A federal jury in Dallas convicted a Texas laboratory owner and former NFL player on Thursday for his role in a $328 million cardiovascular genetic testing fraud scheme.
According to court documents and evidence presented at trial, Keith J. Gray, 39, of McKinney, Texas, orchestrated a scheme to bill Medicare for medically unnecessary genetic tests designed to evaluate the risk of various cardiovascular diseases and conditions.
Gray, the owner and operator of two clinical laboratories, Axis Professional Labs LLC (Axis), and Kingdom Health Laboratory LLC (Kingdom), offered and paid kickbacks to marketers in exchange for their referral of Medicare beneficiaries’ DNA samples, personally identifiable information (including Medicare numbers) and signed test orders from medical providers authorising the medically unnecessary genetic tests.
As part of the scheme, the marketers engaged other companies to solicit Medicare beneficiaries through telemarketing and to engage in “doctor chase”, that is, to obtain the identity of beneficiaries’ primary care physicians and pressure them into approving genetic testing orders for patients who purportedly had already been “qualified” for the testing during telephone calls conducted by non-medical personnel at one of the companies retained by the marketers, not by their physicians.
In an effort to conceal the kickback payments, Gray used sham contracts and invoices that purported to charge for “marketing” hours, but that in reality were reverse-engineered to match the amounts agreed to under the illegal per-sample kickback arrangement.
Gray also sought to conceal the scheme by, among other things, referring to the payments as “software” and to loans that never existed. Evidence at trial included text messages between Gray and his co-conspirator, in which they grew giddy over the money they were making from Medicare.
For example, Gray’s co-conspirator stated, “$ent, you should have it any minute if you don’t already. Get it?” Gray responded, “Sorry, I was filling my bathtub with ones. Yes lol.”
Axis and Kingdom billed Medicare approximately $328 million for the false, fraudulent and kickback-tainted genetic testing claims, of which Medicare paid approximately $54 million.
Gray laundered some of the proceeds by purchasing expensive luxury vehicles, including a Dodge Ram truck worth more than $142,000 and a Mercedes Benz SUV worth more than $145,000.
The jury convicted Gray of conspiracy to defraud the United States and to pay and receive health care kickbacks, five counts of violating the Anti-Kickback Statute and three counts of money laundering. He is scheduled to be sentenced at a later date.
Gray faces a maximum penalty of 10 years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
