The owners of two clinical laboratories in Texas and Mississippi today admitted their roles in a scheme to pay kickbacks in exchange for referrals of patient DNA samples and genetic tests to the laboratories, U.S. Attorney Craig Carpenito announced.
Sherman Kennerson, 55, of Plano, Texas, and Jeffrey Madison, 54, of DeSoto, Texas, each pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to one count of conspiracy to defraud the United States in connection with a scheme to violate the Anti-Kickback Statute.
According to documents filed in this case and a related matter and statements made in court:
Kennerson and Madison co-owned and operated with other individuals Spectrum Diagnostic Labs LLC (Spectrum Lab) and Metric Lab Services LLC (Metric Lab), two clinical laboratories, located in Texas and Mississippi, respectively, that performed genetic tests and submitted claims to Medicare. Kennerson and Madison oversaw the laboratories’ marketing and sales operations through which outside marketing groups recruited physicians to refer patients’ DNA samples to the laboratories for genetic tests and related services.
Kennerson and Madison paid bribes to Ark Laboratory Network LLC (Ark), one the marketing groups for Spectrum Lab and Metric Lab, and Jeffrey Tamulski, to induce Ark to refer patients’ DNA samples to the laboratories. Tamulski and the owners of Ark, Edward B. Kostishion, Jeremy M. Richey, and Kacey C. Plaisance, were previously charged by indictment in September 2019 in connection with a related kickback conspiracy involving referrals to laboratories for genetic testing. Plaisance pleaded guilty to his role in the conspiracy on May 6, 2020.
As part of the scheme, the laboratories entered into sham agreements with Ark and Tamulski under which Ark purported to provide various consulting, marketing, and other services at an hourly rate. Kennerson and Madison, however, paid Ark and Tamulski in exchange for referrals and DNA samples based on a percentage of the revenue the laboratories received from federal health care programs, including Medicare. Once the amount of the bribe was calculated, Ark and Tamulski drafted and submitted sham invoices to the laboratories that backed into the agreed upon bribe amount and attempted to conceal the scheme through describing various services provided at hourly rates. Metric Lab paid Ark over $136,000 in bribes and the laboratories received over $517,000 in payments from Medicare for claims connected to the kickback scheme with Ark and Tamulski.
The conspiracy charge to which Kennerson and Madison each pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense, whichever is greatest. Sentencing for both defendants is scheduled for Oct. 5, 2020.
U.S. Attorney Carpenito credited the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, with the investigation leading to today’s guilty pleas.
Source: Department of Justice