A New York physician at the center of a massive COVID testing operation has admitted to turning the pandemic into a multimillion-dollar billing scam, pleading guilty on Friday to federal charges related to at least $24 million in bogus claims. Ali Rashan, the founder and CEO of ClearMD, pleaded a plea before U.S. District Judge Paul A. Engelmayer and is expected to be sentenced on September 22.
According to a news release from the United States Attorney’s Office for the Southern District of New York, Rashan operated a network of ClearMD clinics in New York City from 2021 to 2023, submitting tens of thousands of claims to Medicare, Medicaid, the HRSA Uninsured Program, and private insurers. Prosecutors contend that claims were padded with assessment and management codes, as well as multiple COVID testing codes for treatments that patients never got, resulting in at least $24 million in lost revenue.
Court filings and previous reporting indicate a clinic culture in which employees were instructed to create fictitious progress notes and even construct software to manufacture test results and encounter material to support questionable claims. The pattern of invoicing several COVID test codes for a single visit and then fabricating fraudulent records to match was detailed in a local breakdown of the Rashan case.
Rashan pleaded guilty to one count of conspiracy to commit health care fraud and one count of making false statements about health care problems. Each charge carries a statutory maximum of five years in jail. The case is being handled by the Office’s Complex Frauds and Cybercrime Unit, and the sentencing date is September 22, 2026, according to the U.S. Attorney’s Office, Southern District of New York.
The plea comes during a 2025 nationwide health care fraud crackdown that has accused hundreds of individuals and highlighted more than $14 billion in alleged phony billings, legal analysts observe. That statewide operation prompted additional examination of pandemic-era testing companies and other providers, with legal commentary emphasizing the severe stakes for anyone caught abusing COVID relief and reimbursement schemes, according to DeBevoise & Plimpton LLP.
ClearMD’s own website promoted the organization as a citywide testing and care provider, a polished image that now stands in stark contrast to prosecutors’ papers as the case nears sentence. These filings and subsequent local media imply that many patients received a fast swab and an emailed result rather than comprehensive exams and telemedicine follow-ups. ClearMD occasionally promoted, as seen by the company’s own statement of its approach on ClearMD.
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