Laboratory Owner Charged for $79M Fraud Scheme

US Department of Justice, November 20, 2024

The owner and operator of a Texas laboratory was charged yesterday in connection with his role in a $79 million respiratory pathogen panel (RPP) testing fraud scheme.

According to court documents, Osman Syed, 34, also known as Syed Osman, an Indian national, caused BioDX Labs LLC (BioDX) to submit more than $79 million in fraudulent claims to Medicare and Texas Medicaid for RPP tests that were not provided and were medically unnecessary. Osman used the personal identifying information of a physician, without the physician’s knowledge or consent, to cause the submission of millions of dollars in claims to Medicare and Medicaid for RPP tests for beneficiaries and recipients, even though the physician had no prior relationship with the beneficiaries and recipients, was not treating the beneficiaries and recipients for respiratory symptoms, and did not use the tests to treat the beneficiaries and recipients. To conceal that BioDX did not perform the tests as billed, Osman falsely represented that BioDX used reference laboratories to perform its testing. Osman and his co-conspirators laundered the proceeds of the fraudulent scheme by transferring substantial sums to bank accounts abroad, including accounts in China, Hong Kong, Turkey, Greece, and Switzerland. In connection with the charges, the government seized over $15 million in cash.

Osman is charged with three counts of health care fraud, conspiracy to engage in money laundering, and three counts of money laundering. If convicted, he faces a maximum penalty of 10 years in prison on each count.

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