NEW YORK — The US Attorney’s Office for the Middle District of Tennessee said Friday that a jury found a Tennessee laboratory owner and a Utah marketing firm owner guilty of violations of the Anti-Kickback Statute stemming from a multimillion-dollar lab fraud scheme.
Fadel Alshalabi, owner and CEO of Spring Hill, Tennessee-based clinical lab company Crestar Labs, and Samuel Harris, owner of Utah-based marketing firm Flojo Recruiting, conspired to bill Medicare and Medicaid for millions of dollars in genetic test orders.
According to the government, Alshalabi and co-conspirators paid marketers including Flojo Recruiting, in exchange for laboratory genetic test orders. The marketers obtained these orders through various schemes including by targeting and recruiting elderly and low-income patients who were federal healthcare program beneficiaries in order to obtain their genetic material for conducting genetic tests. They obtained buccal swabs of DNA from patients at senior health fairs and through door-to-door marketing in low-income housing and elsewhere. The tests were approved by purported telemedicine doctors who were paid kickbacks in exchange for signing off on the laboratory orders sent to Crestar Labs.
Over the course of the scheme, Alshalabi and his co-conspirators billed Medicare and Medicaid more than $100 million for lab tests procured in this way.
Alshalabi was charged in 2021 with orchestrating the scheme. In 2022, a federal grand jury in Nashville indicted eight people including Alshalabi and Harris in a 40-count second superseding indictment on charges including healthcare fraud, conspiracy to commit healthcare fraud, and conspiracy to violate and violations of the Anti-Kickback Statute. The other six defendants pled guilty before trial.
Alshalabi was also convicted of money laundering.
Alshalabi and Harris will be sentenced on March 5 and 6, 2025. They each face up to 10 years in prison on the counts of violating the Anti-Kickback Statute and up to five years in prison on conspiracy to violate the Anti-Kickback Statute. Alshalabi also faces up to 10 years in prison on the money laundering counts. The defendants were acquitted on separate counts of healthcare fraud.