SC Lab and CEO Ordered to Repay $6.8M Following Whistleblower’s Kickback Scheme Revelation

A South Carolina medical testing laboratory and its CEO have reached a settlement to repay over $6 million due to allegations of paying kickbacks to physicians in exchange for increased lab testing referrals. This settlement stems from a civil lawsuit initiated by a whistleblower.

Joseph Labash, a resident of the United Arab Emirates, has also agreed to plead guilty to five counts of paying kickbacks and will pay an additional $104,000 in restitution. He was the head of Clinical Laboratory LTD Holding, previously known as Labtech Diagnostics, located in Anderson, South Carolina, as per court documents and the U.S. Department of Justice.

While federal court records do not specify whether Labash will serve prison time, the Justice Department has indicated that the settlement addresses claims that Labash and Labtech knowingly disbursed five different types of kickbacks to doctors from 2018 to 2021. These payments were concealed as office space rental fees, phlebotomy and toxicology payments, and involved fraudulent claims to health insurance programs, according to the DOJ.

“In addition to paying kickbacks, Labtech also failed to accurately calibrate and perform quality controls on its testing equipment,” the lawsuit complaint states. “These labs then submitted claims to Medicare for reimbursement for the testing performed, to Medicaid, and to other federal health insurance programs.”

The whistleblower, who previously served as the chief operating officer at Labtech, is set to receive nearly $1.4 million from the settlement proceeds, as reported by the department. Prosecutors have already addressed allegations that healthcare providers in South Carolina, North Carolina, Texas, and Illinois received kickbacks to encourage their laboratory referrals to Labtech.

Additional individuals associated with the lab were also named in the original lawsuit. The amended complaint in this case can be viewed here.

Topics
South Carolina

A South Carolina medical testing laboratory and its CEO have reached a settlement to repay over $6 million due to allegations of paying kickbacks to physicians in exchange for increased lab testing referrals. This settlement stems from a civil lawsuit initiated by a whistleblower.

Joseph Labash, a resident of the United Arab Emirates, has also agreed to plead guilty to five counts of paying kickbacks and will pay an additional $104,000 in restitution. He was the head of Clinical Laboratory LTD Holding, previously known as Labtech Diagnostics, located in Anderson, South Carolina, as per court documents and the U.S. Department of Justice.

While federal court records do not specify whether Labash will serve prison time, the Justice Department has indicated that the settlement addresses claims that Labash and Labtech knowingly disbursed five different types of kickbacks to doctors from 2018 to 2021. These payments were concealed as office space rental fees, phlebotomy and toxicology payments, and involved fraudulent claims to health insurance programs, according to the DOJ.

“In addition to paying kickbacks, Labtech also failed to accurately calibrate and perform quality controls on its testing equipment,” the lawsuit complaint states. “These labs then submitted claims to Medicare for reimbursement for the testing performed, to Medicaid, and to other federal health insurance programs.”

The whistleblower, who previously served as the chief operating officer at Labtech, is set to receive nearly $1.4 million from the settlement proceeds, as reported by the department. Prosecutors have already addressed allegations that healthcare providers in South Carolina, North Carolina, Texas, and Illinois received kickbacks to encourage their laboratory referrals to Labtech.

Additional individuals associated with the lab were also named in the original lawsuit. The amended complaint in this case can be viewed here.

Topics
South Carolina