Indictment — United States v. Rashid Naqvi, Eastern District of Missouri (Doc. 2)

Summary

A grand jury indictment against Rashid Naqvi, Case 4:24-cr-00466-SRC-RHH, filed September 4, 2024 as Doc. 2 in the U.S. District Court for the Eastern District of Missouri, Eastern Division. Count One charges conspiracy under 18 U.S.C. § 371 to commit wire fraud and to pay kickbacks; the forfeiture allegation refers to wire fraud in Counts Two through Five, and a further count cites 18 U.S.C. §§ 1516 and 2 over records given to a Medicare auditor. The indictment alleges that Naqvi, owner of Elite Diagnostics and Astro Diagnostics, paid kickbacks totaling $488,435.00 for Medicare patient identifiers and billed Medicare approximately 22,898 times for COVID-19 test kits the patients had not requested. It alleges he sought $4,579,850.00 and Medicare paid $1,974,479.00. The signature block names United States Attorney Sayler A. Fleming.

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“Indictment — United States v. Rashid Naqvi, Eastern District of Missouri (Doc. 2).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-4-24-cr-00466-dkt-2-e-d-mo-3fe3510fb7/, SHA-256 48657b34f108fb17ba67369f32c8f139f5c1560f167a8c08cf363e45ff3cc6f7.

Full text

Case: 4:24-cr-00466-SRC-RHH Doc. #: 2 Filed: 09/04/24 Page: 1 of 12 PageID
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
FILED
EASTERN DIVISION
SEP - 4 2024
U. S. DISTRICT COURT
EASTERN DISTRICT OF MO
UNITED STA TES OF AMERICA, ) ST. LOUIS
)
Plaintiff, )
)
V. )
)
4:24CR466 SRC/RHH
)
RASHID NAQVI, )
)
Defendant. )

INDICTMENT

The Grand Jury charges that:

INTRODUCTION

At all times material to this Indictment, unless otherwise specified below:

I. During his conspiracy and scheme, Defendant Rashid Naqvi defrauded Medicare

out of $1,974,479.00 by fraudulently billing for sending numerous COVID-19 test kits to patients

who had never requested them. Without the Medicare patients' knowledge or consent, Defendant

Naqvi obtained their Medicare Numbers and identifiers by paying illegal kickbacks to his co-

conspirators. Afterpayingthe illegal kickbacks for the patients' Medicare Numbers and identifiers,

Defendant Naqvi used that information to submit thousands of fraudulent claims to Medicare for

COVID-19 test kits, none of which the patients requested.

2. Defendant Naqvi owned and operated two laboratories that he used to submit

fraudulent claims to Medicare: (1) Elite Diagnostics, Incorporated, located in the Eastern District

of Missouri, and (2) Astro Diagnostics, Incorporated, located in the Southern District of Texas.

Relevant Medicare Provisions

3. The United States Department of Health and Human Services, through the Centers
Case: 4:24-cr-00466-SRC-RHH Doc. #: 2 Filed: 09/04/24 Page: 2 of 12 PageID
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for Medicare and Medicaid Services (" CMS"), administers the Medicare Program, which is a

federal health benefits program for the elderly and disabled . Medicare Part B reimburses health

care providers for covered health services that they provide to Medicare patients in outpatient

settings.

4. CMS acts through fiscal agents called Medicare Administrative Contractors or

" MA Cs" which are statutory agents for CMS for Medicare Part B. The MA Cs are private entities

that review claims and make payments to providers for services rendered to Medicare patients.

The MACs are responsible for processing Medicare claims arising within their assigned

geographic areas, including determining whether the claim is for a covered service.

5. Wisconsin Physicians Service Insurance Corporation ("WPS") is the Part B MAC

for Eastern Missouri and thus processed the reimbursement claims that Elite Diagnostics submitted

to Medicare via electronic, interstate wirings. Novitas is the Part B MAC for Southern Texas and

thus processed the reimbursement claims that Astro Diagnostics submitted to Medicare via

electronic, interstate wirings.

