USE Department of Justice USE
The fallout from a 2021 Federal investigation into Spring Hill-based Crestar Labs is continuing with a new 40-count second superseding indictment that has charged eight people in a Medicare and Medicaid fraud conspiracy across six states.
 
As previously reported, the Spring Hill lab was a self-described "diagnostic reference laboratory" that federal prosecutors allege was involved in a fraudulent $86 million Medicare billing scheme.
 
In June 2021, the lab's owner and Chief Executive Officer, Fadel Alshalabi, of Waxhaw, N.C., was arrested in Chicago, Illinois, and charged with aiding and abetting as well as with violating the federal anti-kickback statute.
 
In December 2021, Elizabeth Turner, the owner of Kentucky telemedicine company Advanced Tele-Genetic Counseling (“ATGC”), plead guilty to conspiracy to pay and receive health care kickbacks.
 
According to the United States Department of Justice, patients were targeted by way of door-to-door marketing, senior citizen fairs and nursing homes, administering mouth swab tests in exchange for kickbacks paid by Crestar Labs, all with the knowledge of the co-conspirators that the tests were fraudulent.
 
"As a result of Turner’s involvement in the conspiracy, ATGC received approximately $234,730 in illegal kickback payments from marketing company co-conspirators, including Genetix, LLC," a DOJ news release reads.
 
"As a result of the conspiracy, Medicare and Medicaid paid laboratories, including Crestar Labs, LLC, millions of dollars in reimbursements they were not entitled to receive because the CGx tests had been procured through the payment of kickbacks, and were otherwise ineligible for reimbursement."
 
This month the DOJ unsealed a new indictment in the investigation against the following people for the charge of Medicare and Medicaid fraud conspiracy.
  • Former Vice President of Sales for Crestar Edward D. Klapp, 63, of Jupiter, Florida
  • Genetix LLC, Owner and Chief Executive Officer Melissa L. Chastain, 57, of Belton, South Carolina
  • Genetix President Roger Allison, 64, of Greenville, South Carolina
  • Former Crestar Director of Client Services and Vice President of Operations Dakota White, 28, of Easley, South Carolina
  • Robert Alan Richardson, 53, of Silver Spring, Maryland, and Edward Burch, 53, of Rockville, Maryland, both who are principals of Freedom Medical Labs, LLC
  • Secure Health Owner Samuel Harris, 27, of Salt Lake City, Utah
Klapp and Chastain were both originally charged in the DOJ's first superseding indictment in October 2021. 
 
"The second superseding indictment alleges that the co-conspirators entered into sham contracts and paid kickbacks in exchange for genetic testing and urine analysis samples," the August 2022 DOJ news release reads. "This included targeting and recruiting elderly patients who were federal health care program beneficiaries in order to obtain their genetic material for conducting genetic tests.
 
"The tests were then purportedly approved by telemedicine doctors who did not engage in the treatment of the patients, and often did not even speak with the patients for whom they ordered tests. Frequently, the patients or their treating physicians never received the results of the tests."
 
Alshalabi and the charged co-conspirators allegedly billed Medicare and Medicaid more $150 million from 2016-21.
 
If convicted, Alshalabi faces up to 10 years on his money laundering charges, and all defendants face up to 10 years in prison on the health care fraud and Anti-Kickback Statute charges, and up to 5 years on the charge of conspiracy to violate the Anti-Kickback Statute.