A North Side man has been charged with participating in a scheme to fraudulently bill $6.2 million to Medicare in just over a month for COVID-19 tests that were never performed, part of what prosecutors say is an ongoing crime “epidemic” that has bilked tens of millions of dollars from government-funded pandemic-relief programs.
Fasiur Syed, 46, a native of India who has lived in Chicago for the past eight years, was arrested last week on a criminal complaint charging him with health care fraud. Prosecutors asked that he be held without bond pending trial, arguing he had little incentive to remain here to face the charges and could be under threat from other behind-the-scenes co-schemers.
“These schemes are an epidemic in this district and they need to be stopped,” Assistant U.S. Attorney Brian Hayes said at a detention hearing Thursday.
Syed’s attorney, Jack Corman, argued Syed was a relatively low-level cog and made little money himself from the alleged fraud. He lives with his cousin in an apartment in Chicago’s West Rogers Park neighborhood and is employed as a ride share driver and Amazon warehouse worker, Corfman said.
U.S. Magistrate Judge Jeffrey Cole said he was taking a chance letting Syed, who is not a U.S. citizen, out on bond, but that prosecutors had not met their burden to keep him locked up. He ordered Syed freed on a $25,000 unsecured bond and required him to surrender his passport and submit to a curfew during non-working hours.
The judge also warned Syed that his life would become much more complicated if he tried to run.
“Don’t flee,” Cole said. “They will catch you.”
According to the 27-page complaint, law enforcement earlier this year detected an “extraordinary spike in billing” for COVID-19-related tests from a Bensenville-based laboratory called Advanced Diagnostic Solutions, Inc, which was incorporated under Syed’s name.
From Jan. 29 to March 13, a period of just 38 days, Advanced Diagnostic Solutions billed approximately 29,411 claims to the Medicare program, with payment of approximately $6.2 million, according to the complaint.
Over 97% of the “patients” Syed’s lab billed for live outside Illinois, including New York, California, Florida, Alaska, Puerto Rico, and Hawaii, the complaint stated. Many of those interviewed by law enforcement said they had never been tested for COVID, never sought such tests, and never heard of Advanced Diagnostic Solutions.
Syed’s company submitted one bill to Medicare for $323, claiming to have performed tests for a patient identified as “JC” in January, the complaint stated. On Feb. 7, JC, who lives in Arkansas, told agents they “had never had their mouth or nose swabbed” and there was “no way in this world” they had received any COVID-19 tests from Syed’s company, according to the complaint.
Agents tracked the company’s bank transactions to a Chase branch on West Peterson Avenue, near Syed’s apartment, according to the complaint. After Syed was arrested on May 24, he told agents he was being directed to make the transactions by someone he knew as “Afroz,” who had promised to pay him $50,000 to $70,000 for fronting his name on the company and acting as signatory for the bank accounts, the complaint stated.
“Syed claimed he did not know who performed the billing or purchases lab supplies for Advanced Diagnostic Solutions,” the charges stated. “Syed stated his conduct was wrong at the time, it was easy money, and yet he engaged in the conduct anyway.”
The charges were the latest court action to stem from a wave of similar fraud schemes, mostly taking advantage of government programs to ease costs for consumers for pandemic-related testing, including a recent effort by the Biden administration to provide free at-home test kits to anyone by having the providers directly bill Medicare.
Court records show federal investigators have recently seized nearly more than $60 million in bank accounts around the Chicago area tied to companies engaged in similar schemes as Advanced Diagnostic Solutions.
Last year, federal authorities filed warrants to seize $43 million in fraudulent Medicare payments for test kits billed by a shell company called SK Diagnostics, which was headquartered in an empty store front on North Cicero Avenue, court records show.
Another warrant earlier this year sought to hold $5.1 million in Medicare payments to a company called State Scientific, which like Syed’s company had billed a massive amount of tests in a very short time period, court records show.
On June 5, 2023, law enforcement went to State Scientific’s so-called headquarters in the 1500 block of North Mannheim Road in Stone Park and found that it was actually a restaurant, court records show.
“Immediately next to the restaurant was a vacant area with a sign that read, ‘For Rent,” with no apparent presence of State Scientific,” the seizure warrant stated.
And last month, Baqar Hussain Razv Syed, who is not related to Fasiur Syed, pleaded guilty in Chicago’s federal court to being the front man for a fraud involving Schaumburg-based Luna Labs, which in one three-month period in 2023 billed Medicare for more than $14 million in fraudulent tests, court records show.
Baqar Syed’s plea agreement with prosecutors stated his co-schemers, who have not been charged, agreed to pay him $10,000 a month for his services.
He is scheduled to be sentenced by U.S. District Judge Matthew Kennelly on July 18.
jmeisner@chicagotribune.com