Lab owner indicted in $290M COVID fraud scheme pleads not guilty
An accused co-conspirator in a $290 million COVID-19 lab testing scheme pleaded not guilty in federal court on Tuesday, after being arrested on criminal charges of wire fraud and money laundering in connection with the conspiracy.
According to the U.S. Department of Justice (DOJ), Mahmood Sami Khan, 36, was instrumental in siphoning funds meant to curb the pandemic, submitting claims to the government despite the two labs he owned not conducting tests and, in some cases, not even collecting samples.
His accused co-conspirator, Anosh Ahmed, who worked for Loretta Hospital in Chicago, is the primary defendant in the case. However, Ahmed fled to Dubai to avoid prosecution but has since been charged in absentia
In total, the indictment names four men in the conspiracy: Mohamed Sirajudeen and Suhaib Chaudhry. The DOJ said Ahmed was attempting to help others leave the country, but the three other defendants were ultimately arrested to face charges.
Khan was arrested on June 17 in Texas, prosecutors said. He’s been monitored since, as prosecutors were worried he would flee the country. However, restrictions on his movement were relaxed during his plea arraignment, according to coverage from the Chicago Tribune.
In court, U.S. Magistrate Judge Daniel McLaughlin rebuked claims made by attorneys for the DOJ that Khan was a flight risk, citing how he stayed in the country despite knowing about the investigation against him.
Prosecutors allege Khan and Ahmed remained in contact, even after the latter left the country in December 2024.
Khan maintains his innocence
Khan, who has family in Texas whom he cares for, rejected through his attorneys any claim that he intended to flee the country. He has denied all charges against him, and the case is now set to move to trial later this year.
Per the indictments, the four men are accused of submitting $900 million in bills for COVID-19 tests in 2021 and 2022, for labs located in Illinois and Texas. Payments received totaled $293 million, which the DOJ said were all illegitimate.
Many of the fraudulently billed claims were for patients with no insurance, prosecutors added.
If convicted of the charges, Khan could face decades in prison and $605 million in penalties. He stands accused of five counts of wire fraud and money laundering.
He remains out on bail with travel restrictions. However, he is no longer subject to electronic monitoring of his whereabouts.
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