Lab Owner, Marketing Company Owner, and Doctor All Sentenced in Multi-Million Dollar Medicare and Medicaid Kickback Conspiracy

NASHVILLE – Fadel Alshalabi, 57, of Waxhaw, North Carolina, Samuel Harris, 30, of American Fork, Utah, and Benjamin Toh, M.D., 71, of Chicago, Illinois, have each been sentenced after two separate trials for their roles in a multi-million, multi-state Medicare and Medicaid conspiracy to pay and receive illegal kickbacks, announced Robert E. McGuire, Acting United States Attorney for the Middle District of Tennessee.

Alshalabi was sentenced to five years in prison for conspiracy to violate the Anti-Kickback Statute, violations of the Anti-Kickback Statute, and money laundering. He was the owner and Chief Executive Officer of Crestar Labs, LLC (“Crestar Labs”), based in Spring Hill, Tennessee, which operated laboratories in Texas, Maryland, and Tennessee.

Harris was sentenced to two-and-a-half years in prison for conspiracy to violate the Anti-Kickback Statute and violations of the Anti-Kickback Statute. He was the owner of Flojo Recruiting d/b/a Secure Health, a Utah-based marketing company that contracted with Crestar Labs.

Toh was sentenced to 13 months in prison for conspiracy to violate the Anti-Kickback Statute. He was a doctor in Chicago who purported to see patients through “telemedicine” companies and signed orders for laboratory tests that Crestar Labs used to bill Medicare and Medicaid.

“Those involved in health care schemes, motivated by greed and designed entirely to bilk the American taxpayers, should face substantial sentences in prison,” said Acting United States Attorney Robert E. McGuire. “I congratulate the hard-working prosecutors and agents who devoted countless hours to hold these defendants accountable after lengthy trials. We will not be deterred from pursuing individuals like these defendants, who executed a national scheme that exploited the elderly and vulnerable and depleted taxpayer dollars.”

“Paying kickbacks for referrals for medical services involving federal healthcare programs is illegal and can cause the delivery of unnecessary medical services and put patients’ wellbeing and health at risk,” said Kelly Blackmon, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “These sentencings demonstrate the commitment of HHS-OIG and our law enforcement partners to hold those who exploit these programs accountable.”  

“Health care fraud impacts individuals, businesses, and the overall healthcare system,” said Special Agent in Charge Joseph E. Carrico of the FBI Nashville Field Office. “This sentencing demonstrates the tenacity of the FBI and our partners to pursue anyone who conspires to exploit Medicare and Medicaid for financial gain.”

According to the evidence presented at the two trials in this matter, Alshalabi, Harris, and their co-conspirators, including six other individuals who were charged and pled guilty in the same case, entered into sham contracts and paid illegal kickbacks in exchange for laboratory genetic tests. The marketing companies targeted and recruited elderly and low-income patients who were federal health care program beneficiaries at senior health fairs, through door-to-door marketing, and in low-income neighborhoods to obtain their genetic material for conducting genetic tests. The tests were then approved by purported telemedicine doctors, like Dr. Toh, who were paid kickbacks in exchange for signing off on the laboratory orders sent to Crestar Labs. Toh signed orders for hundreds of patients who he did not know and never contacted. He received $20 per order.

Alshalabi, through Crestar Labs and the other laboratories it operated, then billed Medicare and Medicaid for the tests, often claiming reimbursement of more than $10,000 per test. During the conspiracy, Alshalabi and his co-conspirators billed over $129 million for laboratory tests and were paid over $35 million. Of claims submitted to Medicare and Medicaid, over $6 million were based on samples obtained by Harris and over $9 million were based on orders signed by Dr. Toh. Once paid, Alshalabi paid kickbacks to the marketing companies in exchange for the referrals. Alshalabi, through Crestar Labs, paid over $12 million in illegal kickbacks and bribes.

The laboratory tests were run, but as patients testified at trial, many never received the test results at all. Those who did receive the results often did not understand them, and the doctors who ordered the tests, like Dr. Toh, never followed up with them.

In addition to the terms of imprisonment, Alshalabi was sentenced to a term of supervised release of three years, and Harris and Toh each received one year of supervised release. Restitution for Alshalabi and Harris will be determined at a later hearing. Dr. Toh was ordered to pay $495,000 in restitution.

Six co-defendants named in the same indictment charging Alshalabi and Harris previously pled guilty before trial. They were: 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 conspiracy to defraud the United States and violate the Anti-Kickback Statute and one count of conspiracy to commit health care fraud. They all face up to 10 years in federal 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.

Elizabeth H. Turner, of Glenview, Kentucky, the owner of Advanced Tele-Genetic Counseling, pled guilty to one count of conspiracy to defraud the United States and violate the Anti-Kickback Statute. She will be sentenced at a later date.

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.

United States v. Alshalabi and Harris is docketed at Case No. 3:21-cr-00171.

United States v. Benjamin Toh is docketed at Case No. 3:22-cr-00392.

Assistant U.S. Attorneys Sarah K. Bogni and Robert S. Levine prosecuted the cases.

# # # # #