FBI Raids Another Chicago COVID Testing Company — Which Has Gotten $77 Million From The Feds
NORWOOD PARK — The FBI and other federal agencies raided another Chicago-based COVID-19 testing company Wednesday.
Officers for the FBI, federal Department of Health and Human Services and Chicago Police Department could be seen searching the headquarters of testing company LabElite at 5824 N. Northwest Highway. Officials would not say what spurred the search, though spokespeople for the FBI and U.S. Attorney’s Office said there was “court-authorized law enforcement activity” at the location. The investigation is ongoing, so officials cannot comment on it, according to the U.S. Attorney’s Office.
A spokeswoman for the Illinois Attorney General’s Office said that agency is “committed to protecting residents from those who attempt to profit off of the deadly COVID-19 pandemic” and is contact with Illinoisans who file complaints about COVID-19 testing locations.
“As a result, today investigators from the Attorney General’s Office and other law enforcement partners are taking action,” spokeswoman Annie Thompson said. “We will not comment on active investigations as we work to hold accountable individuals who engage in unlawful conduct.”
LabElite spokeswoman Lissa Druss said the lab is “fully cooperating with the U.S. Attorney’s Office.”
LabElite — which has received more than $77 million from the federal government for COVID-19 testing — has been the subject of more than a dozen complaints to the Illinois’ Attorney General’s Office.
Multiple LabElite customers also told Block Club they experienced various issues: They said results were badly delayed or never delivered, they got results that didn’t make sense, the company didn’t respond to their concerns and some were told to not enter their insurance information when testing, among other things.
LabElite partners with testing sites that collect rapid and PCR samples, with the PCR samples then processed by the lab. Druss declined to say how many sites LabElite has partnered with, though she said the pop-ups must go through a “stringent” process that includes training for staff and spot checks for quality control. The lab has processed tests from various states, including Illinois, Pennsylvania and Florida.
Druss said many of the issues reported by customers were a result of the Omicron surge, which saw testing spike. LabElite processed “hundreds of thousands” of tests during the surge, Druss said.
“This was during the unprecedented spike in COVID that crushed hospitals and everyone else, especially in the December and January timeframe,” Druss said. “Every complaint that we have had has been personally handled and remedied.”
The FBI’s search comes as other Chicago-area testing companies face various investigations: The Center for COVID Control’s Rolling Meadows headquarters were raided by the FBI, and the company and its lab have been sued by two states’ attorney generals after Block Club reports about numerous issues with the companies. O’Hare Clinical Lab and Northshore Clinical Lab have been cited at the highest level by federal authorities.
Together, these four Chicago-area testing companies have processed millions of tests for hundreds of sites across the United States. They have received more than $582 million from the federal government.
LabElite was registered with the state of Illinois in October 2020 under Nikola Nozinic. A person with the same name had a now-closed bar called The Whiskey Thief in suburban Evanston, and he’s run construction and plumbing companies.
Nozinic did not respond to a request for comment Wednesday.
The Illinois Attorney General’s Office has received at least 16 complaints from consumers about LabElite, a spokeswoman previously said. The office could not immediately be reached Wednesday.
The Better Business Bureau, a nonprofit that monitors businesses, has received two complaints about the lab and has given the company a B- rating, a spokesperson said.
COVID-19 testing labs must be accredited by the federal Centers for Medicare and Medicaid Services or by one of that agency’s accreditation organizations. A spokeswoman for that agency said LabElite is accredited by an organization called COLA.
COLA representatives have not responded to multiple requests for information about LabElite, if complaints have been filed against it or if inspections have been done at its lab.
Block Club spoke to multiple people who said they experienced a litany of issues — from not getting rapid results to workers not wearing masks — at pop-ups that partner with LabElite.
The pop-ups that collect samples have faced little oversight from government agencies. Officials have said the onus is on the labs that partner with those testing sites to ensure they act appropriately.
LabElite only partners with pop-up companies after they’ve created a “strong, stringent business agreement,” and the pop-up companies must go through training and acquire a waiver for testing, Druss said.
LabElite spot checks pop-up testing sites, as well, Druss said, but she refused to provide details about what those checks entailed, how often they occur or how a site is selected for review. LabElite has cut off its relationship with at least one of the pop-ups where customers experienced issues, Druss said.
