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, announced Thomas J. Jaworski, Acting United States Attorney for the Middle District of Tennessee. Alshalabi was also convicted of money laundering.

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. These defendants' criminal scheme to pay and receive kick-backs 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," said Acting U.S. Attorney Thomas J. Jaworski. "I commend our prosecutors and law enforcement partners for their dedication to pursuing justice and protecting our taxpayer funded programs from those who commit fraud for personal gain."

"These defendants disregarded the medical needs of patients and orchestrated a kickback scheme that undermined the integrity of federal health care programs," said Kelly J. Blackmon, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). "HHS-OIG and our law enforcement partners will continue to work tirelessly to hold individuals accountable for exploiting federal health care programs."

"Medicare and Medicaid Fraud Schemes threaten our health care system and our public safety," said Special Agent in Charge Joe Carrico of the FBI Nashville Field Office. "These guilty verdicts demonstrate that the FBI and our law enforcement partners will aggressively fight back to protect the integrity of our federal health care programs."

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. The defendants were acquitted on separate counts of health care fraud.

Six co-defendants previously pled guilty before trial, including Edward D. Klapp of Jupiter, Florida, the former Vice President of Sales for Crestar Labs; Melissa L. Chastain of Belton, South Carolina, the owner and Chief Executive Officer of Genetix LLC, a South Carolina marketing company that contracted with Crestar Labs; Roger Allison of Greenville, South Carolina, the President of Genetix; Dakota White of Easley, South Carolina, the former Director of Client Services and Vice President of Operations for Crestar Labs; Robert Alan Richardson of Silver Spring, Maryland, a principal of Maryland based Freedom Medical Labs, LLC, a marketing company that contracted with Crestar Labs; and Edward Burch of Rockville, Maryland, also a principal of Freedom Medical Labs, LLC. Each pled guilty to one count of violating the Anti-Kickback Statute and one count of conspiracy to commit health care fraud. They all face up to 10 years in prison on the conspiracy to commit health care fraud and up to 5 years on the conspiracy to violate the Anti-Kickback Statute. They will be sentenced at a later date to be set by the court.

Two other co-conspirators part of the same scheme were separately charged and convicted. Elizabeth H. Turner, of Glenview, Kentucky, the owner of Advanced Tele-Genetic Counseling, pled guilty to one count of conspiracy to offer, pay, solicit, and receive illegal kickbacks and to defraud the Medicare and Medicaid programs. She will be sentenced on January 6, 2025, and faces up to 5 years in prison. Dr. Benjamin Toh, of Chicago, Illinois, was convicted in September 2023, of conspiracy to violate the federal Anti-Kickback Statute after a two-week jury trial. He is scheduled to be sentenced on January 7, 2025 and faces up to 5 years in prison.

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and the Federal Bureau of Investigation, Nashville Field Office, with the assistance of state partners including the Tennessee Bureau of Investigation Medicaid Fraud Control Unit, and the Georgia Attorney General's Office, Georgia Medicaid Fraud Control Unit.

Assistant U.S. Attorneys Sarah K. Bogni and Robert S. Levine prosecuted the case. Assistant U.S. Attorney Michael C. Tackeff provided assistance.

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