-the-counter COVID-19 test kits, with losses in that action exceeding $203 million. The inspector general's office has also warned consumers directly, noting in a fraud alert that scammers have sold fake or unauthorized at-home COVID-19 test kits in exchange for personal or medical information, and that Medicare will not call beneficiaries to offer COVID-19-related products or services.
Elsewhere, the Justice Department reported that a federal jury in the Southern District of Florida convicted a Florida man who served as vice president of a testing laboratory and also ran a separate marketing company for his role in a fraud scheme that exploited patients seeking COVID-19 tests during the pandemic.
