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Lab Owner Charged in Alleged $86M Medicare False Billing Scheme

NEW YORK – The US Attorney's Office for the Middle District of Tennessee announced on Tuesday that laboratory owner Fadel Alshalabi has been charged for allegedly orchestrating an $86 million false billing scheme.

According to a statement from the US Department of Justice, Alshalabi, the owner of Spring Hill, Tennessee-based Crestar Labs, is accused of paying illegal kickbacks in exchange for the solicitation of genetic tests for cancer from Medicare beneficiaries, beginning in 2016.

Alshalabi, who also owns labs in Maryland and Texas, allegedly contracted with marketing companies to target and recruit elderly patients in federal healthcare programs to gather their genetic material to conduct genetic tests.

The marketers swabbed patients' mouths at places like nursing homes and senior health fairs. Telemedicine doctors who did not treat the patients then approved the tests, while patients often didn't receive their results.

Between late 2017 and 2021, Crestar Labs allegedly billed Medicare approximately $86 million for genetic testing and received nearly $14 million for the claims, DOJ said.

If he's convicted, Alshalabi faces up to 10 years in prison.