Oregon Department of Justice Sues COVID Testing Company

The Oregon Department of Justice filed a lawsuit in Multnomah County Circuit Court today alleging unlawful trade practices at a COVID-19 testing company called Center for Covid Control that oversaw three testing sites in the Portland area.

The lawsuit alleges the Illinois-based company and its partner lab, Doctors Clinical Laboratory, failed to train its employees how to properly administer and store its tests resulting in potentially false results, failed to report test results to the state, and falsely advertised the tests’ accuracy and timeliness. The three sites closed in January after running for nearly four months with little government oversight.

“Defendants neither did nor could properly store specimens prior to testing due to a lack of proper equipment,” the lawsuit reads. “Moreover, Defendants failed to properly educate their employees on how to properly collect test specimens, and specimens were consistently tested in a manner inconsistent with the manufacturers’ instructions, resulting in potentially inaccurate results.”

In the lawsuit, Justice Department officials sketch a narrative of how the company, started by a young Illinois couple who had opened a number of businesses, including an ax-throwing lounge, expanded quickly, then failed to fulfill promises to deliver accurate and timely results as its owners raked in millions of dollars in federal reimbursements for tests and spent the money on luxury cars.

WW wrote in January how such a company had slipped through the cracks of local, state and regional oversight for nearly nine months, a system made easier to exploit due to the country’s scramble for tests and loosened restrictions on testing and lab certifications.

Aleya Siyaj and Akbar Ali Syed started the company in mid-2020. Within six months, they went from one testing site to 300 across the country, including three in the Portland area: one in the Johnson Creek Market parking lot in Southeast Portland, another in Northeast Portland, and a third in Tigard.

It was essentially a franchise business: A local operator would start a site and be sent a starter pack by CCC, including both rapid and PCR tests, banners, yard signs and shipping materials. The site operator paid CCC for materials and, in return, was paid a flat fee for every test shipped to the Illinois lab, according to the lawsuit.

Training materials included videos, according to the lawsuit, that “did not include adequate instructions about how to handle or store tests as required by the FDA’s Emergency Use Authorization and test manufacturer instructions.” No prior medical experience was necessary, DOJ says.

At the end of each day, the operator would ship unrefrigerated test samples to the Illinois lab, the lawsuit alleges.

The company failed to obtain necessary federal certification for each of its testing sites in Oregon, DOJ says.

And perhaps most significantly, the company never reported any of its testing results to the Oregon Health Authority, except for a five-day span of testing in January, according to the lawsuit. If true, that means thousands of Portlanders took tests for COVID-19 whose results are now in question. And it means state officials never saw a significant number of COVID test results as the Omicron wave began.

At the company’s height, the lab was receiving more than 80,000 test specimens per day, the lawsuit says. The company was reimbursed for its tests through a federal program, and raked in over $100 million by February. According to the lawsuit, the company also billed insurance companies for reimbursement.

Despite getting 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 ever operating in Oregon again, impose a hefty $25,000 civil penalty for every violation, and to “[award] such relief as the Court finds necessary to redress harm to consumers as a result of the unlawful trade practices, including an award of restitution to consumers that have suffered an ascertainable loss and disgorgement of unlawfully obtained profits.”