A federal jury in Dallas convicted a Texas laboratory owner and former NFL player yesterday for his role in a $328 million cardiovascular genetic testing fraud scheme.
According to court documents and evidence presented at trial, Keith J. Gray, 39, of McKinney, Texas, orchestrated a scheme to bill Medicare for medically unnecessary genetic tests designed to evaluate the risk of various cardiovascular diseases and conditions. Gray, the owner and operator of two clinical laboratories, Axis Professional Labs LLC (Axis), and Kingdom Health Laboratory LLC (Kingdom), offered and paid kickbacks to marketers in exchange for their referral of Medicare beneficiaries’ DNA samples, personally identifiable information (including Medicare numbers) and signed test orders from medical providers authorizing the medically unnecessary genetic tests. As part of the scheme, the marketers engaged other companies to solicit Medicare beneficiaries through telemarketing and to engage in “doctor chase,” i.e., to obtain the identity of beneficiaries’ primary care physicians and pressure them into approving genetic testing orders for patients who purportedly had already been “qualified” for the testing during telephone calls conducted by non-medical personnel at one of the companies retained by the marketers — not by their physicians.
In an effort to conceal the kickback payments, Gray used sham contracts and invoices that purported to charge for “marketing” hours but that in reality were reverse-engineered to match the amounts agreed to under the illegal per-sample kickback arrangement. Gray also sought to conceal the scheme by, among other things, referring to the payments as being for “software” and loans that never existed. Evidence at trial included text messages between Gray and his co-conspirator becoming giddy over the amount of money they were making from Medicare. For example, Gray’s co-conspirator stated, “$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, fraudulent and kickback-tainted genetic testing claims, of which Medicare paid approximately $54 million. Gray laundered some of the proceeds by purchasing expensive luxury vehicles, including a Dodge Ram truck worth more than $142,000 and a Mercedes Benz SUV worth more than $145,000.
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.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of eight strike forces operating in federal districts across the country, has charged more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