Druss declined to say what companies LabElite has partnered with, saying that information is “confidential.”
LabElite has experienced issues before Wednesday’s search: Pop-ups in Philadelphia that were collecting test samples to send to LabElite were falsely claiming to be affiliated with the Federal Emergency Management Agency and were allegedly asking for customers’ social security numbers, according to the Philadelphia Inquirer.
The testing sites were shut down, and Nozinic apologized for the confusion and said LabElite had ended its partnership with the sites, according to the Inquirer.
“These guys were kind of running a wild s—show, so they were ordered to shut them down,” Nozinic told the Inquirer.
A box of samples that was supposed to be delivered to LabElite’s Chicago lab was also mistakenly delivered by FedEx to a family in Hawaii, according to the Boston Globe.
‘I Know It Was Wrong’
Customers have reported various issues with LabElite, especially during the Omicron surge in late December and early January.
Druss said many of those issues were due to problems with FedEx, as LabElite was “on the phone constantly” with the shipping company during the surge, trying to find out where packages of tests were. LabElite also saw some employees get sick with COVID-19, Druss said.
“All of that wrapped into one, it was like a perfect storm,” Druss said.
Renee Fonseca, of Hyde Park, said she went to a testing facility partnered with LabElite on Dec. 16 because she was feeling under the weather and had a flight coming up. Workers there told her she’d get rapid results in 24 hours and PCR test results in six to seven days, she said. They used one swab to get Fonseca’s sample for the separate rapid and PCR tests, she said.
No test results arrived within 24 hours, so Fonseca called the testing facility — but its calls went straight to a full voicemail, she said. She called LabElite’s main office, where a worker told Fonseca they couldn’t give her results and she should keep trying to call the facility she’d tested at, she said. She called multiple times after that but didn’t get her rapid test results until Dec. 21 — about a week after she’d tested, she said.
“Which is just really bad for any sort of contact tracing,” Fonseca said. She “basically gave up ever seeing my PCR results.”
The PCR results did come in, but not until Jan. 3, Fonseca said.
“… Their timeline is so shifted, and that’s a major issue for any sort of preventative testing prior to going to events, contact tracing,” Fonseca said. “Most folks can’t just stay home for four weeks, waiting for a PCR when they need to go to work or do things. … It’s not a system that would work given reality. There’s no reason for me to waste my time and energy with them again.”
Sheila Quirke, of Rogers Park, said her family used a pop-up partnered with LabElite about six times in 2021, typically not experiencing issues. But when they stopped by Dec. 19, the facility was “very crowded” and “there was a lot of confusion,” Quirke said.
The worker who took the family’s tests didn’t wear a mask, Quirke said. Their rapid results didn’t arrive promptly, so Quirke drove by about three hours later and the testing site was even more crowded, she said. She went back a third time that evening, worried the workers wouldn’t send her family’s test results before closing for the night.
The site was less crowded at that point, Quirke said, and a worker opened the door of a shed and showed her “a bunch of tests” they hadn’t processed because the site had been so busy. The worker told Quirke he’d stay late that night, process the rapid tests and sent results. Quirke got her family’s results about three hours later.
The family’s PCR test results didn’t come for weeks. Quirke has questioned if the results were accurate since so much time elapsed between when her family tested and when they got results. The site has since shut down, she said.
“I think I lost faith on the 19th,” Quirke said. “It didn’t feel as trustworthy.”
Debby Donovan, of suburban Berwyn, said she went to a city-organized mass testing event run by LabElite where she struggled to fill out a registration form on her phone. A worker there gave Donovan a paper form to fill out and told her to not put down her insurance, though she wrote her insurance information anyway, she said. The worker told Donovan it’d be quicker if she didn’t provide her insurance, she said.
A worker doing a PCR test for Donvan put a swab up her nose, immediately removed it and was done, Donovan said. The worker did not swirl the swab or keep it Donovan’s nose for several seconds, she said.
A rapid test at the site showed Donovan was positive, and she took an at-home test that also came back positive, she said. But LabElite later sent Donovan a PCR test result from the same event that said she was negative, she said.
Heather O’Leary, of the Gold Coast, said she tested at a LabElite-partnered site Dec. 22 where a worker told her to not enter insurance information.
