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$1.3 Million Judgment for Kickback Scheme
A federal court has ordered a Massachusetts-based clinical laboratory to pay $1,374,058 for committing healthcare fraud, specifically for submitting false claims to Medicare and TRICARE. The judgment, announced by the U.S. Attorney’s Office, was entered against Calloway Laboratories, Inc., a clinical laboratory based in Woburn, Massachusetts.
The case centers around allegations that Calloway submitted false claims for payment for urine drug testing referred by physicians to whom Calloway provided free testing supplies during the period May 2014 to November 2014. As part of the settlement agreement, Calloway acknowledged that it provided free testing supplies to physicians for the purpose of inducing or rewarding referrals of urine drug testing to Calloway.
The provision of free testing supplies to induce or reward referrals violates the Anti-Kickback Statute, a federal law that prohibits offering or providing anything of value to physicians to encourage the referral of services covered by federal healthcare programs. This conduct also violates the Stark Law, which prohibits a laboratory from billing Medicare for services referred by physicians with whom the laboratory has an improper financial relationship.
“Offering financial incentives to physicians in exchange for patient referrals undermines the integrity of our health care system,” said U.S. Attorney Robert M. Duncan, Jr. “Our office will continue to protect both patients and taxpayers by holding those who engage in kickback schemes accountable.”
The Government’s investigation began with the filing of a whistleblower lawsuit brought by a former Calloway employee under the qui tam provisions of the False Claims Act. Under the Act, private parties may bring suit on behalf of the government and may receive a portion of any federal recovery.
This matter was handled by the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service; and the U.S. Attorney’s Office for the Eastern District of Kentucky. The United States was represented by Assistant U.S. Attorneys Christine Corndorf and Carrie B. Pond.
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Key Facts
- State: Kentucky
- Category: Drug Trafficking|Fraud & Financial Crimes|White Collar Crime
- Source: DOJ Press Release â†â€â€
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