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Calloway Laboratories to Pay Over $7.71 Million to Resolve False Claims Act Allegations
April 3, 2012

Boston...The United States Attorney for the District of Massachusetts announced today that Calloway Laboratories, Inc. (“Calloway Labs”), a clinical toxicological laboratory headquartered in Woburn, paid over $7.71 million to resolve civil claims related to its urine drug testing services.

The United States alleges as follows: In order to induce doctors and sober homes to use Calloway Labs’ services, Calloway Labs paid kickbacks in the form of improper commercial lease payments and other checks. Calloway Labs also falsified a health care provider’s signature on requisition forms in order to receive payment from federal health care payors for medically unnecessary urine drug tests.

The United States alleges that this conduct violates the federal False Claims Act. Subsequent to a federal investigation, Calloway paid $7.71 million to resolve the government’s civil claims, pursuant to a settlement agreement with the United States. Calloway has not admitted liability or wrongdoing in connection with the settlement.

As an additional part of the settlement, Calloway has also entered into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. That agreement provides for procedures and reviews to be put in place to prevent or promptly detect similar misconduct in the future.

United States Attorney Carmen M. Ortiz and Susan J. Waddell, Special Agent in Charge of Health and Human Services, Office of Inspector General made the announcement. The civil investigation and settlement were handled by Assistant U.S. Attorneys Sonya A. Rao and Amanda P. M. Strachan. The Corporate Integrity Agreement was negotiated by the Office of Inspector General of the Department of Health and Human Services.


 

 

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