One December day in 2021, two Houston clinics allegedly sent a federal COVID-19 program more than 9,000 claims for office visits. The Justice Department says that works out to roughly one patient visit every nine seconds over 24 hours. A federal grand jury indicted Dr. Joseph A. Montes, 66, of Houston, on 12 counts, and the U.S. Attorney’s Office for the Southern District of Texas says the billing totaled about $30 million.
The indictment was returned September 30 and unsealed October 6, when Montes, now in custody, made his first court appearance at 10 a.m. before U.S. Magistrate Judge Christina Bryan. The office describes an indictment as a formal accusation, not evidence, and says a defendant is presumed innocent unless convicted through due process of law.
What the claims allegedly looked like
Montes owned and operated two practices, Joseph A. Montes MD & Associates, P.A. and Montes Medical PLLC. Prosecutors allege that from 2020 to 2022 he let co-conspirators run pop-up COVID-19 testing sites under his name. Patients received nasal swab tests, the indictment says, while the co-conspirators billed the Health Resources and Services Administration, or HRSA, for office visits that were never provided.
On about 29 dates, the clinics allegedly submitted more than 3,000 claims for evaluation and management services each time. On December 1, 2021, the count allegedly passed 9,000 in a single day. The release does not say how many patients were involved.
Montes and others allegedly billed about $30 million, and HRSA paid about $20 million, according to the release. The \$30 million is the amount billed, and the amount paid is the smaller number.
How a program like this gets billed, and who pays when the bills are not real, is the question the case leaves for taxpayers. HRSA ran a COVID-19 program that provided claims reimbursement to health care providers for testing uninsured individuals, according to the agency’s program page. The release names HRSA but does not name the specific program.
The $30 million billed and $20 million paid are the totals prosecutors will have to prove if the case goes to trial.
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The charges are conspiracy, wire fraud and money laundering. The release does not break down the 12 counts by type. Prosecutors say Montes spent proceeds on expensive purchases at a luxury car dealership and at Tiffany & Co.
How the penalties stack up
If convicted, Montes faces up to 5 years in prison on the conspiracy charge, up to 20 years on each wire fraud count and up to 10 years on each money laundering count. The release lists a possible maximum fine of $250,000. Assistant U.S. Attorney Kathryn Olson is prosecuting the case.
Three agencies investigated: FBI Houston, the Department of Health and Human Services’ Office of Inspector General and the Texas Attorney General’s Office Medicaid Fraud Control Unit. The Medicaid units, 53 of them nationwide, investigate and prosecute Medicaid provider fraud, according to the HHS inspector general.
The release adds that the Justice Department created its National Fraud Enforcement Division on April 7, and that the case supports a federal anti-fraud task force chaired by Vice President J.D. Vance. It includes no quotes from named officials.
What audits found in the same program
The HHS inspector general reviewed claims paid under the HRSA uninsured-patients program for 2020 service dates. Its audit summary found the program paid $4.2 billion for that year, with nearly $784 million, or 19 percent, improper. The audit is separate from the Montes case and does not mention him. It covers claims for 2020 service dates only, so the 2021 and 2022 billing described in the indictment falls outside its figures.
The audit’s findings were also reported by Fierce Healthcare in July 2023, which said the program covered 19.2 million patients and that HRSA planned remedial action, including seeking repayment.
Reading how the COVID claims program was billed
HRSA’s program page says the agency reimbursed providers for COVID-19 testing and treatment of uninsured individuals, with claims deadlines of March 22, 2022 for testing and treatment and April 5, 2022 for vaccines. The Montes indictment covers 2020 through 2022, so the alleged claims fall within that window. The agency says the program stopped accepting claims because of a lack of sufficient funds, and that no additional claims payments will be made, although reporting and auditing requirements continue. The Fiscal Responsibility Act of 2023 and a related rescission of program funds also ended further payments.
The allegations turn on a simple mismatch. A nasal swab at a pop-up site is one service, and an office visit billed for the same patient is another. The indictment says the second kind of claim was submitted for visits that were never provided, in volumes no single practice could deliver in a day.
The trial record, if the case reaches one, will show how the claims were filed and what HRSA paid on each. Until then, the figures in the release are accusations, and the $20 million HRSA paid is the amount at issue for taxpayers.
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This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
