Lavaca resident charged in $143 million fraud scheme related to COVID testing

Billy Joe Taylor of Lavaca was charged with fraud related to COVID-19 testing as part of a nationwide investigation into health care fraud schemes that exploited the pandemic and resulted in more than $143 million in false billings, according to the U.S. Department of Justice.

The DOJ on Wednesday (May 26) announced criminal charges against 14 defendants, including 11 newly-charged defendants and three who were charged in superseding indictments, in seven U.S. federal districts for their alleged participation in the fraudulent schemes.

Taylor, 42, was charged by criminal complaint with health care fraud in connection with an alleged scheme to defraud the United States of over $88 million, including over $42 million in false and fraudulent claims during the pandemic that were billed in combination with claims that were submitted for COVID testing and other respiratory illnesses.

Taylor, the owner and operator of Vitas Laboratories and Beach Tox, two testing laboratories, allegedly used access to beneficiary and medical provider information from prior laboratory testing orders to submit fraudulent claims for urine drug tests and other laboratory tests, including respiratory pathogen panel and COVID tests, that were not ordered or performed. The complaint also alleges that hundreds of claims were submitted for beneficiaries after they had died or otherwise ceased providing samples.

“While the COVID-19 pandemic was raging, and Americans were suffering from the economic and health crisis brought on by this pandemic, these defendants were allegedly scheming to steal millions of dollars set aside to help ailing Americans through COVID-19 testing and other federal health-care programs,” Acting U.S. Attorney for the Western District of Arkansas David Clay Fowlkes said in a statement. “This case demonstrates the importance of investigating and prosecuting those who would seek to line their own pockets by stealing funds set aside to help those struggling with the symptoms of COVID-19 and other health ailments.”

Following were other defendants identified in the Wednesday announcement.

• Mark Schena, 58, of Los Altos, Calif., the president of Arrayit Corporation, is charged along with two others, the Arrayit Vice President of Marketing and the President of an Arizona marketing organization, in connection with the submission of over $70 million in false and fraudulent claims for allergy and COVID-19 testing.

• Petros Hannesyan, 36, of Burbank, Calif., was charged with the theft of government property and wire fraud in connection with $229,454 that he obtained from COVID-19 relief programs.

• Michael Stein, 35, and Leonel Palatnik, 42, both of Palm Beach County, Fla., were charged in connection with an alleged $73 million conspiracy to defraud the United States and to pay and receive health care kickbacks during the COVID-19 pandemic.

• Juan Nava Ruiz, 44, and Eric Frank, 47, both of Coral Springs, Fla., were charged for an alleged $9.3 million health care kickback scheme, along with Christopher Licata, 44, of Boca Raton, Florida, who was previously charged in a separate Indictment.

• Malena Lepetich, 38, of Belle Chase, La., was charged for an alleged $15 million scheme to commit health care fraud, to defraud the United States, and to pay and receive health care kickbacks.

• Alexander Baldonado, 65, of Queens, New York, was charged with six counts of health care fraud. Baldonado, a medical doctor, allegedly participated in an event that advertised COVID-19 testing.

• Donald Clarkin, 65, of Staten Island, N.Y., was charged in connection with a $5.4 million conspiracy to defraud the United States and pay and receive health care kickbacks.

• Peter Khaim, 41, and Arkadiy Khaimov, 38, both of Forest Hills, N.Y., who owned and controlled several New York pharmacies and sham pharmacy wholesaling companies, were charged in a superseding indictment for their participation in an alleged $45 million health care fraud, wire fraud, and money laundering scheme.

The defendants are alleged to have engaged in various health care fraud schemes designed to exploit the COVID-19 pandemic. For example, multiple defendants offered COVID tests to Medicare beneficiaries at senior living facilities, drive-through COVID testing sites, and medical offices to induce the beneficiaries to provide their personal identifying information and a saliva or blood sample. The defendants are alleged to have then misused the information and samples to submit claims to Medicare for unrelated, medically unnecessary, and far more expensive laboratory tests, including cancer genetic testing, allergy testing, and respiratory pathogen panel tests. In some cases, and as alleged, the COVID test results were not provided to the beneficiaries in a timely fashion or were not reliable, risking the further spread of the disease, and the genetic, allergy, and respiratory pathogen testing was medically unnecessary, and, in many cases, the results were not provided to the patients or their actual primary care doctors. The proceeds of the fraudulent schemes were allegedly laundered through shell corporations and used to purchase exotic automobiles and luxury real estate.

Also, the Center for Program Integrity, Centers for Medicare & Medicaid Services (CPI/CMS) announced Wednesday that it took adverse administrative actions against more than 50 medical providers for their involvement in health care fraud schemes relating to COVID-19 or abuse of CMS programs that were designed to encourage access to medical care during the pandemic.