6. To receive Medicare reimbursement, providers must make appropriate application

to the MAC and execute a written provider agreement. The provider agreement obligates the

provider to know, understand, and follow all Medicare regulations and rules. After successful

completion of the application process, the MAC assigns the provider a unique provider number,

which is a necessary identifier for billing purposes.

7. Medicare providers-like Elite Diagnostics and Astro Diagnostics--could submit

Medicare claims electronically. Those electronic claims were submitted via interstate wire

communications.

8. For the COVID-19 test kits that were the subject of Defendant Naqvi's fraudulent

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claims, CMS advised providers--including Defendant Naqvi-that they were required to keep

documentation showing a patient's request for the COVID-19 test kit. CMS further advised

providers that the failure to keep documentation showing that the patients requested the COVID-

19 test kit could result in CMS recouping Medicare's reimbursement payments. Defendant Naqvi

knew and understood these requirements during his scheme and conspiracy.

Defendant Naqvi's Enrollment in Medicare

9. On or about December 5, 2018, Defendant Naqvi completed and signed the

Medicare enrollment application for Elite Diagnostics. As part of Elite Diagnostics' Medicare

enrollment, Defendant Naqvi made the following certification:

I have read and understand the Penalties for Falsifying Information, as printed in
the application. I understand that any deliberate omission, misrepresentation, or
falsification of any information ... contained in any communication supplying
information to Medicare ... [may be criminally prosecuted].

I agree to abide by the Medicare laws, regulations and program instructions ...
including the Federal anti-kickback statute ...

1 will not knowingly present or cause to be presented a false or fraudulent claim for
payment by Medicare, and will not submit claims with deliberate ignorance or
reckless disregard of their truth or falsity.

Federal Anti-Kickback Statute

10. Compliance with the Anti-Kickback Statute Act (42 U.S.C. § 1320a-7b(b))

("AKS") is a condition of payment for Medicare. In other words, Medicare will not pay for services

that are provided in violation of the AKS.

I I. The AKS makes it a criminal offense for any person to knowingly and willfully

solicit, offer, pay or receive remuneration in return fororto induce any person to refer, recommend,

furnish, or arrange for the furnishing of any items, goods, and services, paid in whole or in part by

any federally funded health care program. Both parties to such an arrangement may be criminally

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liable if one purpose of the arrangement is to obtain remuneration for the referral of services or to

induce referrals.

12. Remuneration is broadly defined as anything of value, including money, goods,

services, or the release or forgiveness of a financial obligation that the other party would normally

have to pay. In passing the AKS, Congress intended to prohibit financial incentives that could

affect the medical judgment of those providing patients with health care services.

COUNT ONE
(Conspiracy: 18 U.S.C. § 371)

I 3. Each of the above allegations is hereby incorporated by reference as if fully set

forth herein.

I 4. Beginning in or about March 2023, and continuing through at least in or about

September 2024, in the Eastern District of Missouri and elsewhere, the defendant,

RASHID NAQVI,

voluntarily and intentionally combined, conspired, confederated, and agreed with others known

and unknown to the Grand Jury, to commit the following offense against the United States:

(a) Having devised and intended to devise a scheme and artifice to defraud and obtain

money and property by means of materially false and fraudulent pretenses and

representations and for the purpose of executing such scheme, and attempting to do so,

did knowingly cause and attempt to cause to be transmitted by means of wire

communication in interstate commerce, writings, signs, and signals in the form of

interstate electronic communications, in violation of Title I 8, United States Code,

Section 1343; and

(b) to knowingly and willfully solicit, offer, pay, and receive any kickback, bribe, and

rebate for referrals that are reimbursed in whole or part by a federal health care benefit
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program, in violation of Title 42, United States Code, Sections 1320a-7b(b )(2)(8) and

1320a-7b(b )(1 )(B).

All in violation of Title 18, United States Code, Section 3 71.

