⏱ 2 min read
A Dallas laboratory, Magnolia Diagnostics, and its owners, John Bains and Kelly Bains, have agreed to pay $19.2 million to resolve allegations of COVID-19 testing fraud. The laboratory allegedly billed Medicare for medically unnecessary respiratory pathogen panel testing performed on seniors receiving COVID-19 tests in Dallas, Texas. The scam exploited vulnerable seniors, putting profits over people. The settlement also includes $4.8 million paid by Magnolia investors to resolve common law claims.
The allegations against Magnolia Diagnostics and its owners claim that they violated the False Claims Act, submitting false claims to Medicare for unnecessary testing. The U.S. Department of Justice and the U.S. Department of Health and Human Services Office of Inspector General investigated the case, which was handled by the U.S. Attorney’s Office for the Northern District of Texas.
U.S. Attorney Ryan Raybould stated that his office is committed to tackling healthcare fraud through both criminal prosecutions and civil investigations. The Assistant Attorney General, Brett A. Shumate, emphasized the Justice Department’s commitment to protecting taxpayer-funded programs and holding accountable those who exploit them.
The settlement is a significant step in recovering valuable healthcare dollars for the American taxpayer. It also serves as a warning to those who would exploit vulnerable Americans for profit, particularly during a pandemic.
📋 Key Facts
- Crime: Fraud & Financial Crimes
- Defendant: Texas
- Location: TX
- Source: DOJ Press Release
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