Indian national pleads guilty in $227 million Medicare fraud case

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Indian national pleads guilty in $227 million Medicare fraud case — Medicare fraud plea in Chicago

Federal prosecutors say a six-month billing scheme targeted Medicare's COVID-19 test kit benefit using stolen beneficiary data and sham claims. The case centers on allegations that laboratories in the Chicago area billed for kits that were neither requested nor delivered, generating about $136 million in Medicare payments.

Highlights

Syed Murtuza Kablazada pleaded guilty to two counts of health care fraud involving $227 million in false Medicare claims for COVID-19 test kits.
Medicare paid about $136 million on fraudulent claims submitted using stolen beneficiary information, with $11 million paid to a telemarketing firm in Pakistan for data acquisition.
Kablazada agreed to forfeit over $46 million seized from 10 bank accounts and faces up to 20 years in prison upon sentencing.

Fraud scheme and guilty plea details

As reported by U.S. Department of Justice, Syed Murtuza Kablazada, 36, an Indian national living in Des Plaines, Illinois, pleaded guilty to two counts of health care fraud tied to false Medicare claims for over-the-counter COVID-19 test kits.

According to court documents and statements made in court, Kablazada and his co-schemers acquired three Chicago-area laboratories, Chicago Care, V Care and Al-Ameer, over six months starting in January 2023. Prosecutors said he then paid about $11 million to a purported telemarketing company based in Pakistan to obtain personally identifiable information for hundreds of thousands of Medicare beneficiaries.

Using that information, the laboratories submitted $227 million in false claims to Medicare for test kits that beneficiaries did not request and never received, according to the Justice Department. Medicare paid about $136 million on those claims, while the conspirators allegedly sought to hide their role through overseas money transfers and unlicensed money transmitters and used some proceeds to buy luxury vehicles.

Forfeiture and sentencing exposure

Under the plea agreement, Kablazada agreed to forfeit more than $46 million in fraud proceeds seized by law enforcement from 10 bank accounts.

He is scheduled to be sentenced at a later date and faces a maximum penalty of 20 years in prison. A federal district court judge will decide the sentence after weighing the U.S. Sentencing Guidelines and other statutory factors.

SEON’s expansion in the Philippines was the focus of our earlier article, outlining how the fraud prevention firm is broadening beyond fintech clients to target traditional banks, remittance providers, and payments businesses. We noted that its partnership with Exist Software Labs is intended to strengthen market access and compliance-driven fraud controls as digital finance adoption accelerates and regulation tightens.

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