Purpose of the Conspiracy

15. The primary purpose of the conspiracy was for Defendant Naqvi and his co-

conspirators to unlawfully enrich themselves by defrauding Medicare and paying illegal

kickbacks.

Manner and Means of the Conspiracy

16. The conspiracy was carried out by Defendant Naqvi and his co-conspirators in the

following manner:

17. To submit his fraudulent claims to Medicare, Defendant Naqvi needed the

Medicare Numbers and identifiers of Medicare patients. Thus, Defendant Naqvi paid illegal

kickbacks to his co-conspirators so that they would send him the required Medicare patient

information. In exchange for Defendant Naqvi's kickback payments, his co-conspirators (who

were associated with companies referred to herein as Z.Z., M.A., and D.M.E.) sent Defendant

Naqvi the Medicare Numbers and identifiers for Medicare patients. _Once Defendant Naqvi

received the Medicare patient information that he paid for, he used that information to submit

fraudulent claims to Medicare.

18. During his conspiracy to commit wire fraud and to violate the Anti-Kickback

Statute, Defendant Naqvi made the following kickback payments to his co-conspirators, totaling

$488,435.00.

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4/3/2023 D.M.E. Check Covid Kits (1 ,000) $30,000

4/21/2023 z.z. Bank Wire Covid kits and $70,000
shipping
4/27/2023 M.A. Bank Wire 1,000 $25 ,740

5/2/2023 z.z. Bank Wire Procurement and $62,400
courier services
5/4/2023 z.z. Bank Wire Final PMT l0K $20,000
Procurement and
Courier
5/5/2023 M.A. Bank Wire 1OK Procurement $5 0,000
Round 2
5/8/2023 z.z. Bank Wire Payment for 1Ok $50,000
procurement,
shipping, and
processing
5/16/2023 M.A. Bank Wire MGMT $69,040
Consulting and
BIZDEV
5/23/2023 z.z. Bank Wire PMT l0K PRO C, $61,255
SHIP, PROCESS
5/23/2023 z.z. Bank Wire Payment for 1OK $50,000
procurement,
shipping, and
processing

19. The above-referenced kickback payments from Defendant Naqvi to Company ZZ.

were sent via electronic, interstate wirings from the Southern District of Texas to a Citibank bank

account located in the Eastern District of Missouri. Defendant Naqvi made those interstate wiring;;

in furtherance of his scheme and conspiracy.

20. Also during the conspiracy, Defendant Naqvi and his co-conspirators worked to

disguise their illegal kickback payments to make them appear legitimate and lawful. As detailed

above, Defendant Naqvi often falsely labeled his illegal kickback wirings as payments for the

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procurement and shipment of COVID-19 test kits instead of calling them what they actually were:

payments for the Medicare Numbers and identifiers for Medicare patients.

21. Similarly, Defendant Naqvi entered into a sham contract with his co-conspirators

at Company Z.Z. that disguised their illegal kickback arrangement. Much like Defendant Naqvi's

false wiring labels, his contract with Company Z.Z. did not include a single reference to Defendant

Naqvi's payments for Medicare patient information. Instead,the sham contract between Defendant

Naqvi and Company Z.Z. falsely stated that Defendant Naqvi's payments were made only so that

Company Z.Z. could procure and ship COVID-19 test kits.

22. After receiving the Medicare patient information that he purchased from his co-

conspirators, Defendant Naqvi submitted and caused to be submitted fraudulent claims to

Medicare for purportedly sending COVID-19 test kits to the Medicare patients whose information

he purchased. For many of the patients, Defendant Naqvi submitted claims for multiple COVID-

19 test kits per patient, despite the fact that the patients had never requested a single COVID-19

test kit. In all, Defendant Naqvi-through Elite Diagnostics and Astro Diagnostics-billed

Medicare approximately 22,898 times for sending COVID-19 test kits to Medicare patients whose

information he purchased with illegal kickbacks.

