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Lab Owner, Marketer, Doctor Plea Guilty to Toxicology Lab Kickback Scheme

NEW YORK –The US Department of Justice said on Wednesday that it has convicted and sentenced several people involved in a toxicology lab kickback scheme.

According to DOJ, on Dec. 4 and Dec. 7, 2020, Uday Shah of Houston and Timothy Andrews of Deer Park, Texas, were sentenced to 24 and 15 months in prison, respectively, for paying kickbacks to physician Ghyasuddin Syed to refer urine drug testing to labs run by Shah. Syed pleaded guilty on Dec. 2, 2020, of soliciting and accepting kickbacks as part of the scheme.

Shah owned several toxicology labs including Pinnacle Laboratory in Lexington, Kentucky, and Andrews worked as a marketer for Shah's labs. According to DOJ, between November 2014 and August 2017, they paid $475,992 in kickbacks to Syed and his wife Shazana Begum, and Shah's labs billed Medicare for urine drug testing, which paid the labs $325,739 to which they were not entitled.

Under the terms of their plea agreements, Shah and Andrews were ordered to pay $324,739 to the Medicare program in restitution and will be required under federal law to serve at least 85 percent of their sentences. They will be on probation for three years after their release.

Syed is scheduled to be sentenced on March 12, 2021 and faces up to five years in prison and a fine of up to $250,000 for conspiracy to violate the Anti-Kickback Statute. His wife, Begum, entered into a pretrial diversion agreement where she admitted her role in the crime and agreed to 12 months probation, community service, and to pay restitution of $325,739 with Shah and Andrews.

The investigation was conducted by the FBI and the US Department of Health and Human Services, Office of Inspector General.