Fadel Alshalabi, Samuel Harris, and Dr. Benjamin Toh have been sentenced for their involvement in a Medicare and Medicaid kickback scheme, according to Acting United States Attorney Robert E. McGuire for the Middle District of Tennessee. The three were found guilty after two separate trials.
Alshalabi, owner and CEO of Crestar Labs, LLC, received a five-year prison sentence for conspiracy to violate the Anti-Kickback Statute, violations of the statute itself, and money laundering. His company operated laboratories in Texas, Maryland, and Tennessee.
Harris was sentenced to two-and-a-half years for similar charges. He owned Flojo Recruiting d/b/a Secure Health, a Utah-based marketing firm that had contracts with Crestar Labs.
Dr. Toh was given a 13-month sentence for conspiracy to violate the Anti-Kickback Statute. Operating out of Chicago, he allegedly signed off on laboratory test orders through telemedicine companies without seeing patients.
"Those involved in health care schemes... should face substantial sentences in prison," stated McGuire. "We will not be deterred from pursuing individuals like these defendants."
Kelly Blackmon from the U.S. Department of Health and Human Services emphasized that paying kickbacks is illegal and risks patient health: "These sentencings demonstrate the commitment... to hold those who exploit these programs accountable."
Joseph E. Carrico from the FBI's Nashville Field Office noted that health care fraud affects many levels: "This sentencing demonstrates the tenacity... to pursue anyone who conspires to exploit Medicare and Medicaid for financial gain."
Evidence showed Alshalabi and Harris entered sham contracts with co-conspirators, including six others who pled guilty earlier. They paid illegal kickbacks for genetic tests targeting elderly and low-income patients at various venues.
Crestar Labs billed over $129 million during this conspiracy period but received more than $35 million from Medicare and Medicaid claims—$6 million based on samples obtained by Harris and over $9 million on orders signed by Dr. Toh.
In addition to imprisonment terms, Alshalabi will serve three years of supervised release; Harris and Toh will each serve one year. Restitution hearings are pending for Alshalabi and Harris; Dr. Toh must pay $495,000 in restitution.
Six other co-defendants previously pled guilty before trial: Edward D. Klapp (former VP of Sales at Crestar Labs), Melissa L. Chastain (CEO of Genetix LLC), Roger Allison (President of Genetix), Dakota White (former Director at Crestar Labs), Robert Alan Richardson (principal at Freedom Medical Labs), Edward Burch (also principal at Freedom Medical Labs). Each faces up to 10 years in federal prison for health care fraud conspiracy charges.
Elizabeth H. Turner from Kentucky also pled guilty relatedly; her sentencing is pending.
The case was investigated by several agencies including HHS-OIG, FBI Nashville Field Office, Tennessee Bureau of Investigation Medicaid Fraud Control Unit among others.
Case numbers are United States v. Alshalabi & Harris No.: 3:21-cr-00171; United States v Benjamin Toh No.: 3:22-cr-00392 prosecuted by Assistant U.S Attorneys Sarah K Bogni & Robert S Levine.
