Shares of DocGo (NASDAQ:DCGO), a company known for its mobile medical services, are plunging lower following the publication of a short report by Fuzzy Panda. The short seller has accused the company of improper billing practices, a management team with connections to fraud and unethical practices and contract issues in regards to New York City migrant asylum seekers, among other allegations.
According to Fuzzy Panda, former employees of DocGo have alleged that it has committed Medicare and insurance fraud on multiple occasions. The short seller claims that DocGo has managed to cover up these illegal practices by firing whistleblowers.
“It was definitely a lot of fraudulent billing practices because they’re forcing you to write certain things that might not be necessarily true in order to make it billable,” said a former DocGo EMT.
Fuzzy Panda Issues Short Report on DCGO Stock
Fuzzy Panda also brings to light a legal case concerning a former DocGo nurse. The nurse alleged that her manager forged her signature on Covid-19 tests that never actually took place. Fuzzy Panda believes that this was done in order to bill for tests that were never completed. After the nurse reported the incident, she was promptly fired.
The short seller also lists several examples of fraud and unethical practices committed by DocGo’s management in the past. These include DocGo’s Chief Financial Officer, who was a board member of a penny stock with connections to a hedge fund charged with perpetuating a Ponzi scheme, and the company’s CEO, who resigned after admitting that he lied about his academic credentials.
Meanwhile, DocGo had previously secured a one-year $432 million no-bid contract to provide NYC asylum seekers with housing and care. However, the contract was later rejected by NYC Comptroller Brad Lander. Lander expressed doubts about the company’s ability to provide migrants with housing and social services.
“We don’t do this lightly […] It’s the first emergency contract we’ve declined to approve out of 300 submitted to our office,” said Lander.
Later on, Lander announced a real-time audit into the contract. Fuzzy Panda notes that the company is also under investigation by several agencies, such as the New York Attorney General’s office.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
