Justice Department Announces Nationwide Arrests for COVID-19 Fraud, including Two Locals

Federal authorities on Thursday announced criminal charges against 21 defendants in eight states  for their alleged participation in various “healthcare-related fraud schemes that exploited the COVID-19 pandemic.”

In announcing the charges, which include a man and a woman in Santa Cruz County and three others in California, the Department of Justice said the cases resulted in over $149 million in COVID-19-related false billings to federal programs and theft from federally-funded pandemic assistance programs. In connection with the enforcement action, the department seized over $8 million in cash and other fraud proceeds.

Prosecutors  said this week’s announcement involved “some of the largest and most wide-ranging pandemic frauds detected to date.”

“Today’s announcement … demonstrates our continued resolve to protect the integrity of the government efforts to combat the COVID 19 pandemic,” said U.S. Attorney Stephanie M. Hinds for the Northern District of California. “We will pursue anyone seeking to profit from this health care crisis by committing crimes that endanger the health and well-being of the public at a time when confidence in our public health system is of critical importance.  Every day, the multi-agency partnership formed to combat pandemic-related fraud is holding fraudsters to account for their crimes.”

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division said,  “Today’s enforcement action reinforces our commitment to using all available tools to hold accountable medical professionals, corporate executives, and others who have placed greed above care during an unprecedented public health emergency.”

The announcement also includes charges against manufacturers and distributors of fake COVID-19 vaccination record cards who, according to the allegations, intentionally sought to obstruct the Health and Human Services office and Centers for Disease Control and Prevention in their efforts to administer the nationwide vaccination program and provide accurate proof of vaccination.

For example, in the Northern District of California, three defendants were charged in a scheme to sell homeoprophylaxis immunizations for COVID-19 and falsify COVID-19 vaccination record cards to make it appear that customers received government-authorized vaccines. One defendant allegedly misused her position as the Director of Pharmacy at a northern California hospital to obtain real lot numbers for the Moderna vaccine that were then used to falsify COVID-19 vaccination record cards, according to Thursday’s announcement.

Jaimi Jansen, 40, of Santa Cruz, was charged with making false statements related to health care matters in connection with an alleged scheme to offer fake cures for COVID-19 and distribute fake COVID-19 vaccination record cards.

Jansen was the owner of an integrative health and wellness center in Santa Cruz, California. According to the charges, Jansen functioned as a distributor for Juli Mazi, a naturopathic doctor who offered and sold products known as “homeoprophylaxis immunizations” that she claimed would provide a complete cure for COVID-19, and provided customers with fraudulent CDC COVID-19 vaccination record cards to falsely make it appear that customers received FDA-approved COVID-19 vaccines.

Jansen allegedly purchased and repackaged for distribution Mazi’s homeoprophylaxis immunization pellets and fake CDC COVID-19 vaccination record cards, providing them to approximately 170 recipients.

Jason Nielsen, 53, of Scotts Valley, was charged with securities fraud in connection with an alleged scheme to defraud investors and potential investors in Arrayit, a publicly traded medical technology company.

Nielsen was a large Arrayit shareholder, and deceived Arrayit investors by communicating materially false and misleading information the existence of genuine supply and demand for Arrayit securities and the nature of his personal financial stake in Arrayit securities, all in order to fraudulently induce other investors to purchase Arrayit securities and thereby drive up the stock’s price. At the same time, Nielsen was secretly selling his own previously acquired shares at an artificially inflated price.

Another defendant in the Northern District of California pleaded guilty to the scheme in April 2022. U.S. Attorney Hinds described additional schemes being prosecuted in the Northern District of California in a video.

Prosecutors said the enforcement action announced this week builds on the success of a May 2021 COVID-19 enforcement action and involves the prosecution of various COVID-19 health care fraud schemes.

For example, several cases announced today involve defendants who allegedly offered COVID-19 testing to induce patients to provide their personal identifying information and a saliva or blood sample. The defendants are alleged to have then used the information and samples to submit false and fraudulent claims to Medicare for unrelated, medically unnecessary, and far more expensive tests or services.

In one such scheme in the Central District of California, two owners of a clinical laboratory were charged with a health care fraud, kickback, and money laundering scheme that involved the fraudulent billing of over $214 million for laboratory tests, over $125 million of which allegedly involved fraudulent claims during the pandemic for COVID-19 and respiratory pathogen tests.

“Throughout the pandemic, we have seen trusted medical professionals orchestrate and carry out egregious crimes against their patients all for financial gain,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “These health care fraud abuses erode the integrity and trust patients have with those in the health care industry, particularly during a vulnerable and worrisome time for many individuals. The actions of these criminals are unacceptable, and the FBI, working in coordination with our law enforcement partners, will continue to investigate and pursue those who exploit the integrity of the health care industry for profit.”

In another type of COVID-19 health care fraud scheme announced today, defendants allegedly exploited policies that the Centers for Medicare and Medicaid Services (CMS) put in place to enable increased access to care during the COVID-19 pandemic. For example, in the Southern District of Florida, one medical professional was charged with a health care fraud, wire fraud, and kickback scheme that allegedly involved billing for sham telemedicine encounters that did not occur and agreeing to order unnecessary genetic testing in exchange for access to telehealth patients. Late last year, one defendant was sentenced to 82 months in prison in connection with this scheme.

