NASHVILLE – A federal grand jury in Nashville on Monday returned a 40-count second superseding indictment, charging eight people in a Medicare and Medicaid fraud conspiracy, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.
The indictment was unsealed earlier today, following the arrests of five of those charged. Three others were arrested previously following earlier indictments.
Fadel Alshalabi, 54, of Waxhaw, North Carolina, was originally charged in July 2021, with conspiracy and violation of the Anti-Kickback Statute for his role in orchestrating a fraudulent Medicare and Medicaid billing scheme related to genetic testing. Alshalabi is the owner and Chief Executive Officer of a series of laboratories based in Spring Hill, Tennessee, called Crestar Labs, LLC (Crestar). Monday’s second superseding indictment charges Alshalabi and seven others with health care fraud, conspiracy to commit health care fraud, and conspiracy to violate and violations of the Anti-Kickback Statute. Alshalabi is also charged with money laundering.
Others charged in the second superseding indictment are Edward D. Klapp, 63, of Jupiter, Florida, the former Vice President of Sales for Crestar; Melissa L. Chastain, 57, of Belton, South Carolina, the owner and Chief Executive Officer of Genetix LLC, a marketing company that contracted with Crestar; Roger Allison, 64, of Greenville, South Carolina, the President of Genetix; Dakota White, 28, of Easley, South Carolina, the former Director of Client Services and Vice President of Operations for Crestar; Robert Alan Richardson, 53, of Silver Spring, Maryland, a principal of Freedom Medical Labs, LLC, a marketing company that contracted with Crestar; Edward Burch, 53 of Rockville, Maryland, also a principal of Freedom Medical Labs, LLC; and Samuel Harris, 27, of Salt Lake City, Utah, the owner of Secure Health, also a marketing company that contracted with Crestar. Edward Klapp and Lisa Chastain were originally charged in a first superseding indictment in October 2021.
The second superseding indictment alleges that the co-conspirators entered into sham contracts and paid kickbacks in exchange for genetic testing and urine analysis samples. This included targeting and recruiting elderly patients who were federal health care program beneficiaries in order to obtain their genetic material for conducting genetic tests. Marketers, who were not health care professionals, obtained swabs from the mouths of the patients at nursing homes, senior health fairs, and elsewhere. The tests were then purportedly approved by telemedicine doctors who did not engage in the treatment of the patients, and often did not even speak with the patients for whom they ordered tests. Frequently, the patients or their treating physicians never received the results of the tests. Alshalabi and the co-conspirators paid illegal kickbacks and bribes in exchange for the doctor’s orders and tests, without regard to medical necessity. During the period of 2016 to July 2021, Alshalabi and his co-conspirators billed Medicare and Medicaid over $150 million.
If convicted, Alshalabi faces up to 10 years on the money laundering charges, and all defendants face up to 10 years in prison on the health care fraud and Anti-Kickback Statute charges, and up to 5 years on the charge of conspiracy to violate the Anti-Kickback Statute.
This case is being investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and the FBI, with the assistance of state partners including the Georgia Attorney General’s Office, Georgia Medicaid Fraud Control Unit, and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit, as well as federal law enforcement partners and U.S. Attorney’s Offices in multiple districts, including in the Western District of North Carolina, Northern District of Georgia, District of South Carolina, and the Western District of Kentucky. Assistant U.S. Attorneys Sarah K. Bogni and Robert S. Levine are prosecuting the case.
An indictment is merely an accusation. The defendants are presumed innocent until proven guilty in a court of law.