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Founders of 3 lab companies indicted in $300M fraud

Founders of 3 lab companies indicted in $300M fraud
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According to the indictment, Unified Laboratory Services and Spectrum Diagnostic Laboratory Founder Jeffrey Paul Madison and Chief Operating Officer Mark Christopher Boggess, as well as Reliable Labs Co-Founders Biby Ancy Kurian and Abraham Phillips, allegedly paid kickbacks to induce medical professionals to order medically illegally lab tests. They then billed the tests to Medicare and other federal healthcare programs, according to the US Attorney for the Northern District of Texas Chad Meacham.


Two physicians and a nurse practitioner allegedly accepted these bribes and ordered millions of dollars’ worth of tests while receiving hundreds of thousands of dollars in kickbacks between 2015 and 2018, according to the indictment. Meanwhile, Unified, Spectrum, and Reliable claims disguised the kickbacks as legitimate business transactions, including as medical adviser agreement payments, salary offsets, lease payments, and marketing commissions, the Justice Department said.


Through marketers, the labs allegedly paid the doctors hundreds of thousands of dollars for “advisory services” that were never performed in return for lab test referrals. Portions of physicians’ staff salaries and office leases were also allegedly paid, contingent on the number of lab tests referred each month. Lab markers even made direct payments to a provider’s spouse, according to the Justice Department.


Furthermore, Madison claims convinced Kurian and Philips to convert Reliable Labs into a physician-owned lab, offering physicians ownership opportunities only if they referred an adequate number of lab tests, according to the Justice Department. And in some cases, advance payments were disbursed to physicians to appease the physician and ensure samples would not be sent instead to other labs.


If convicted, the defendants face up to 55 years or more in federal prison.


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