$114M penalty issued in Medicare fraud case brought by whistleblowers. Exposing Misconduct.

$114M penalty issued in Medicare fraud case brought by whistleblowers

May 24, 2018

CHARLESTON, S.C.May 24, 2018 /PRNewswire/ — A federal judge in South Carolina issued an order of judgment on Wednesday that imposes civil damages and penalties totaling more than $114 million on the former CEO of a medical testing lab and to two owners of the lab’s marketing partner for violations of the False Claims Act. The defendants were found guilty of civil fraud against Medicare and other federally funded healthcare programs on January 31, 2018 by a jury sitting in Charleston, South Carolina. The verdict and Wednesday’s entry of judgment were the outcome of three separate “qui tam” (whistleblower) cases brought and litigated together – including one brought by Phillips & Cohen LLP on behalf of Dr. Michael Mayes of Hilton Head, SC. Dr. Mayes was the only whistleblower to testify in court.

Judge Richard Gergel ordered the defendants – Tonya Mallory, the former CEO of Health Diagnostic Laboratory (HDL) in Richmond, VA, and Floyd Calhoun Dent III and Robert Bradford Johnson, who are the owners of BlueWave Healthcare Consultants Inc. (BlueWave), an Alabama marketing company – to pay more than $111 million in treble damages and penalties for fraud relating to HDL’s arrangement with BlueWave to market HDL blood tests in part by offering illegal kickbacks to physicians who ordered the tests.
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