Oregon Department of Justice sues COVID testing company
The Oregon Department of Justice today filed a lawsuit in Multnomah County Circuit Court against a COVID-19 testing company called the Center for Covid Control that oversaw three testing sites in the area of Portland, alleging illegal business practices.
The lawsuit alleges that the Illinois-based company and its partner lab, Doctors Clinical Laboratory, failed to train its employees in the proper administration and storage of its tests, resulting in potentially false results, did not report. state test results and falsely advertised its accuracy and timeliness. All three sites closed in January, after operating for nearly four months with little government oversight.
“The defendants neither preserved nor were able to properly store the samples prior to testing due to a lack of proper equipment,” the lawsuit states. “Furthermore, defendants failed to properly train their employees on how to properly collect test samples, and the samples were routinely tested in a manner inconsistent with the manufacturers’ instructions, resulting in potentially inaccurate.”
In the lawsuit, Justice Department officials sketch out a narrative of how the company, started by a young Illinois couple who had started a number of businesses, including an ax throwing parlor, grew rapidly and then failed to deliver on its promise of delivering accurate and timely results. while its owners reaped millions in federal test reimbursements and spent the money on luxury cars.
WW wrote in January how such a venture escaped local, state and regional scrutiny for nearly nine months, a system made easier to operate due to the country’s rush for testing and the easing of restrictions on laboratory tests and certifications.
Aleya Siyaj and Akbar Ali Syed established the company in mid-2020. In six months, they grew from one test site to 300 across the country, including three in the Portland area: one in the Johnson Creek Market parking lot in southeast Portland, one in northeast of Portland and a third in Tigard.
It was essentially a franchise system: a local person started a site and received a starter kit from CCC including both rapid and PCR tests, banners, signage and shipping materials. The site operator paid CCC for the materials and, in return, received a lump sum for each test shipped to the Illinois lab, according to the lawsuit.
Their training materials included videos, according to the lawsuit, which “did not include adequate instructions on how to handle or store the tests as required by the FDA’s emergency use authorization and instructions of the test manufacturer”. No prior medical experience was necessary, the DOJ says.
At the end of each day, the operator would ship unrefrigerated test samples to the Illinois lab, according to the lawsuit.
The company has failed to obtain the necessary federal certification for each of its testing sites in Oregon, the DOJ says.
And perhaps more importantly, the company never reported any of its test results to the Oregon Health Authority except for a five-day testing period in January, according to the lawsuit. If true, it means thousands of Portlanders have taken tests for COVID-19 whose results are now in question. And that means state officials never saw a significant number of COVID test results at the start of the Omicron wave.
At the height of the business, the lab was receiving more than 80,000 tests a day, according to the lawsuit. The company was reimbursed for its testing through a federal program and raised more than $100 million in February. According to the lawsuit, the company also billed insurance companies for reimbursement.
Although it received its first consumer complaints about the company in November, the Oregon Department of Justice did not launch an investigation until January.
The lawsuit seeks to bar the company from operating in Oregon again, impose a hefty civil penalty of $25,000 for each violation, and “[award] any remedy that the Court deems necessary to repair the harm caused to consumers as a result of the illegal commercial practices, including the awarding of compensation to consumers who have suffered a verifiable loss and the restitution of profits obtained illegally.