Lab owner gets 7 years in prison for $14 million scheme to falsify COVID tests at height of pandemic
Zishan Alvi, 46, of Inverness, pleaded guilty to one count of wire fraud last year, admitting in a plea agreement with prosecutors that his lab fraudulently billed for hundreds of millions of dollars in government reimbursements in 2021 and early 2022, ultimately collecting at least $14 million in illegitimate taxpayer-backed payments.
In handing down the 84-month prison term, U.S. District Judge John Tharp called Alvi's actions a 'fraud on a massive scale,' one that not only showed a shocking level of greed but also sold out the safety of the public at a time when many were seeking reassurance through testing.
'People were scrambling to get tested for COVID because they didn't want to imperil the safety and health of the people they cared about,' Tharp said. 'A negative test was like a passport, 'You know, I tested negative. I can go see my grandma, I can go see my children with their newborn baby.' These were people who depended on that report to govern what they could safely do and not do.'
Tharp also said he was puzzled because Alvi did not have to turn to fraud. Originally from Pakistan, Alvi had overcome a difficult childhood and an abusive father to make something of himself in the U.S., the judge noted, graduating from DePaul University and working for 14 years in real estate before opening up his lab in the early days of the pandemic.
'He saw an opportunity to start a business that was going to be both profitable and helpful. That's admirable,' Tharp said. 'Where he went wrong was the opportunity to get rich, when he saw and tried to exploit the chaos that was occurring in this country as people were scrambling for ways to address the COVID problem.'
Prosecutors said Alvi used the ill-gotten gains for personal expenditures, including a Tesla, Land Rover, and Mercedes, as well as investments in stocks and cryptocurrency.
In addition to the prison term, Tharp ordered Alvi to pay $14.2 million in restitution. Records show prosecutors have already seized about $8 million in various bank and brokerage accounts as well as some of the vehicles.
Before he was sentenced, a tearful Alvi stood at the lectern and read an apology from a piece of paper, telling the judge in a wavering voice he was 'filled with remorse and a deep sense of regret' for his 'selfish decisions.'
'I should never have put profits ahead of the job we intended to do for the public,' Alvi said, as several relatives wiped tears from their eyes in the courtroom gallery. 'I should have put the people first.'
Alvi's attorney, Tom Breen, had asked for leniency, telling the judge his client has three young daughters and is described by all who know him as an 'optimistic' and generous man.
'He started this to do a good job, provide a good service,' Breen said. 'At some point in time he cut corners and then eventually out-and-out cheated, and he's going to pay a hefty price for that. He really is. But he is a good man.'
Assistant U.S. Attorney Jared Hasten had asked for a 9-year prison sentence, emphasizing that, in a bid to make more profits, Alvi diluted materials used in the tests to such an extent that the results were inconclusive. He then directed employees to tell patients with inconclusive results that their tests were negative.
At least some of those patients then went to another testing site and discovered they actually did have COVID, prosecutors said.
When the Omicron surge hit in late 2021 and Alvi's lab became overwhelmed, he ordered employees to 'just throw away thousands of tests — don't process them' yet still billed the government millions of dollars, Hasten said.
Alvi's employees also reported the laboratory was not storing specimens properly, 'and after three or four weeks of sitting onsite had developed mold, but those employees were nonetheless told to process those tests,' according to a recent prosecution filing.
Photos included in the filing showed test specimens piled up in the lab in overflowing garbage bags and boxes.
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