HOUSTON PHYSICIAN INDICTED IN ALLEGED $30 MILLION COVID-19 HEALTH CARE FRAUD AND MONEY-LAUNDERING SCHEME

HOUSTON – A Houston physician has been indicted on federal charges accusing him of participating in a multimillion-dollar COVID-19 fraud scheme that allegedly used pop-up testing sites to bill the federal government for medical office visits that never occurred.

Dr. Joseph A. Montes, 66, was taken into custody following the unsealing of a 12-count federal indictment returned by a grand jury on September 30. Montes made his initial appearance before U.S. Magistrate Judge Christina Bryan on October 6.

Federal prosecutors allege that Montes and others submitted approximately $30 million in claims to the Department of Health and Human Services’ Health Resources and Services Administration, or HRSA, between 2020 and 2022. According to the indictment, HRSA paid approximately $20 million on those claims.

Montes owned and operated two Houston medical practices, Joseph A. Montes MD & Associates, P.A. and Montes Medical PLLC. Prosecutors allege that he allowed co-conspirators to operate temporary COVID-19 testing locations under his name while using the clinics to submit reimbursement claims for medical services that were not actually performed.

Patients who visited the locations allegedly received nasal-swab COVID-19 testing. The indictment contends that those encounters were then represented to HRSA as evaluation and management office visits even though the billed services had not been provided.

The volume of the claims is a central part of the government’s case.

According to the indictment, Montes’ clinics submitted more than 3,000 evaluation and management claims on approximately 29 separate dates. On December 1, 2021, prosecutors allege that more than 9,000 claims were submitted in a single day.

That volume would represent approximately one purported patient encounter every nine to ten seconds across an uninterrupted 24-hour period, illustrating why federal investigators characterized the billing activity as impossible.

The government alleges that the conduct continued from 2020 through 2022, with Montes and others submitting claims to HRSA for office visits prosecutors contend were never provided.

The indictment accuses Montes and others of exploiting that payment system by seeking reimbursement not for the nasal-swab testing actually performed at the temporary sites, but for additional office-visit services prosecutors contend never occurred.

Federal authorities also allege that money generated through the scheme was moved through financial transactions that resulted in money-laundering charges.

According to prosecutors, Montes used proceeds connected to the alleged fraud for high-end personal purchases, including expenditures at a luxury automobile dealership and Tiffany & Co.

The indictment charges Montes with offenses carrying substantial potential penalties if he is convicted. The conspiracy charge carries a maximum sentence of five years in federal prison. Each wire-fraud count carries a maximum of 20 years, while each money-laundering count carries a maximum sentence of 10 years.

Montes also faces a potential maximum fine of $250,000, although any sentence or financial penalty would ultimately be determined by the court if he is convicted.

The extraordinary billing volume alleged in this case gives prosecutors a numerical basis for challenging whether the claimed medical encounters could realistically have occurred. More than 9,000 evaluation and management claims in a single day would require an impossible pace if each claim represented a genuine medical visit requiring evaluation, documentation, and professional services.

The government’s allegations also separate the COVID-19 tests themselves from the services billed to HRSA. Prosecutors are not alleging simply that testing sites existed. Their case is that individuals visited the sites for nasal-swab testing while separate office-visit claims were allegedly submitted for services the government says were never performed.

That distinction will be central to the prosecution because federal health care fraud cases often turn on whether the service described in a reimbursement claim was actually rendered, medically supported, and properly documented.

The investigation was conducted by the FBI Houston Field Office, the Department of Health and Human Services Office of Inspector General, and the Texas Attorney General’s Office Medicaid Fraud Control Unit.

Assistant U.S. Attorney Kathryn Olson is prosecuting the case.

The prosecution also falls within a broader Department of Justice effort targeting fraud involving government funds and benefit programs. On April 7, 2026, the Justice Department announced the creation of the National Fraud Enforcement Division, focused on investigating and prosecuting fraud against the American people.

In this case, the government alleges a scheme involving tens of millions of dollars in medical billing, thousands of purported patient encounters, multiple clinics, temporary COVID-19 testing operations, and the movement of allegedly fraudulent proceeds.

Montes has been charged by indictment and has not been convicted. The allegations against him remain accusations, and he is presumed innocent unless and until the government proves guilt beyond a reasonable doubt through the judicial process.

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