A Glendale, California laboratory owner who pleaded guilty in a scheme that billed federal health programs for hundreds of millions of dollars in unnecessary respiratory tests during the COVID-19 pandemic was sentenced to nine years in prison, according to the U.S. Department of Justice. This page summarizes the case as the Justice Department described it in two public announcements, and what it shows about how testing fraud works.
What the Justice Department reported
Lourdes Navarro pleaded guilty on October 5, 2023 to conspiracy to commit health care fraud and wire fraud. When announcing the plea, the Justice Department said the claims at issue totaled about $359 million. In its January 28, 2025 sentencing announcement, the department described approximately $369 million billed and approximately $46.7 million paid for fraudulent claims. The two announcements give different totals, and both are linked below.
According to the sentencing announcement, Navarro was ordered to pay $46,735,400 in restitution and to forfeit $11,662,939 from three previously seized bank accounts. She and co-defendant Imran Shams owned and controlled Matias Clinical Laboratory, which did business as Health Care Providers Laboratory.
How the scheme worked
The Justice Department said the laboratory obtained nasal swab specimens collected for COVID-19 screening from residents and staff of nursing homes, assisted living and rehabilitation facilities, and from students and staff at schools. On most of those specimens, the lab also ran respiratory pathogen panel tests, which screen for many viruses at once and are far more expensive, even though only COVID-19 tests had been ordered.
The department described those extra tests as medically unnecessary and never ordered by health care providers. The claims were billed to Medicare, the Health Resources and Services Administration's COVID-19 Uninsured Program, and a private insurer.
The co-defendant
Imran Shams pleaded guilty in January 2023 to conspiracy to commit health care fraud and to concealing his exclusion from Medicare, and was sentenced to 10 years in prison in January 2024, according to the Justice Department. He also received a separate sentence in a federal case in New York.
Who investigated
The FBI and the U.S. Department of Health and Human Services Office of Inspector General investigated the case. It was prosecuted by the Criminal Division's Fraud Section, with the U.S. Attorney's Office for the Central District of California handling financial penalties.
What this case shows
Testing fraud often hides inside legitimate care. A real test is ordered, and extra services nobody asked for are added to the bill. Patients and facilities rarely see the claims, which is why reviewing your Medicare Summary Notice matters: look for tests, equipment, or visits you do not recognize.
- Compare every service on your Medicare Summary Notice with the care you actually received.
- Be wary of free testing offers that ask for your Medicare number.
- Report anything suspicious to the HHS-OIG hotline at 1-800-HHS-TIPS (1-800-447-8477) or to 1-800-MEDICARE.
Sources
- U.S. Department of Justice, Office of Public Affairs, "Woman Sentenced for Fraud Scheme Involving Claims for Unnecessary Respiratory Tests Submitted During COVID-19 Pandemic" (January 28, 2025).
- U.S. Department of Justice, Office of Public Affairs, plea announcement (October 2023).
