Medicare Diagnostic Lab Fraud Nets Two-Year Sentence and $1.17M Restitution

Mohammed Asif, an Indian national, was sentenced to two years in federal prison for orchestrating a multimillion-dollar Medicare fraud through American Labworks LLC, a diagnostic lab based in Everett, Washington. Asif pleaded guilty to conspiracy to commit healthcare fraud related to billing Medicare for COVID-19 and other respiratory tests that were neither ordered nor performed, resulting in a loss of over $1.17 million to the Medicare system. The lab billed Medicare over $8.7 million from April to December 2024 and received more than $1.1 million in payouts before it ceased operations in 2025. The fraudulent activities were uncovered following numerous complaints from Medicare beneficiaries, who reported charges for tests they did not receive and bills linked to physicians who had neither referred patients to the lab nor were sometimes deceased at the time of supposed referrals. Records indicated the lab's Medical Test Site license expired in December 2023, but the fraudulent billing continued through early 2025. Asif controlled the company's finances, making substantial withdrawals and attempting to evade investigation by temporarily leaving the U.S. Federal authorities emphasized the significant impact of such fraudulent schemes on the integrity and financial sustainability of the Medicare program. Asif’s sentencing and mandated restitution of over $1.17 million reflect the government's ongoing efforts to prosecute healthcare fraud and protect federal healthcare funds intended for vulnerable populations. The case also highlights regulatory oversight challenges within the healthcare diagnostic testing sector. Asif’s sentencing underlines the seriousness with which U.S. authorities address Medicare fraud, especially during the COVID-19 pandemic, which has been exploited by fraudsters. Following his prison term, Asif faces likely deportation. The involvement of multiple agencies such as the U.S. Attorney's office, HHS-OIG, and FBI demonstrates coordinated enforcement efforts. This case reinforces the need for vigilant monitoring of healthcare claims and stronger compliance measures among diagnostic laboratories to safeguard public health funds.