Headlines that Matter for Companies and Executives in Regulated Industries

Jury Finds LabSolutions CEO Guilty in $463 Million Telemed Billing Scheme

On Wednesday, a federal jury in the Southern District of Florida found Minal Patel, the CEO of genetic testing company LabSolutions, guilty on 10 counts, including health care fraud, payment of kickbacks, and conspiracy to commit money laundering. Patel was charged in September 2019 for his role in a scheme to bill $483 million worth of medically unnecessary genetic testing to Medicare, resulting in $187 million in reimbursements. The government claimed that he and others recruited patients via telemarketing campaigns and health fairs for genetic testing, whether they needed it or not. The government also claimed that Patel paid 50% of the cost of the tests as kickbacks for patient referrals. Patel is scheduled to be sentenced in March. The case is part of a larger investigation by the US Department of Justice (DOJ) Criminal Division’s Fraud Section into telehealth companies and lab executives called Operation Double Helix.

DOJ’s press release is here.

Mortgage Company to Pay $38.5 Million to Settle FCA Allegations

Academy Mortgage Corporation will pay $38.5 million to resolve a qui tam lawsuit. The whistleblower, a former underwriter of the company, alleged that between January 2008 and April 2017, the company’s underwriting practices were deficient and resulted in employees disregarding Federal Housing Administration (FHA) rules and falsely certifying compliance with requirements for mortgages insured by the FHA.

DOJ’s press release is here.

Manufacturer Agrees to Settle Self-Reported FCA Violations for $14.5 Million

Coloplast, a Danish medical product manufacturer, settled claims that the company violated the Trade Agreements Act and the Price Reductions Act for $14,547,347. Coloplast self-disclosed that it supplied the US Department of Veterans Affairs with products manufactured in non-designated countries and misreported the countries of origin. Coloplast also disclosed that it failed to provide the government with contractually-required discounts, resulting in overbilling.

The US Attorney Offices’ press release is here.

Texas Physician and Office Manager Settle AKS Allegations

A Texas physician and his office manager and wife have settled a False Claims Act lawsuit for $422,789. The government alleged that the husband and wife referred patients for testing to three laboratories in Texas, New Jersey, and South Carolina in exchange for kickbacks disguised as investment returns, inflated fees passed through a third-party contractor as volume-based commissions, and inflated space rental payments. Both defendants have agreed to cooperate with the government’s prosecution of other participants in the alleged schemes.

DOJ’s press release is here.