New York doctor accused of stealing millions through fraudulent COVID-19 insurance claims arrested by federal authorities

New York – A New York City doctor who founded a popular COVID-19 testing company has been arrested and charged in connection with a massive insurance fraud scheme that federal officials say took advantage of the pandemic to illegally bill for millions of dollars in fake services.

Dr. Ali Rashan, 41, the founder and CEO of ClearMD, was taken into custody on June 25, 2025, after a five-count federal indictment was unsealed in Manhattan federal court. Prosecutors allege that Rashan orchestrated a far-reaching fraud operation that exploited health insurance companies by submitting thousands of fake claims and forged medical records for COVID-19 testing services that were never actually performed.

According to Acting U.S. Attorney Sean Buckley, Rashan deliberately capitalized on the pandemic while many New Yorkers were struggling to stay safe and healthy. “While New Yorkers were doing their best to get through a public health crisis, Ali Rashan was allegedly cashing in on it,” said Buckley. “Our Office will not tolerate those who exploit the city’s pandemic response for personal profit.”

Read also: Supervisor Bill Reilich welcomes families and residents to gather for the return of the Town of Greece Old Fashioned 4th of July Celebration

FBI Assistant Director in Charge Christopher G. Raia echoed that sentiment, calling Rashan’s actions a deep betrayal of public trust. “Ali Rashan allegedly facilitated an elaborate scheme using fabricated medical records to steal more than $24 million,” Raia said. “This defendant allegedly violated his dual authorities as a medical doctor and CEO to receive reimbursement from thousands of illegitimate claims.”

Court documents reveal that from at least 2021 through 2023, Rashan oversaw ClearMD’s day-to-day operations as the company provided COVID-19 testing services across New York City. But federal investigators allege that Rashan directed the company to submit claims for services that were never actually provided.

For instance, ClearMD allegedly billed insurance companies for high-level evaluation and management services — often used in complex medical consultations — when patients had only come in for a simple COVID test. Investigators say those services were never actually performed, but ClearMD still collected insurance payments for them.

In other instances, prosecutors say Rashan instructed the company to bill for multiple types of COVID-19 tests for a single patient visit, even though only one test had actually been administered. The fraudulent billing practices, which spanned thousands of claims, led to insurers paying out roughly $24 million.

When insurers requested documentation to verify the charges, Rashan allegedly took the scheme a step further. He reportedly ordered ClearMD staff to write a custom software program that automatically generated fake medical records designed to match the false claims. These fabricated documents were then submitted to insurers as “proof” that the services had been provided, investigators say.

This kind of deliberate deception is what elevated the case to a major federal investigation involving multiple agencies, including the FBI, the Office of Personnel Management’s Office of Inspector General, and the U.S. Department of Labor’s Employee Benefits Security Administration. Officials say the scheme not only defrauded insurance companies, but ultimately affected programs meant to protect the health and financial security of Americans — especially during a national crisis.

Rashan now faces five separate charges, each carrying potentially serious prison sentences:

• One count of conspiracy to commit health care fraud, which carries a maximum sentence of 20 years in prison
• One count of health care fraud, which carries a maximum sentence of 10 years in prison
• One count of wire fraud, which carries a maximum sentence of 20 years in prison
• One count of conspiracy to make false statements, carrying up to 5 years
• One count of making false statements relating to health care matters, also carrying up to 5 years

If convicted on all charges, Rashan could face up to 60 years in prison, though actual sentencing will be determined by a judge based on federal guidelines. He was presented before U.S. Magistrate Judge Barbara Moses on June 25, and his case has been assigned to Judge Paul A. Engelmayer.

Rashan is presumed innocent until proven guilty in a court of law. The case is being handled by the U.S. Attorney’s Office for the Southern District of New York’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Rushmi Bhaskaran, Timothy Capozzi, and Jaclyn Delligatti are leading the prosecution.

Federal officials say Rashan’s case is just one piece of a much broader crackdown on pandemic-related health care fraud. The charges against him were part of a coordinated nationwide effort that brought criminal cases against 324 individuals for various schemes involving more than $14.6 billion in false billings. Authorities also seized over $245 million in cash, luxury goods, and other assets in connection with those investigations.

Read also: New York State Police arrest Norwich man in connection with deadly April crash that killed Oxford resident

Many of the defendants charged in that broader action are accused of defrauding health care programs meant for the elderly and disabled, with the goal of enriching themselves at the expense of vulnerable populations and the integrity of the U.S. health system.

“Doctors are supposed to heal, not steal,” one official said during the national press briefing. “Cases like this remind us why aggressive oversight is necessary to ensure that vital resources go to those who truly need them.”

Rashan’s company, ClearMD, had gained attention during the height of the pandemic for offering convenient and accessible COVID-19 testing at a time when demand was high and access was limited. The company’s sleek branding and rapid testing services made it popular among city residents and even some large employers. But according to the indictment, behind that professional image was a carefully constructed fraud operation that abused the very systems it claimed to support.

As the investigation continues, authorities are encouraging other health care professionals to come forward if they have knowledge of similar schemes. Officials say accountability is essential not just for punishing fraud, but also for restoring public trust in the health care system — particularly after the immense strain of a global pandemic.

The Department of Justice has made clear that its efforts to root out pandemic-related fraud will not stop here. “If you abused the pandemic response to enrich yourself, we are coming for you,” one federal official said.

Descriptions of the dozens of cases involved in this national enforcement effort are available on the Department of Justice’s website. The public can also report health care fraud tips to the FBI or Department of Health and Human Services.

For now, Dr. Ali Rashan awaits the next stage of his legal journey, facing serious charges that may carry life-altering consequences.