Fadel Alshalabi, Medicare and Medicaid Fraud, Tennessee 2024

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Lab Owner and Marketing Company Owner Both Found Guilty in Multi-Million Dollar Medicare and Medicaid Fraud Scheme

NASHVILLE – After a seven-week trial, a jury yesterday found defendants Fadel Alshalabi, 57, of Waxhaw, North Carolina, and Samuel Harris, 30, of American Fork, Utah, guilty of conspiracy to violate and violations of the Anti-Kickback Statute, arising out of a multi-million dollar, multi-state Medicare and Medicaid fraud scheme.

Alshalabi was the owner and Chief Executive Officer of a series of laboratories based in Spring Hill, Tennessee, called Crestar Labs, LLC (“Crestar Labs”). Harris was the owner of Flojo Recruiting d/b/a Secure Health, a Utah-based marketing company that contracted with Crestar Labs.

According to the evidence presented at trial, the co-conspirators entered into sham contracts and paid illegal kickbacks in exchange for laboratory genetic tests. This included targeting and recruiting elderly and low-income patients who were federal health care program beneficiaries in order to obtain their genetic material for conducting genetic tests.

Marketers, who were not health care professionals, obtained buccal swabs of DNA from patients at senior health fairs, door-to-door marketing, low-income housing and elsewhere. The tests were then approved by purported telemedicine doctors who were paid kickbacks in exchange for signing off on the laboratory orders sent to Crestar Labs. Alshalabi and co-conspirators paid marketers kickbacks for the genetic testing samples and doctor orders.

During the conspiracy, Alshalabi and his co-conspirators billed Medicare and Medicaid over $100 million for laboratory tests procured through the payment of these illegal kickbacks. ‘Decisions to order health care items and services should not be coerced and influenced by the payment of illegal kickbacks,’ said Acting U.S. Attorney Thomas J. Jaworski. ‘These defendants’ criminal scheme to pay and receive kickbacks corrupts our country’s healthcare system and costs the taxpayers millions of dollars that should go to pay for legitimate health care services for the elderly and poor.’

Alshalabi and Harris will be sentenced on March 5 and 6, 2025. At sentencing, Alshalabi and Harris each face up to 10 years in prison on the counts of violating the Anti-Kickback Statute and up to 5 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.