Lab owner pleads guilty in $300 million coronavirus testing scheme tied to ex-Loretto Hospital executive

A lab owner pleaded guilty Wednesday to bilking the federal government out of hundreds of millions of dollars as part of a coronavirus testing scheme tied to former Loretto Hospital financial officer Anosh Ahmed.

Mohamed Sirajudeen, 53, from Chicago, is the first person convicted in the two pending criminal cases involving Ahmed. Charges were previously dropped against two of their co-defendants in the testing scheme amid allegations of prosecutorial misconduct that surfaced when the “Broadview Six” case collapsed.

Sirajudeen and the other defendants in that case were accused of attempting to defraud the U.S. Department of Health and Human Services out of nearly $900 million through fraudulent COVID-19 testing claims. Prosecutors said roughly $300 million was paid out, and more than $200 million went to Sirajudeen’s business, O’Hare Clinical Lab Services.

The feds’ probe of Ahmed and Loretto Hospital dates back to 2021, when Block Club Chicago reported the hospital had shared COVID-19 vaccines with employees at Trump Tower, where Ahmed had a condo. The vaccines were just becoming available and were still rare.

Ahmed lawyer Matthew Carter revealed in court last week that Ahmed would no longer fight extradition from Serbia, where he’s been held in custody since November. The announcement came after U.S. District Judge Sharon Johnson Coleman shot down a request to toss his charges in the testing scheme over claims of prosecutorial misconduct.

Sheri Mecklenburg, the prosecutor accused of mishandling the “Broadview Six” grand jury, has faced similar misconduct allegations in Ahmed’s case. The feds already avoided a hearing about the allegations in June by permanently dropping charges against Ahmed’s two co-defendants.

But Ahmed will likely seek similar treatment once he’s arraigned by U.S. District Judge Sharon Johnson Coleman. And she’s clearly interested in holding an evidentiary hearing about the allegations that have rocked the Dirksen Federal Courthouse this summer.

Late Tuesday, Chicago U.S. Attorney Andrew Boutros sought to get a handle on the Broadview case, which has been engulfed his office in a credibility crisis unlike any faced by his recent predecessors.

In a court filing, Boutros argued that there’s no need for sanctions or a special counsel in the case, which targeted a group of Operation Midway Blitz protesters who are mostly involved in local Democratic politics. The case fell apart in May after U.S. District Judge April Perry became aware of Mecklenburg’s apparent misconduct before the grand jury that heard both the Broadview and Loretto testing cases.

U.S. District Judge Robert Gettleman handles Ahmed’s other criminal case, involving a $15 million embezzlement scheme at Loretto. Gettleman hasn’t been asked to settle questions tied to Mecklenburg’s alleged misconduct.

Sirajudeen pleaded guilty to money laundering during Wednesday’s hearing in Johnson Coleman’s courtroom. His sentencing has been delayed because he’s cooperating with prosecutors.

Ahmed hired Sirajudeen in June 2022 to submit bogus biological samples for COVID-19 testing and perform tests on Loretto’s behalf, even though Ahmed was no longer affiliated with the hospital, prosecutors said. The arrangement was intended to make the samples appear legitimate so Sirajudeen’s lab could submit reimbursement claims to the government.

Prosecutors said Ahmed used the identities of about a million purported patients for testing at Sirajudeen’s lab, falsely claiming they were uninsured and had submitted biological samples for coronavirus testing, even though they hadn’t.

Under the agreement, Sirajudeen paid Ahmed a fee for each specimen sent to his lab for processing, prosecutors said. Sirajudeen submitted $642.1 million in claims to the government and received about $201.7 million in reimbursements. Sirajudeen then paid Ahmed more than $147 million.