DALLAS – A federal jury convicted a Texas laboratory owner and former professional football player on Thursday for orchestrating a massive scheme that defrauded Medicare out of millions through unnecessary genetic testing, the Justice Department announced.
Keith J. Gray, 39, of McKinney, Texas, was found guilty of conspiracy, health care kickback violations, and money laundering following a trial in the U.S. District Court for the Northern District of Texas. Prosecutors said Gray’s scheme caused Medicare to be billed approximately $328 million, with the program ultimately paying out around $54 million on false claims.
Gray, who played in the NFL as a defensive back for the Jacksonville Jaguars and Seattle Seahawks, owned and operated two clinical laboratories: Axis Professional Labs LLC and Kingdom Health Laboratory LLC. According to court documents and trial evidence, Gray orchestrated a kickback scheme to bill Medicare for medically unnecessary cardiovascular genetic tests.
The scheme involved paying marketers to refer Medicare beneficiaries’ DNA samples and personal information, including Medicare numbers. These marketers then used other companies to telemarket to beneficiaries and engage in what investigators called “doctor chase” – pressuring primary care physicians to approve genetic testing orders for patients who had been “qualified” for the tests through scripted telephone calls by non-medical personnel, not by their actual doctors.
To conceal the kickback payments, Gray used sham contracts and invoices that purported to charge for marketing hours but were actually reverse-engineered to match illegal per-sample kickback amounts. Prosecutors said Gray also disguised payments by referring to them as being for “software” and non-existent loans.
Text messages introduced at trial showed Gray and a co-conspirator celebrating their illicit gains. According to the evidence, Gray’s co-conspirator wrote: “$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.”
Gray laundered some of the proceeds to purchase luxury vehicles, including a Dodge Ram truck worth more than $142,000 and a Mercedes-Benz SUV worth more than $145,000, according to the evidence.
The jury convicted Gray of one count 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. Each count carries a maximum penalty of 10 years in prison. A federal district court judge will determine the sentence at a later date, considering U.S. Sentencing Guidelines and other statutory factors.
“Mr. Gray abused his position as a laboratory owner and his access to vulnerable Medicare beneficiaries to line his own pockets with millions of dollars intended for legitimate health care,” Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division said in a statement. “This conviction demonstrates our commitment to holding accountable those who seek to exploit federal health care programs for personal gain.”
