In a striking case of pandemic-era fraud, Lourdes Navarro, 66, of Glendale, California, has been sentenced to nine years in federal prison for her role in a scheme that bilked Medicare, private insurance companies, and government programs out of millions of dollars during the COVID-19 pandemic. Navarro, who co-owned Matias Clinical Laboratory (operating as Health Care Providers Laboratory, or HCPL), conspired with her business partner Imran Shams to submit fraudulent claims for unnecessary and medically unjustified respiratory pathogen panel (RPP) tests.
“Those who stole from government health programs during the COVID-19 pandemic not only violated federal law, they betrayed the public trust,” said Attorney General Merrick B. Garland. “As this action to disrupt a $359 million scheme, and the Department’s recent announcement involving over 300 defendants and over $830 million in alleged COVID-19 fraud make clear, the Justice Department will continue to find and hold accountable those who defrauded American taxpayers during the pandemic.”
From June 2020 to April 2022, Navarro and Shams obtained nasal swab specimens under the pretense of conducting COVID-19 screenings at various facilities, including nursing homes, rehabilitation centers, and schools. However, rather than performing the ordered COVID-19 tests, they instructed their lab to conduct RPP tests, which were neither necessary nor authorized. These tests, intended to detect multiple respiratory illnesses, were performed on asymptomatic individuals, who only required COVID-19 screening.
The scheme resulted in HCPL submitting approximately $369 million in fraudulent claims. The perpetrators were reimbursed about $46.7 million for these claims from Medicare, the Health Resources and Services Administration‘s COVID-19 Uninsured Program, and private health insurers. Navarro was found guilty of conspiracy to commit health care fraud and wire fraud after admitting to her role in the scam.
“The defendant used her management position at a clinical testing laboratory to exploit the COVID-19 pandemic for personal gain,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “This case demonstrates the Criminal Division’s continued resolve in working with our partners to root out bad actors who steal from government health programs.”
In addition to her prison sentence, Navarro has been ordered to forfeit $11.7 million seized from her bank accounts, and will be responsible for paying $46.7 million in restitution to the defrauded programs. The total amount of seized funds from both Navarro and Shams amounts to $14.5 million.
Imran Shams, who also pleaded guilty to health care fraud, was sentenced to 10 years in prison for his involvement in the scheme. He will serve additional time for unrelated charges tied to money laundering and obstructing IRS functions.
The sentencing of Navarro comes as part of the Justice Department’s ongoing efforts to combat fraud in the health care industry, especially fraud that took advantage of pandemic relief programs meant to assist the nation during an unprecedented health crisis.
Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, Assistant Director Akil Davis of the FBI Los Angeles Field Office, and Acting Special Agent in Charge Rochelle Wong of the Department of Health and Human Services Office of Inspector General were among those who announced the sentence. This case highlights the government’s commitment to holding accountable those who exploit public health crises for personal gain.
