Indian-origin lab owner charged in $66 million COVID-19 test fraud: How the alleged US healthcare scam worked

An Indian-origin laboratory owner in Illinois has been charged with five counts of wire fraud over an alleged scheme involving 3.8 lakh COVID-19 tests that prosecutors say were never conducted. 

An Indian-origin laboratory owner in the US has been accused of running an alleged $66.2 million (about ₹628.7 crore) fraud scheme by billing for 3.8 lakh COVID-19 tests that his laboratory allegedly never conducted, the US Department of Justice said in a statement.

Rajesh “Raj” Patel, 52, from Schaumburg, Illinois, has been charged with five counts of wire fraud. If convicted, he could face up to 20 years in prison on each count.

How the alleged COVID-19 testing fraud worked

Between May 2021 and April 2022, Patel allegedly created 3.8 lakh fake negative test results for samples linked to Meridian Medical Staffing Inc. He then billed the US Health Resources and Services Administration (HRSA) Uninsured Program for the tests, according to the Department of Justice statement.

The federally funded programme covered the cost of COVID-19 testing for people without health insurance.

Prosecutors allege that Patel, who was also the chief operating officer of a clinical laboratory in Hillside, Illinois, fabricated negative test results to obtain payments through the federal programme.

Court documents show that Patel’s laboratory processed polymerase chain reaction (PCR) tests during the COVID-19 pandemic.

Around March 2021, the laboratory entered into an agreement with Meridian Medical Staffing Inc. Under the arrangement, the laboratory paid Meridian tens of millions of dollars to collect test samples and provide related biological information about the purported patients.

However, many of these patients either did not exist or had never provided samples to Meridian, the Department of Justice said.

The laboratory allegedly submitted about $66.2 million in fraudulent claims to the programme and received approximately $44.1 million in payments. Patel personally obtained nearly $28 million from the alleged scheme, the statement added.

US prosecutors say pandemic assistance was misused

Assistant Attorney General Colin M McDonald of the Justice Department’s fraud division said in a statement, “This defendant allegedly exploited a global crisis for personal gain, fabricating hundreds of thousands of COVID-19 tests – then billing the taxpayer for it.”

FBI Chicago Special Agent in Charge Ryan Whalen said, “Fighting financial fraud and holding accountable those who unlawfully obtain federal assistance for personal profit remains a top priority for the FBI.”

“Pandemic assistance programs were designed to provide a lifeline to vulnerable members of society. Those who are entrusted with federal healthcare dollars have a responsibility to bill honestly and accurately, and the FBI and our partners will stop at nothing to ensure that those who deceive and steal taxpayer dollars for their own purposes face full justice,” Whalen added.

US healthcare fraud investigations

The Department of Justice said its programme has charged more than 6,200 defendants since 2007 in cases involving over $45 billion in alleged fraudulent billing to federal healthcare programmes and private insurers.

Patel has been charged with five counts of wire fraud. The allegations have not been established as proven in court.

About the Author

Anjali Thakur is a Senior Assistant Editor with Mint, reporting on trending news, entertainment and health, with a focus on stories driving digital conversations. Her work involves spotting early signals across news cycles and social media, sharpening stories for SEO and Google Discover, and mentoring young editors in digital-first newsroom practices. She is known for turning fast-moving developments—whether news-driven or culture-led—into clear, tightly edited journalism without compromising editorial rigour.<br><br> Before joining Mint, she was Deputy News Editor at NDTV.com, where she led the Trending section and covered viral news, breaking developments and human-interest stories. She has also worked as Chief Sub-Editor at India.com (Zee Media) and as Senior Correspondent with Exchange4media and Hindustan Times’ HT City, reporting on media, advertising, entertainment, health, lifestyle and popular culture.<br><br> Anjali holds a Bachelor of Arts degree from Miranda House, and is currently pursuing an MBA, strengthening her understanding of business strategy and digital media economics. Her writing balances newsroom discipline with a clear instinct for what resonates with readers.