A recent scandal in Philadelphia involving a local startup embroiled in a public health fiasco showcases how times of crisis can allow fraud to rear its ugly head. As financial and public pressures to succeed create more opportunities for fraud to be committed, similar cases of mismanagement and ineptitude may surface across the country.
Philly Fighting COVID began as startup using 3-D printing to create face-shields for students at Drexel University. It then became a non-profit aiding the city of Philadelphia with testing, working with partner organizations to provide community testing.
Upon news of vaccine approvals in the fall, Philly Fighting COVID’s CEO, 22-year-old graduate student Andrei Doroshin, began to impress himself upon city officials. With claims of vaccinating between 500,000 to 1.5 million people through five mass-vaccination sites, Doroshin and his startup seemingly appeared right when Philadelphia needed them.
The startup secured a deal with the Philadelphia Department of Public Health after pitching its services to the Philadelphia City Council in November 2020. While it did not sign an official contract, it received a portion of Philadelphia’s vaccine allotment. However, problems began to arise shortly thereafter.
An investigation by WHYY, a Philadelphia public media organization, revealed that in December, Philly Fighting COVID reorganized as a for-profit company, Vax Populi. According to WHYY, Philly Fighting COVID officials maintained that “a for-profit entity was needed to bill insurance companies for reimbursements from the vaccine, a plainly untrue claim in a city with numerous nonprofit health care providers.”
Following that, in January, Philly Fighting COVID closed down all testing events, leaving community members effectively in the dust as Doroshin told partnered groups that testing was no longer important.
Administrative issues plagued Philly Fighting COVID as well. Clerical errors in over-promising vaccines and a confusing pre-registration site created massive lines and patients with canceled doses. One volunteer nurse, Katrina Lipinsky, even recalled that Doroshin took vaccines home; confirmed by Doroshin himself in an interview with NBC’s Today show. The organization’s privacy policy also raised red flags for city officials, as it could have allowed Philly Fighting COVID to sell the data submitted through their pre-registration site.
The façade was slowly falling apart. Anonymous volunteers and Philly Fighting COVID staff members claimed Doroshin spoke openly about getting rich off of the endeavor, raving about profiting off of providers’ ability to bill insurance companies for an administration fee since they received the vaccines free of charge from the city. One volunteer even saying they said they were going to be millionaires.
More volunteers and nurses came forward claiming that as a testing site, Philly Fighting COVID was “a consistently disorganized operation with under-trained volunteers and disregard for patient privacy.” One nurse, Debbie Flamholz, told WHYY that it “was always very chaotic, and everyone had a different idea of what organization meant.”
On January 25th, Philadelphia cut ties with Philly Fighting COVID, citing “the company’s abandonment of its testing work and the company’s new privacy policy, which would have allowed it to sell patient data,” according to a January 29 NPR article.
Communities, strapped for resources made acute by the pandemic, can be targeted by those looking to profit off of rapid spurts of funds, “get-rich-quick” schemes and assorted administrative chaos that arises in crises. While it may not explicitly be fraud, it is clear that Philly Fighting COVID aimed to profit off of COVID-19 vaccine roll-out in Philadelphia.
Similar schemes may be happening across the country. With more cities desperate to vaccinate their citizens, misplaced trust in organizations like Philly Fighting COVID can lead to fraudulent activity, negligence, and delinquency of duties. With opportunities for fraud on the rise, those brave individuals who speak out like Lipinsky or Flamholtz could be critical in identifying fraudulent actors and rooting them out from high-profile positions.
