An Indian national living in Illinois has pleaded guilty to a $227 million Medicare fraud scheme in which the personal information of hundreds of thousands of Medicare beneficiaries was bought from a company based in Pakistan and used to bill the government for COVID-19 test kits that were never requested and never delivered. The $227 million Medicare fraud guilty plea, announced by the US Department of Justice on Friday, October 30, 2026, is one of the largest pandemic-era health care fraud cases to reach a conviction.
According to court documents and statements made in court, Kablazada and his co-schemers acquired three Chicago-area laboratories — Chicago Care, V Care and Al-Ameer — over the course of six months starting in January 2023. Kablazada then paid approximately $11 million to a purported telemarketing company based in Pakistan to obtain personally identifiable information for hundreds of thousands of Medicare beneficiaries.
Using that information, Kablazada caused the laboratories to submit $227 million in false and fraudulent claims to Medicare for over-the-counter COVID-19 test kits that he knew were never requested by or shipped to the beneficiaries. Medicare paid approximately $136 million on those claims.
As part of his plea agreement, Kablazada agreed to forfeit over $46 million in fraud proceeds that law enforcement seized from ten bank accounts. He pleaded guilty to two counts of health care fraud, is scheduled to be sentenced at a later date, and faces a maximum penalty of 20 years in prison.
The announcement was made by Assistant Attorney General Colin M. McDonald of the Justice Department's National Fraud Enforcement Division, Special Agent in Charge Ryan Whalen of the FBI Chicago Field Office, and Special Agent in Charge Thomas Ethridge of the Department of Health and Human Services Office of Inspector General. The guilty plea follows criminal charges announced in May 2025.
The case sits inside a much larger pandemic fraud problem. During the COVID-19 public health emergency, Medicare covered over-the-counter test kits for beneficiaries, creating a benefit that fraudsters could exploit at scale if they could obtain beneficiary identifiers and a laboratory billing number.
Prosecutors say Kablazada's operation followed a classic template. First, acquire legitimate-looking laboratories that can bill Medicare. Second, buy beneficiary data in bulk — here, prosecutors say, from a purported telemarketing company based in Pakistan, for about $11 million. Third, submit claims in volume for products the beneficiaries never ordered. Because the claims were for low-cost, over-the-counter items, each individual claim drew little attention, but across hundreds of thousands of beneficiaries the total reached $227 million.
Investigators say Kablazada and his associates used overseas money transfers and unlicensed money transmitters to conceal their involvement and distribute the proceeds, and used some proceeds to buy luxury vehicles. The $46 million forfeiture covers money already seized from ten bank accounts connected to the investigation — a fraction of the $136 million Medicare paid out, leaving further recovery to be pursued.
The case was investigated by the FBI's Chicago Field Office and the Department of Health and Human Services Office of Inspector General, and is being prosecuted by the Justice Department's Fraud Division Health Care Fraud Section, with assistance from the US Attorney's Office for the Northern District of Illinois.
The plea matters for three reasons. First, it converts a headline-sized fraud figure into an admitted crime: Kablazada has now admitted in court that the claims were false, removing the uncertainty that hangs over an indictment. Second, it exposes how beneficiary data moves across borders — personal information bought from an overseas telemarketing operation became the raw material for $227 million in claims against an American public programme. Third, it is a reminder that pandemic-era fraud is still working its way through the courts years after the emergency ended, with the original charges in this case dating to May 2025 and the scheme itself to early 2023.
The case also lands in a week when federal fraud enforcement in general has been in the spotlight, with prosecutors in Minnesota announcing new health care fraud charges and officials touting a widening crackdown on fraud against taxpayer-funded programmes. Health care fraud remains one of the most expensive forms of white-collar crime in the United States, and Medicare — which covers tens of millions of older and disabled Americans — is its most frequent target.
The Justice Department's announcement was deliberately spare, sticking to the facts established in court documents and in the defendant's own statements. Officials did not announce a sentencing date, and they did not say whether additional defendants face charges in the same scheme, beyond the reference to Kablazada's co-schemers in the court record.
The agencies behind the case — the FBI's Chicago Field Office and the Health and Human Services inspector general's office — presented the plea as the product of a joint investigation, a pattern that has become standard in large health care fraud cases, where the FBI traces the money and the inspector general's office traces the claims.
For beneficiaries, the case carries a practical warning that prosecutors have repeated in similar cases: Medicare beneficiaries should check their Medicare statements for test kits, services or equipment they did not request, because their personal information may have been used without their knowledge.
Beyond the dollar figures, the Kablazada case illustrates the vulnerability at the centre of American health care billing: a system that pays claims first and investigates later is an invitation to fraud at industrial scale. When a single operation can extract $136 million in payments before it is stopped, the losses are ultimately borne by taxpayers and by a Medicare trust fund already under long-term strain.
It also shows the international dimension of modern fraud. The beneficiary data at the heart of the scheme was allegedly bought from a company based in Pakistan, and the proceeds were moved through overseas transfers and unlicensed transmitters. Prosecuting such cases requires cooperation across agencies and borders, and recovery of the money is often only partial — here, $46 million seized against $136 million paid.
Finally, the case is a test of deterrence. A maximum sentence of 20 years, combined with a multi-million-dollar forfeiture, is meant to signal that pandemic-era fraud will be pursued to conviction even years later. Whether the eventual sentence matches that signal will be watched by prosecutors building similar cases.
Kablazada will be sentenced at a later date, which prosecutors have not yet announced. The court will weigh the scale of the fraud, the $136 million paid by Medicare, the $46 million forfeiture already agreed, and any further restitution the government seeks. Further proceedings may also determine how much of the remaining losses can be recovered from other participants in the scheme.
Separately, the laboratories at the centre of the case — Chicago Care, V Care and Al-Ameer — and the overseas telemarketing operation that allegedly supplied the beneficiary data remain part of the wider enforcement picture, as investigators continue to trace where the money went and who else profited.
Who is Syed Murtuza Kablazada? Kablazada, 36, is an Indian national residing in Des Plaines, Illinois, who pleaded guilty on October 30, 2026, to two counts of health care fraud in connection with a $227 million Medicare scheme.
What did the scheme involve? Prosecutors say he and his co-schemers acquired three Chicago-area laboratories and used beneficiary information bought for about $11 million from a purported telemarketing company based in Pakistan to submit false claims for COVID-19 test kits that were never requested or delivered.
How much did Medicare pay? Medicare paid approximately $136 million on the $227 million in false claims submitted by the laboratories.
What happens to the money? Kablazada agreed to forfeit more than $46 million in fraud proceeds seized from ten bank accounts. He faces a maximum penalty of 20 years in prison when he is sentenced at a later date.
How can beneficiaries protect themselves? Officials advise Medicare beneficiaries to review their Medicare statements for test kits or services they did not request, and to report anything suspicious, since their personal information may have been used without their knowledge.
Read more on US News Pulse: Minnesota fraud charges: 4 charged in $41 million healthcare scheme, Salim Said: 30-year sentence in $250 million Minnesota food fraud case, and Minnesota autism raids: FBI searches Twin Cities centres in Medicaid fraud probe.
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