Former NFL Player Turned Lab Owner Convicted in $328 Million Genetic Testing Fraud Scheme

By the Constantine Cannon Whistleblower Team 

In February, a federal jury in Texas convicted lab owner Keith J. Gray, a former NFL player, for his role in a $328 million genetic testing fraud scheme involving two clinical labs he owned and operated: Axis Professional Labs LLC (Axis) and Kingdom Health Laboratory LLC (Kingdom).[1] The jury found Gray guilty of (1) conspiracy to defraud the United States and to solicit or receive kickbacks and bribes; (2) five counts of offering and paying kickbacks and bribes; and (3) three counts of engaging in a monetary transaction in criminally derived property (money laundering).[2]

According to the DOJ’s press release announcing the conviction, Gray “orchestrated a scheme to bill Medicare for medically unnecessary genetic tests designed to evaluate the risk of various cardiovascular diseases and conditions,” and he “offered and paid kickbacks to marketers in exchange for their referral of Medicare beneficiaries’ DNA samples, personally identifiable information . . . [,] and signed test orders from medical providers authorizing the . . . tests.”[3]

The Alleged Scheme Involved Medicare Beneficiaries and Kickbacks

According to the DOJ, the scheme involved the use of marketers. The marketers engaged companies to contact Medicare beneficiaries and conduct a “doctor chase,” referring to a practice of identifying the beneficiaries’ doctors and pressuring them to approve testing orders. The DOJ further claimed that non-medical personnel at one of the companies—not the patients’ doctors—purportedly “qualified” the patients during phone calls for the genetic testing.[4]

The DOJ claimed that Gray tried to conceal the kickback payments by using “sham contracts and invoices that purported to charge for ‘marketing’ hours.” However, according to the DOJ, these were designed to match the agreed-upon amounts under the kickback arrangement. The DOJ also claimed that Gray tried to disguise the payments by referring to them as being for “‘software’ and loans that never existed.”[5]

How Much Was Billed to and Paid by Medicare?

Axis and Kingdom, clinical labs Gray owned and operated, submitted Medicare claims totaling about $328 million, and Medicare paid about $54 million. According to the DOJ, after receiving these payments, Gray “laundered some of the proceeds by purchasing luxury vehicles, including a Dodge Ram truck worth more than $142,000 and a Mercedes Benz SUV worth more than $145,000.”[6]

Text Messages as Evidence

Some of the evidence used at trial included text messages between Gray and his co-conspirator.  The co-conspirator wrote, “$ent, you should have it any minute if you don’t already. Get it?”  Gray replied, “Sorry I was filling my bathtub with ones. Yes lol.”[7]

What’s Next?

Last month, Gray filed a motion for judgment of acquittal. The government will file any additional briefing on that motion by March 5. If the conviction stands, a federal judge will sentence Gray. In its press release, the DOJ asserts that “Gray faces a maximum penalty of 10 years in prison on each count.”[8]

Were Whistleblowers Involved?

Constantine Cannon partner Dan Vitelli commented: “Although we don’t know whether a whistleblower played a role in this case, it nevertheless serves as an example of how information or evidence regarding healthcare fraud that is brought to the government’s attention can result in a serious enforcement action with serious consequences. Whistleblowers are often the ones to come forward and help stop healthcare fraud.”

Under the qui tam, or whistleblower provisions of the False Claims Act, private parties can bring lawsuits on behalf of the government against those that defraud the government, including for Medicare fraud or Medicaid fraud. Under these provisions, successful whistleblowers can receive up to 30% of the recovery.

Our Firm Helps Whistleblowers

If you have information involving healthcare fraud, violations of the Anti-Kickback Statute and False Claims Act, or money laundering/sanctions violations, please contact us and we will connect you with an experienced whistleblower attorney for a free and confidential consultation.

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Sources:

[1] https://www.justice.gov/opa/pr/former-nfl-player-and-laboratory-owner-convicted-328m-genetic-testing-fraud-scheme.

[2] Id.; United States v. Gray, No. 3:24-cr-250 (N.D. Tex.), ECF No. 125 (Jury Verdict).

[3] https://www.justice.gov/opa/pr/former-nfl-player-and-laboratory-owner-convicted-328m-genetic-testing-fraud-scheme.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

Tagged in: False Claims Act, Healthcare Fraud, Medicare,