Today’s announcement includes charges against two additional defendants for schemes targeting the Provider Relief Fund (PRF). The PRF is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in March 2020 that provided financial assistance to medical providers to provide needed medical care to Americans suffering from COVID-19. In total, 10 defendants have been charged with crimes related to misappropriating PRF monies intended for frontline medical providers and three have pleaded guilty.

Further, the Center for Program Integrity, Centers for Medicare & Medicaid Services (CPI/CMS) separately announced today that it has taken an additional 28 administrative actions against providers for their alleged involvement in fraud, waste, and abuse schemes related to the delivery of care for COVID-19, as well as schemes that capitalize upon the public health emergency.

10 Comments

  1. Glad to see these 21 fraudsters on the hot seat — but I don’t think that the DOJ or any other law enforcement group should take a victory lap just yet. They are talking about what amounts to chump-change in these arrests.

    The total fraud (to date) is over $80 BILLION!

    https://www.nbcnews.com/politics/justice-department/biggest-fraud-generation-looting-covid-relief-program-known-ppp-n1279664

    Perhaps they could just start with all the hundreds of millions in unemployment dollars from the State of CA that was sent to prisoners! Wow, what financial controls the State must have — not! They don’t even have enough common sense to not send money to their own prisons? One would hope that they know the addresses of the prisons and block automated payments to persons using those addresses. That would be about two hours of coding for a competent programmer. Also, perhaps sending hundreds of check to the same address might have been a clue.

    Until the Democrat voters of this state wake up and realize that they keep electing virtue-signaling boobs who are bent on looting the state’s treasury, we are doomed. And Democrat voters who actually wake up are as rare as unicorns.

  2. For a change, I cannot argue with anyone here, except that the PPP program was managed by the TRUMP adminsistration, and that BIDEN is prsecuting the fraud. You are trying to misdirect the problem from the source. Many people during this time were warning that this program was being abused but the TRUMP administration was managing it. People warned the TRUMP managers about it, but their answer was just pay out to “try to prevent job losses”, but it backfired. Those with little memory.

  3. There are a Lot Bigger “Locals” that need to be held accountable for the Fraud, Waste and Abuse of taxpayer provided Government Funds –
    Starting with the hypocrite Fraud at the top – Gavin Newsom, and on down through the corrupt DEM leadership & bureaucracy ruining the once great state of CA.

  4. CA Patriot,

    Nice attempt to distract. Remember again, the TRUMP administration AUTHORIZED these crooks to steal from the U.S. not Gavin Newsom. We need to stay focused on the problem. THe TRUMP people ineffect gave away all the money, and the BIDEN administration is trying to CLEAN UP THE MESS!!!

  5. Steven, you are being dishonest. The Trump administration had nothing to do with the CA EDD fraud.

    Moreover, the ppp program ended after Biden had been in office.

  6. HB,

    Nice try in trying to change the subject. The topic is on FEDERAL FRAUD cases. If you want to discuss that topic, lets see the news about HOW that occured first. Otherwise taking another road just to try to find some way to claim that a Democrat caused fraud is just another distraction. This was a case of fraud regarding the Provider Relief Fund (PRF) program.Again another program under the TRUMP administration and managed by it. In fact this fraud makes the CA EDD situation very minor.

  7. Steven: No attempt to change the subject except to note that your venom is reserved for Republicans. My view is that Republicans and Democrats both waste massive amounts of money, open the government up to fraudster, are creating massive inflation, taking rights from people (except their favored groups) and paying off their political cronies every chance they get. There isn’t a dimes worth the difference between the Republican administrations and the Democrat administrations. The only difference is how the press and people like you (ideologues) treat them. Both parties are no longer in the business of doing what is best for the country. They see their job function is to buy votes, payofff big money supporters, and get re-elected.

  8. @HB, Don’t you mean Idiot-logues? Attempting to have an intelligent discussion with someone who has ingested a little too much ‘waste-water’ is really just a waste of time.
    Like the 99.7% Covid recovery rate you have to wade through 99.7% of ‘waste-water’ comment content.
    At least the repetitive posting of half-baked, meaningless and un-actionable covid matter rants has slowed or stopped – as the claims were become more and more outlandish and amusing.

  9. The states are the entities that have primary responsibility for distributing and managing Welfare, Food Stamps and specifically Covid Relief Funds provided by the Federal Govt.
    That is how the system is set up and has “worked” for decades ( worked in quotes since some states, specifically CA, have had terrible accountability & management by State bureaucracies in charge of these taxpayer funds).

    Arguing against common public knowledge is just one of the sad outcomes of ‘waste-water’ ingestion.

  10. CA State Auditor released her annual State High-Risk Audit Program report, which maintains a list of potential liabilities in respect to certain departments in CA’s state government.

    She listed the Department of Finance (Finance), the Employment Development Department (EDD) and the California Department of Public Health (Public Health) as sources of mismanagement.

    State Auditor reported mishandling of Federal COVID-19 relief funds – and a year later, she said “it’s still an issue and some aspects have become more severe.”

    “Mismanagement of federal COVID‑19 funds by various state agencies has created a substantial risk to the State and its residents”

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