“Oh, don’t worry about it,” the worker said, according to O’Leary. “Just leave it blank.”
The workers wore masks but not gloves, and there was no social distancing in the “very small” space, O’Leary said. O’Leary was given swabs with “minimal directions,” she said. That night, she got a rapid test result that said she was negative.
O’Leary’s PCR test result still hasn’t arrived, she said Wednesday.
A Mount Greenwood man who asked to be anonymous said he tested multiple times at a facility that partnered with LabElite. A worker at the site told him to not put down his insurance, he said, and the site advertised PCR results in three to four days. He went multiple times, sometimes getting PCR results — but other times not getting a result at all or having to wait weeks for one, he said.
“They weren’t on time, so who knows how good they are after — there’s gotta be an expiration date, right?” the Mount Greenwood man said. “If it’s two weeks, I don’t think that test is any good.”
Druss denied LabElite hasn’t collected insurance information properly, saying it would be “wrong, untruthful and uncalled for.” The lab is paid more for testing when it bills insurance than when it seeks reimbursement through the federal government, Druss said.
“Now, if there was a rogue employee somewhere along the way, I can’t speak for that,” Druss said.
Ellen Bedore, of Mount Greenwood, was tested Jan. 7 at a pop-up as she prepared to fly to India so she could meet her newborn twin grandsons. LabElite did send her rapid test results “right away,” she said, but she needed a PCR result for the flight. Workers had told her that result would take 48-72 hours to arrive; when it didn’t come on time, Bedore tried to call and email LabElite, but she didn’t hear back, she said.
Bedore canceled her flight, a “heartbreaking” decision that made her exhausted and physically sick for weeks, she said. She finally got PCR results on Jan. 26 — but she said they came from O’Hare Clinical Lab, another Chicago-based testing lab that’s faced scrutiny.
The result was negative, but it was weeks too late for the flight. Bedore still hasn’t been able to meet her grandsons.
“If they say I’m getting my PCR results in 24-48 hours, and I get them three weeks later — I couldn’t go back to a place like that,” Bedore said.
Lisa Pugliese said she was tested Dec. 16 at a site partnered with LabElite, and a worker told her she’d get PCR results in two days. The next morning, when she still hadn’t gotten a rapid result, she called LabElite but wasn’t provided her rapid result, she said. Her rapid result was sent to her later that day.
But Pugliese still hadn’t gotten her PCR result by Dec. 20, so she called again. A worker told Pugliese she should test again because her result was still “pending” and her test had likely been “lost in the system,” Pugliese said. She called again later that day and asked for her result again, but the worker said they didn’t have her result.
About midnight, LabElite sent Pugliese a negative result, she said. Pugliese said she does “not necessarily” trust the accuracy of the results.
“Their reports look a little bit official,” Pugliese said. “But at this point, I’m not trusting of any of these sites because of everything that’s been reported.”
Demetra Soter, a doctor, said she, her husband and their daughter went to a testing site partnered with LabElite Dec. 29 and had samples taken for rapid and PCR tests. They didn’t get their rapid results that day, and no one picked up when Soter called LabElite multiple times, she said. She called again Dec. 30 and a worker told her she had to re-register, Soter said. She called again multiple times after that, but the workers couldn’t provide the Soters’ results, she said.
On Dec. 31, Soter’s family did at-home tests and all of them were positive for COVID-19. She called LabElite again Jan. 1 but still wasn’t provided with the family’s rapid or PCR results, she said.
The Soters went and got tested again, but the worker “barely moved [the swab] around one time,” only put it in one nostril and “never went very high,” Soter said.
Hours later, Soter got a call that her rapid test result was negative — which she didn’t trust since her at-home test was positive. She never got her PCR test result from the second testing experience.
Soter went to Northwestern Hospital on Jan. 4 and rapid and PCR test results from there showed she had COVID-19, she said.
“The accuracy of my second [LabElite] result is terrible,” Soter said. “I mean, it was wrong; and I know it was wrong. He didn’t swab it properly.
“… That negative test, which they did send me, I could have gone out and infected other people because I felt great. But I had the virus in my nose. And their sloppiness could have resulted in a gazillion people, or a lot of people, coming down with this. … How many other people did they send out with false negative tests?”
Reporter Mina Bloom contributed to this story.
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