COVID Test Scam Crumbles as Chicago Lab Owner Gets Seven Years in Prison for $14 Million Fraud

In a major crackdown on pandemic-era fraud, a Chicago laboratory owner has been sentenced to seven years in federal prison for orchestrating a massive $14 million COVID-19 testing scam that compromised public trust and misused emergency healthcare funds during one of the nation’s most critical times.

A Trusted Lab Turned Fraud Mill

Zishan Alvi, 46, from Inverness, Illinois, once ran a seemingly legitimate COVID-19 testing facility in the heart of Chicago. Between 2021 and 2022, his lab processed thousands of tests—at least on paper. In reality, many of those tests were either never conducted, manipulated, or falsely reported, according to court findings.

Alvi’s operation targeted the Health Resources and Services Administration (HRSA), a federal program established to support COVID testing for uninsured Americans. The lab submitted claims for tests that were either completely fabricated or so poorly conducted—with diluted specimens and inconclusive results—that they held no clinical value.

Despite knowing the lab was providing unreliable or fictitious results, Alvi continued to release negative test outcomes to patients while charging the federal government millions of dollars.

Public Health Compromised to Maximize Profits

In an attempt to cut costs and increase profit margins, Alvi diluted testing materials, making many tests scientifically invalid. Still, the lab reported those results as negative and billed the government.

Even more disturbingly, Alvi instructed lab directors and staff to misrepresent or overlook the flaws. When concerns were raised internally, he deliberately misled his own team to keep the scheme running.

This conduct not only defrauded taxpayers but endangered lives by providing patients with inaccurate COVID-19 results during a public health emergency.

Guilty Plea and Financial Fallout

Alvi pleaded guilty to wire fraud on September 30, 2024. At his sentencing, the court ordered him to:

Serve 7 years in federal prison

Pay $14.2 million in restitution to the U.S. government

Forfeit over $6.8 million in cash

Surrender a 2021 Range Rover HSE

Relinquish more than $630,000 held in an E-Trade account

These penalties underscore the severity of his crimes and the government’s commitment to recover stolen COVID relief funds.

A National Effort to Combat Healthcare Fraud

This case is part of a broader initiative to expose and prosecute individuals who exploited the U.S. healthcare system during the pandemic. Since the launch of federal task forces in 2007, thousands of offenders have been charged with schemes involving over $30 billion in fraudulent billing to federal healthcare programs.

The Chicago case stands out for its timing during the height of the pandemic, its direct impact on patient safety, and the sheer magnitude of financial loss.

Justice Delivered with a Message

Authorities emphasized that this sentencing sends a strong message: abuse of emergency healthcare programs will not be tolerated.

While millions of Americans depended on accurate COVID-19 testing to keep their families and communities safe, Alvi chose to capitalize on fear and urgency. His actions represent one of the most egregious breaches of trust seen during the pandemic, but justice has now been served.

The Road Ahead

As the nation continues to rebuild from the health and economic toll of COVID-19, this case serves as a stark reminder of the importance of oversight, accountability, and integrity in public health programs. Federal agencies have promised continued vigilance and encourage whistleblowers and healthcare professionals to report suspicious activity.

The public is urged to remain alert and support honest efforts that ensure health services reach those who need them—especially in times of national crisis.