Keith J. Gray, 39, of McKinney, Texas, set up a racket to bill Medicare for genetic tests under the guise of screening for heart disease.
Gray, the owner and operator of two clinical laboratories, Axis Professional Labs LLC (Axis), and Kingdom Health Laboratory LLC (Kingdom), offered and paid kickbacks to marketers in exchange for their referral of Medicare beneficiaries’ DNA samples, personally identifiable information (including Medicare numbers) and signed test orders from medical providers authorizing the medically unnecessary genetic tests.
As part of the scheme, the marketers engaged other companies to solicit Medicare beneficiaries through telemarketing and to engage in “doctor chase,” i.e., to obtain the identity of beneficiaries’ primary care physicians and pressure them into approving genetic testing orders for patients who purportedly had already been “qualified” for the testing during telephone calls conducted by non-medical personnel at one of the companies retained by the marketers, not by their physicians.
In an effort to conceal the kickback payments, Gray used sham contracts and invoices that purported to charge for “marketing” hours but, in reality, were reverse-engineered to match the amounts agreed to under the illegal per-sample kickback arrangement.
Gray also sought to conceal the scheme by, among other things, referring to the payments as being for “software” and loans that never existed. Evidence at trial included text messages between Gray and his co-conspirator becoming giddy over the amount of money they were making from Medicare.
Gray’s co-conspirator messaged, “$ent, you should have it any minute if you don’t already. Get it?” Gray responded, “Sorry, I was filling my bathtub with ones. Yes lol.”
Axis and Kingdom billed Medicare approximately $328 million for the false claims, of which Medicare paid approximately $54 million.
Gray laundered his cut by splurging on luxury vehicles, including a Dodge Ram truck and a Mercedes Benz SUV, each costing well over $140,000.
The jury convicted Gray of conspiracy to defraud the United States and to pay and receive health care kickbacks, five counts of violating the Anti-Kickback Statute, and three counts of money laundering. He is scheduled to be sentenced at a later date. Gray faces a maximum penalty of 10 years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division; Special Agent in Charge R. Joseph Rothrock of the FBI Dallas Field Office; Special Agent in Charge Jason E. Meadows of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region; Chief William Marlowe of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU); and Special Agent in Charge Kris Raper of the Department of Veteran’s Affairs Office of Inspector General (VA-OIG), South Central Field Office, made the announcement.
The FBI, HHS-OIG, MFCU, and VA-OIG investigated the case.
Trial Attorneys Ethan Womble and Adam Tisdall of the Criminal Division’s Fraud Section are prosecuting the case.