Florida Lab to Pay $9.8 Million to Settle Kickback Allegations Over Below-Market Consulting Services
NeoGenomics self-disclosed scheme involving discounted lab services and variable payments to consultants who identified referring providers
FLORIDA — NeoGenomics Laboratories Inc., a Florida-based clinical laboratory, has agreed to pay $9,813,260 to resolve allegations that it violated the False Claims Act by providing below fair market value consulting services to health care providers in exchange for patient referrals, the Justice Department announced today.
The government alleged that through its Laboratory Clinical Initiative program, NeoGenomics provided laboratory consulting services to 28 health care providers seeking to establish in-house diagnostic capabilities for flow cytometry and Fluorescence In-Situ Hybridization testing. Prosecutors contended that the company offered certain services for less than fair market value to induce referrals of clinical laboratory tests to NeoGenomics, violating the Anti-Kickback Statute and resulting in claims that violated the Stark Law.
Prosecution further alleged that NeoGenomics entered into agreements with independent consultants that involved payments in exchange for identifying potential health care provider customers. Those payments allegedly varied in part based on the volume or value of referrals to NeoGenomics from those customers.
“Federal law prohibits paying remuneration to induce referrals of federal health care services, including by offering services at below fair market value,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “We encourage companies to self-disclose improper remuneration and cooperate with our investigations in order to mitigate the consequences of prior conduct.”
The company self-disclosed the conduct to the United States and cooperated with the investigation, according to the settlement agreement. NeoGenomics also took remedial measures, including ending the consulting agreements, terminating responsible employees, and providing thorough documentation to assist the investigation.
“Providing services below fair market value to drive referrals — as alleged here — undermines independent medical judgment,” said Acting Deputy Inspector General for Investigations Miranda L. Bennett of HHS-OIG. “The Self-Disclosure Protocol remains an important tool for bringing potential violations to light and ensuring they are addressed appropriately.”
The claims resolved by the settlement are allegations only, and there has been no determination of liability
New Mexico Woman Pleads Guilty to $4 Million Medicaid Fraud Scheme Involving Fake Medical Transport Trips
Dorothea Irving admitted to submitting false claims for trips that never occurred, including using her children as purported beneficiaries
ALBUQUERQUE, N.M. — A New Mexico woman pleaded guilty today to participating in a multi-year scheme that defrauded the state’s Medicaid program out of more than $4 million by submitting false claims for non-emergency medical transportation that never occurred, federal prosecutors announced.
Dorothea Irving, 47, of Farmington, worked as a driver between 2020 and 2026 for a company that provided non-emergency medical transportation services. The New Mexico Medicaid program covers transportation costs for recipients who lack access to personal vehicles or public transportation to attend routine medical appointments.
Instead of driving Medicaid beneficiaries to their appointments, Irving and the company engaged in a scheme to submit fraudulent claims for purported transportation provided to Irving and her children, according to court documents.
Together with the company, its owner, and other employees and drivers, Irving submitted false trip records claiming that she or her children were the Medicaid beneficiaries without transportation, claiming trips that had not occurred, and claiming to have been an attendant for her children on their own trips. Irving and other drivers also signed trip forms falsely representing to have driven each other to appointments to disguise the fact that they were driving themselves.
In many instances, the fraudulent trips involved Irving, another driver, or minor children purportedly traveling to Alcoholics Anonymous meetings across New Mexico at great distances, authorities said.
The company used the false trip records to submit millions of dollars in fraudulent claims to New Mexico Medicaid, including false claims that each passenger in the vehicle had taken a separate trip. For trips where Irving and her children were listed as the supposed Medicaid recipients without transportation, the company submitted fraudulent claims of approximately $3,957,788 and received approximately $4,142,942 from Medicaid.
Irving herself received approximately $980,901 from the company over four years of the scheme.
Irving pleaded guilty to conspiracy to commit health care fraud and faces a maximum penalty of 10 years in prison. A sentencing date has not been set, and a federal district court judge will determine the final sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Brooklyn Daycare Owner Begins 57-Month Prison Sentence for $3.2 Million Medicaid Kickback Scheme
Eric Zhu paid cash bribes to Medicaid recipients for enrollment, then billed for services never provided
BROOKLYN, N.Y. — A Brooklyn man surrendered to federal authorities today to begin serving a 57-month prison sentence for orchestrating a $3.2 million Medicaid fraud and illegal kickback scheme at his social adult daycare center, prosecutors announced.
Eric Zhu, 29, of Brooklyn, owned Prime Life Adult Day Care LLC. From approximately 2020 through 2025, Medicaid recipients were paid illegal cash kickbacks and bribes in exchange for enrolling with Prime Life, according to court documents.
During that period, Prime Life fraudulently billed Medicaid approximately $3.2 million for social adult daycare services that these recipients never received. Medicaid paid out roughly $3.2 million based on these false and fraudulent claims.
Zhu used multiple business entities to launder the fraud proceeds and generate the cash used to pay kickbacks and bribes to the Medicaid recipients. Some of the cash was recovered during a search of Prime Life.
In addition to the prison term, Zhu was ordered to pay nearly $3.2 million in restitution and to forfeit $1.5 million in fraud proceeds.
“Eric Zhu exploited vulnerable Medicaid recipients by paying them illegal cash bribes to enroll in his adult day care program, then fraudulently billed Medicaid $3.2 million for services that were never actually provided,” said Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division. “This scheme stole millions from American taxpayers and undermined a program meant to help those in need. Today’s surrender to federal authorities shows we are holding Zhu and other fraudsters like him accountable. The Department of Justice will continue to vigorously prosecute individuals who defraud public health programs.”
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