LabQ CEO Accused of $130M COVID Testing Scam

NEW YORK, NY – A brazen scheme to siphon federal funds meant for COVID-19 testing of the uninsured has landed the CEO of LabQ Clinical Diagnostics, Moshe Landau, and his companies in the crosshairs of federal prosecutors. The U.S. Attorney for the Southern District of New York, Damian Williams, along with HHS-OIG and the FBI, announced today a civil fraud lawsuit against LABQ CLINICAL DIAGNOSTICS, LLC (“LABQ”); COMMUNITY MOBILE TESTING, INC. (“CMT”); DART MEDICAL LABORATORY, INC. (“DART MEDICAL”), and Landau himself. They stand accused of fraudulently billing the Uninsured Program, a vital lifeline for those without healthcare coverage during the pandemic.

The feds allege that Landau and his crew knowingly submitted claims for tests that were *already* being paid for by other insurance providers, or for individuals who were, in fact, insured at the time of service. This wasn’t a paperwork error; it was a calculated effort to bleed the Uninsured Program dry. According to the complaint filed in Manhattan federal court, LabQ and Dart Medical raked in approximately $130 million from the program. The Uninsured Program required providers to attest they had confirmed patients were uninsured and that no other payer would cover the testing costs *before* receiving reimbursement. The government alleges the defendants ignored this requirement.

“As alleged, LabQ, CMT, Dart Medical, and their CEO, Moshe Landau, fraudulently took tens of millions of dollars from the Uninsured Program for the testing of individuals with health care coverage, and thereby depleted the funds that Congress authorized for the testing of uninsured individuals who truly needed the federal assistance,” thundered U.S. Attorney Williams. “This Office will hold accountable those who divert federal funds designed to provide critical medical care to the uninsured population of this city and nation in order to line their own pockets.”

The operation wasn’t confined to labs. LabQ aggressively pursued contracts for COVID-19 testing with school districts and nursing homes, and set up a network of mobile testing vans and tents plastered with the LabQ brand across New York City streets. While offering a public service, the lawsuit paints a picture of a company motivated by profit, willing to exploit a federal program designed to protect the most vulnerable. Elysia Doherty, Assistant Special Agent in Charge of HHS-OIG, stated, “It is alleged in this case that the defendants knowingly sought reimbursements from federal funds available during the COVID-19 pandemic to which they were not entitled. We will continue to work with our law enforcement partners to seek resolutions and effect change to preserve the integrity of the federal health care system.”

FBI Assistant Director in Charge James Smith didn’t pull any punches either: “Moshe Landau, the CEO of various COVID-19 testing companies, allegedly defrauded a federal healthcare program by submitting illegitimate claims to receive unlawful reimbursements. Collecting tens of millions of dollars in reimbursements, Landau and his companies allegedly took advantage of a government initiative that provided support and assistance to healthcare providers during a global pandemic.” The FBI, Smith affirmed, is “committed to ensuring that people like Landau are rightfully held accountable for their knowing attempts to deceive the government for personal gain, and for exploiting programs designed to serve vulnerable citizens.”

The lawsuit seeks damages, civil penalties under the False Claims Act, and full recovery of the government funds. The investigation is ongoing, and further charges aren’t off the table. This case serves as a stark reminder that even during a public health crisis, those who prey on the system will face the full force of the law. The complaint was filed June 13, 2024, in Manhattan federal court.

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