23. Despite billing Medicare for sending COVID-19 test kits to patients, Defendant

Naqvi never actually sent COVID-19 test kits to any Medicare patients. Instead, Defendant Naqvi

had his co-conspirators at Companies Z.Z., M.A., and D.M.E. mail COVID-19 test kits to the

Medicare patients whose information Defendant Naqvi purchased. Under the fraudulent scheme

employed by Defendant Naqvi, neither himself nor either of his companies had any contact or

relationship with the patients who were the subject of his fraudulent claims. In fact, many of the

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reimbursement claims that Defendant Naqvi submitted to Medicare were for Medicare patients

who were deceased.

24 . For all of the COVID-19 test kit reimbursement claims submitted by Defendant

Naqvi to Medicare, Defendant Naqvi lacked the required documentation demonstrating that the

Medicare patients requested those test kits. In fact, the Medicare patients who were the subject of

Defendant Naqvi's fraudulent claims did not request any COVID-19 test kits. In addition,

Defendant Naqvi never received consent from the Medicare patients to use their Medicare

Numbers and identifiers.

25. Defendant Naqvi continued to submit fraudulent claims to Medicare even after

receiving persistent calls from Medicare patients who told him that they did not request-nor did

they want- any COVID-19 test kits . Despite these calls- and despite knowing that he had to have

documented patient requests on file- Defendant Naqvi continued to submit the fraudulent claims

so that he and his co-conspirators could enrich themselves through Medicare reimbursements and

illegal kickbacks. Through his fraudulent claims to Medicare , Defendant Naqvi requested that

Medicare pay him a total of $4 ,579,850.00. As a result of Defendant Naqvi ' s fraudulent claims,

Medicare paid Defendant Naqvi$ I ,974,4 79.00.

Defendant Naqvi Created False Documentation to Conceal his Fraudulent Billing

26. After fraudulently taking nearly $2 million from Medicare, Defendant Naqvi

continued his conspiracy and scheme during subsequent audits by Medicare investigators. During

those audits, Defendant Naqvi made material misrepresentations and concealed material facts to

avoid detection of his crimes. In doing so, Defendant Naqvi produced several false and fraudulent

records to the Medicare investigators.

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27. First, Defendant Naqvi produced records falsely reflecting that the Medicare

patients requested the COVID-19 test kits. But, in truth and fact, as Defendant Naqvi knew full

well, the Medicare patients never requested the COVID-19 test kits, and the records reflecting such

false requests were fraudulent.

28. Second, Defendant Naqvi produced documents that he drafted which falsely

represented that the Medicare patients authorized Medicare to pay Defendant Naqvi for providing

the COVID-19 test kits. In truth and fact, as Defendant Naqvi well knew, the Medicare patients

did not authorize Medicare to pay Defendant Naqvi for providing COVID-19 test kits that they

never requested and knew nothing about.

29. Not only did Defendant Naqvi produce false and fraudulent records to the Medicare

investigators, but he also concealed from the Medicare investigators that his COVID-19 test kit

Medicare claims were the result of illegal kickbacks. For example, when a Medicare investigator

asked Defendant Naqvi to produce any contracts related to the COVID-19 test kits that he billed

for, Defendant Naqvi refused to produce his contract with the company to which he was paying

illegal kickbacks (Company Z.Z.).

Overt Acts

30. In furtherance of the conspiracy and to affect the objects of the conspiracy, the

following overt acts, among others, were committed in the Eastern District of Missouri:

31. On or about the dates listed immediately below, Defendant Naqvi wired or caused

to be wired the following payments to Company Z.Z. 's bank account in the Eastern District of

Missouri.

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Date Kickback Payment Defendant Amount
Recipient Type Naqvi's Listed
I Description_ I
4/21/2023 z.z. Bank Wire Covid kits and $70,000
shipping
5/2/2023 z.z. Bank Wire Procurement and $62,400
courier services
5/4/2023 Z.Z. Bank Wire Final PMT 1OK $20,000
Procurement and
Courier
5/23/2023 z.z. Bank Wire PMT 1OK PRO C, $61,255
SHIP, PROCESS

COUNTS TWO - FIVE
(Wire Fraud: 18 U.S.C. § 1343)

32. Each of the above allegations is hereby incorporated by reference as if fully set

forth herein.

