More than $300 million in unnecessary COVID-19 testing could land Glendale lab owner in prison for 20 years

U.S. Attorney General Merrick Garland and Deputy U.S. Attorney General Lisa Monaco

Oct. 6, 2023 7:52 PM PT

A Glendale laboratory owner acknowledged in federal court that she fraudulently billed hundreds of million of dollars in COVID-19 testing during a nearly two-year run.

Lourdes Navarro, 64, could potentially spend up to 20 years in prison, according to the Department of Justice, after pleading guilty Thursday to healthcare and wire fraud. A federal judge will determine her fate at a sentencing hearing on Jan. 23.

“Those who stole from government health programs during the COVID-19 pandemic not only violated federal law, they betrayed the public trust,” Atty. Gen. Merrick Garland said in a statement.

Navarro and her husband, Imran Shams, billed the government and private health companies $359 million for what were deemed unnecessary respiratory pathogen panel, or RPP, tests from June 2020 to April 2022, according to the Department of Justice.

At the time, Navarro and Shams were co-owners of Baldwin Park-based Matias Clinical Laboratory, according to court documents.

Navarro and Shams collected nasal swab specimens from potential COVID-19 patients, including samples from residents and staffs at nursing homes, assisted living facilities, rehab centers and similar medical facilities, court documents allege. The duo also collected samples from Los Angeles-area students and staff while other physicians and medical professionals also sent over samples.

The couple were supposed to test for COVID-19 but, according to the Department of Justice, they also conducted non-requested advanced screening RPP exams.

Eventually they were reimbursed $54 million of the original $359 million initially billed to Medicare, the Health Resources and Services Administration and at least one private insurance company.

“The defendant used her management position at a clinical testing laboratory to exploit the COVID-19 pandemic for personal gain,” Acting Assistant Atty. Gen. Nicole M. Argentieri, of the Justice Department’s Criminal Division, said in a statement. “This case demonstrates the Criminal Division’s continued resolve in working with our partners to root out bad actors who steal from government health programs.”

The total number of RPP tests conducted by Navarro and Shams is unknown. Calls to the U.S. attorney’s office for the Central District of California were not immediately returned.

Attorney Patric Hooper, who represented Navarro, said in a statement that his client “accepts responsibility for her conduct.”

Hooper classified Navarro’s actions as “misguided” and ultimately were “intended to help the community and vulnerable populations to screen for the deadly COVID-19 virus.”

“The decision to bill for the testing arose during the tumultuous and ever changing landscape of regulatory guidance during the COVID-19 pandemic,” he said. “The government has conceded that all testing was actually performed.”

Hooper said Navarro’s plea agreement was “conditional” and she preserved her right to challenge certain regulatory aspects regarding the legality of the respiratory panel testing.

Shams was already awaiting sentencing on Jan. 9 after having previously pleaded guilty to conspiracy to commit healthcare fraud.