Tennessee Genetic Testing Owner Sentenced for $129M Medicare Kickback Scheme

A genetic testing company owner in Middle Tennessee, Fadel Alshalabi, received a five-year prison sentence following his conviction in a federal kickback scheme. Alshalabi's company, Crestar Labs, which conducted operations in Tennessee, Texas, and Maryland, was found to have billed Medicare and Medicaid over $129 million for unauthorized lab tests.

The scheme involved marketing firms and a doctor who facilitated testing orders, primarily targeting elderly and low-income patients. Patients often did not receive test results, or adequate follow-up care, highlighting significant service delivery issues in fraudulent testing operations.

Alshalabi was convicted of money laundering and violating federal anti-kickback statutes, with restitution amounts pending determination. Other participants, including marketing firm owner Samuel Harris and doctor Benjamin Toh, received prison sentences for conspiracy and kickback violations.

The case underscores ongoing regulatory and compliance challenges within healthcare billing, particularly regarding fraud in government healthcare programs and the intersection of laboratory testing and telemedicine. These prosecutions reflect efforts by the U.S. Department of Justice to enforce anti-fraud measures and protect taxpayer-funded insurance programs from exploitative schemes.