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Billing fraud — a bird’s-eye view

Billing fraud may not capture all the big headlines, but it’s pervasive, hard to detect and has been growing since the outbreak of the COVID-19 pandemic. Here are some recent case studies and a bird’s-eye view of how and why this type of fraud thrives.

In April, a grand jury indicted Marzieh Abedin for allegedly embezzling close to $1.5 million in COVID-relief funds from her former employee, the Oregon Health Authority (OHA). Abedin had been responsible for coordinating payment approvals for vendors offering COVID vaccination services. But Deloitte Consulting, which OHA had hired to help in the payments process, soon discovered that something was amiss.

The consulting firm noticed that catering services at a large vaccination event never took place on the dates and locations stated in the invoice, according to an article in The Oregonian. Before long, OHA realized that this was part of a bigger, more complex scam that Abedin had devised, involving stolen identities she used to open bank accounts and create a string of fake documents.

After launching an investigation in November last year, law enforcement uncovered a sham company called Leone Catering that Abedin had used to issue false invoices and garner payments that went to a fraudulent bank account. Over the course of last year, Abedin submitted 35 invoices for nonexistent events and ultimately deposited $1,492,846 into Leone Catering’s bank account, money that she then transferred to another account under the name of someone whose identity she stole, according to The Oregonian article.

Fortunately, the Oregon Department of Justice Criminal Division recovered a good chunk of the stolen funds — $1,485,899 — but by the time it had requested a warrant for Abedin’s arrest, she’d disappeared amid speculation that she’d left the country. (See “ Former OHA Employee Indicted on 21 Criminal Counts for Embezzlement Scheme of COVID-19 Funds,” Oregon Department of Justice, April 20, 2022, and “She was supposed to help vaccinate Oregon; instead state worker embezzled $1.5 million in COVID funds, agents say,” by Ted Sickinger, The Oregonian/OregonLive, updated April 21, 2022.)

Abedin’s case is just one of many examples of billing fraud that has exploded in the wake of the COVID-19 pandemic, especially in the health care space. In April, the U.S. Department of Justice (DOJ) charged 21 people, including physicians and owners of medical businesses across the U.S., for their involvement in false-billing schemes connected to federally funded pandemic assistance programs that resulted in more than $149 million of losses. This came about a year after the DOJ charged 14 defendants for alleged false billing that took taxpayers for another $143 million.

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