3 3. Beginning by at least in or about March 2023, and continuing through at least in or

about September 2024, in the Eastern District of Missouri, Defendant Naqvi, with the intent to

defraud, devised and intended to devise a scheme and artifice to defraud Medicare and to obtain

money and property from Medicare by means of material false and fraudulent pretenses,

representations, and promises, as described further herein .

34. On or about the dates set forth below, in the Eastern District of Missouri, and

elsewhere, for the purpose of executing the above-described scheme and artifice to defraud

Medicare and obtain money and property by means of false and fraudulent pretenses,

representations and promises and for the purpose of executing the same, Defendant Naqvi did

knowingly transmit and cause to be transmitted by means of wire communication in and affecting

interstate commerce, certain writings, signs, signals, pictures, or sounds, to wit:

I Count Date Wire Description
2 4/21/2023 A payment of $70,000 wired from Defendant Naqvi in the Southern
District of Texas to Company Z.Z. 's bank account in the Eastern District
of Missouri .
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3 5/2/2023 A payment of $62,400 wired from Defendant Naqvi in the Southern
District of Texas to Company Z.Z. 's bank account in the Eastern District
of Missouri .
4 5/4/2023 A payment of $20,000 wired from Defendant Naqvi in the Southern
District of Texas to Company Z.Z. 's bank account in the Eastern District
of Missouri.
5 5/23/2023 A payment of $61,255 wired from Defendant Naqvi in the Southern
District of Texas to Company Z.Z. 's bank account in the Eastern District
of Missouri.

All in violation of Title 18, United States Code , Sections 1343 and 2.

COUNT SIX
(Obstruction of a Federal Audit: 18 U.S.C. §§ 1516 & 2)

35. Each of the above allegations is hereby incorporated by reference as if fully set

forth herein.

36. From on or about July 2, 2023, through on or about August 15, 2023 , in the Eastern

District of Missouri and elsewhere, the defendant, Rashid Naqvi, with the intent to deceive and

defraud the United States, endeavored to influence, obstruct, and impede a federal auditor in the

performance of official duties relating to Elite Diagnostics, an entity receiving in excess of

$100,000, directly and indirectly, from the United States in a one-year period under a contract, by

among other things, furnishing the auditor (CoventBridge) with fraudulent documents and records

designed to support the Medicare billings that were subject to audit in order to conceal that patients

had not requested the COVID-19 test kits for which Defendant Naqvi had submitted fraudulent

billing claims.

In violation of 18 U.S.C. §§ 1516 and 2.

FORFEITURE ALLEGATION

The Grand Jury further alleges there is probable cause that:

I. Pursuant to Title 18, United States Code, Sections 982(a)(2), upon conviction ofan

offense in violation of Title 18, United States Code, Section 1343, as set forth in Counts Two
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through Five , the defendant shall forfeit to the United States of America any property constituting,

or derived from, any proceeds obtained , directly or indirectly , as a result of such violation . Subject

to forfeiture is a sum of money equal to the total value of any property ,real or personal, constituting

or derived from any proceeds traceable to such violation.

2. If any of the property described above , as a result of any act or omission of the

defendant:

a. cannot be located upon the exercise of due diligence;
b. has been transferred or sold to , or deposited with, a third party ;
c. has been placed beyond the jurisdiction of the court;
d. has been substantially diminished in value; or
e. has been commingled with other property which cannot be divided without
difficulty ,

the United States of America will be entitled to the forfeiture of substitute property pursuant to

Title 21 , United States Code, Section 853(p).

A TRUE BILL.

FOREPERSON

SAYLER A. FLEMING
United States Attorney

DEREK J. WISEMAN , #67257MO
Assistant United States Attorney

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