Damian Williams, the United States Attorney for the Southern District of New York, Elysia Doherty, Assistant Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that the United States has filed a Complaint against LABQ CLINICAL DIAGNOSTICS, LLC (“LABQ”); COMMUNITY MOBILE TESTING, INC. (“CMT”); DART MEDICAL LABORATORY, INC. (“DART MEDICAL”); and their CEO, MOSHE LANDAU (collectively, the “Defendants”), alleging that the Defendants fraudulently billed the federal program that reimbursed health care providers for COVID-19 testing provided to uninsured persons (the “Uninsured Program”). The lawsuit seeks damages and civil penalties under the False Claims Act as well as a recovery of government funds under the common law.
Prior to seeking reimbursem*nt for COVID-19 testing services from the Uninsured Program, testing providers were required to attest to the Health Services and Resources Administration (“HRSA”), a component agency within the U.S. Department of Health and Human Services (“HHS”), that they had confirmed their patients were uninsured and that no one else would pay for the cost of the COVID-19 testing. However, as alleged in the Complaint, the Defendants frequently knowingly submitted, or caused to be submitted, claims to the Uninsured Program for COVID-19 testing in instances when the cost of the COVID-19 testing had been (or would be) reimbursed by another source and/or the COVID-19 testing had been provided to persons who had health coverage on the relevant date of the service. The Complaint alleges that the Defendants’ fraudulent scheme drained limited funds appropriated by Congress to cover COVID-19 testing costs for uninsured persons.
U.S. Attorney Damian Williams said: “As alleged, LabQ, CMT, Dart Medical, and their CEO, Moshe Landau, fraudulently took tens of millions of dollars from the Uninsured Program for the testing of individuals with health care coverage, and thereby depleted the funds that Congress authorized for the testing of uninsured individuals who truly needed the federal assistance. This Office will hold accountable those who divert federal funds designed to provide critical medical care to the uninsured population of this city and nation in order to line their own pockets.”
HHS-OIG Assistant Special Agent in Charge Elysia Doherty said: “It is alleged in this case that the defendants knowingly sought reimbursem*nts from federal funds available during the COVID-19 pandemic to which they were not entitled. We will continue to work with our law enforcement partners to seek resolutions and effect change to preserve the integrity of the federal health care system.”
FBI Assistant Director in Charge James Smith said: “Moshe Landau, the CEO of various COVID-19 testing companies, allegedly defrauded a federal healthcare program by submitting illegitimate claims to receive unlawful reimbursem*nts. Collecting tens of millions of dollars in reimbursem*nts, Landau and his companies allegedly took advantage of a government initiative that provided support and assistance to healthcare providers during a global pandemic. The FBI is committed to ensuring that people like Landau are rightfully held accountable for their knowing attempts to deceive the government for personal gain, and for exploiting programs designed to serve vulnerable citizens.”
The following allegations are based on the Complaint filed in Manhattan federal court on June 13, 2024:
During the COVID-19 pandemic, LABQ provided COVID-19 testing for school districts and nursing homes, as well as to walk-up patients at numerous LABQ-branded vans and tents located on public streets in New York City. LABQ and DART MEDICAL received approximately $130 million from the Uninsured Program for COVID-19 Testing. In direct contravention of their promises and attestations to HRSA, however, the Defendants frequently submitted, or caused to be submitted, ineligible and fraudulent claims to the Uninsured Program for COVID-19 testing in instances when the cost of the COVID-19 testing had been (or would be) reimbursed by another source and/or the COVID-19 testing had been provided to persons who had health coverage on the relevant date of the service.
More specifically, the Defendants engaged in the following schemes: LABQ, DART MEDICAL, and LANDAU double-billed the Uninsured Program and other health care programs and private institutions for the same COVID-19 testing; LABQ and CMT employees frequently told patients and customers, in sum and substance, that LABQ did not need insurance information and, in instances when LABQ possessed patient insurance information, LABQ, DART MEDICAL, and LANDAU often submitted claims (or caused claims to be submitted) to the Uninsured Program for those patients; and in clear violation of the Uninsured Program’s Terms and Conditions, LABQ, LANDAU, and DART MEDICAL, as a matter of policy, sought reimbursem*nt (or caused others to seek reimbursem*nt) from the Uninsured Program for COVID-19 tests provided to people with health care coverage in instances where LABQ, LANDAU, and DART MEDICAL believed that the patient’s insurer might deny LABQ or DART MEDICAL’s claim for reimbursem*nt.
As a result of the Defendants’ fraudulent conduct, the Uninsured Program paid tens of millions of dollars to LABQ and DART MEDICAL to which they were not entitled. Further, at LANDAU’s direction, LABQ, CMT, and DART MEDICAL disbursed a significant portion of these funds to LANDAU’s personal bank accounts.
Through these practices, the Defendants improperly obtained tens of millions of dollars from the Uninsured Program in violation of both the False Claims Act and the common law.
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The Government intervened, in part, in two whistleblower lawsuits before U.S. District Judge Lewis J. Liman that had previously been filed under seal pursuant to the False Claims Act.
Mr. Williams thanked HHS-OIG, the FBI, HHS, and HRSA for their assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Zack Bannon, Lawrence H. Fogelman, Charles S. Jacob, and Danielle J. Marryshow are in charge of the case.
