Federal Genetic Testing Fraud Prosecutions
You ran a genetic testing lab. Or you worked at one. Maybe you marketed CGx tests to Medicare beneficiaries. Or you were a telemedicine physician signing orders for cancer genetic testing - patients you never met, never examined, often never spoke to. The Department of Justice has a name for you now.
Defendant.
The federal government has turned genetic testing fraud prosecution into an assembly line. Operation Double Helix charged 35 defendants for $2.1 billion in fraudulent claims. The 2025 National Healthcare Fraud Takedown added 49 more defendants for another $1.17 billion in genetic testing schemes alone. Lab owners are getting 27-year sentences - effectively life in prison. Marketers who recruited patients at grocery stores are getting years behind bars. And the telemedicine doctors who "robo-signed" orders without ever examining patients? They're facing conspiracy charges alongside everyone else in the chain.
Welcome to Spodek Law Group. We handle federal healthcare fraud defense, including genetic testing fraud prosecutions. If you're under investigation, if federal agents have contacted you or your employees, if you've received a subpoena or a Civil Investigative Demand - this article explains exactly what your facing and what options might exist.
The Machine That Turns Labs Into Prisons
In September 2019, the Department of Justice announced Operation Double Helix. Thirty-five defendants charged. Five federal districts coordinated. Dozens of telemedicine companies and cancer genetic testing laboratories targeted. Total alleged fraud: $2.1 billion.
That was just the begining.
The 2025 National Healthcare Fraud Takedown charged 324 defendants total - and 49 of them were specificaly for telemedicine and genetic testing schemes. Another $1.17 billion in fraudulent claims. The DOJ isn't slowing down. There accelerating.
What triggered this enforcement wave? The numbers tell the story. According to HHS-OIG, Medicare payments for genetic tests quadrupled between 2016 and 2019. From $351 million to $1.41 billion. A 302% increase. That kind of explosion dosent happen because more patients suddenly needed cancer genetic screening. It happens because someone figured out how to bill Medicare $6,000 to $12,000 for a cheek swab - and everyone wanted in.
Heres the paradox that defines these cases.
The patient got a "free" test. A recruiter approached them at a health fair, a senior center, a grocery store, a religious institution. No cost to you, they said. Just a quick swab. Medicare will cover it. And Medicare did cover it - at $6,000 to $25,000 per test. The patient thought they were getting free healthcare. Medicare was being billed for tests that, in most cases, were never medically neccesary.
Medical necessity was never the point. CGx testing - cancer genetic testing - is genuinley useful for specific patients with specific risk factors. Medicare covers it in limited circumstances. But in these schemes, medical necessity was irrelevant. Orders were generated for everyone. Test results were often never reviewed, never sent to treating physicians, never used to guide patient care. The tests existed to bill Medicare. Not to help patients.
Why Everyone in the Chain Gets Charged
This is were most people make a critical miscalculation.
"I just ran the lab." "I just did marketing." "I was just a telemedicine physician signing orders - I didnt know the details."
The DOJ dosent care about your role in the org chart. There charging everyone.
The chain looks like this:
- Patient recruiters approach Medicare beneficiaries at health fairs, senior centers, grocery stores, car dealerships, low-income housing areas
- Marketing companies run call centers - sometimes overseas - to solicit patients for "free" genetic testing
- Telemedicine physicians sign orders for tests without examining patients, often without even speaking to them
- Labs process the tests and bill Medicare at $6,000 to $25,000 per test
- Kickbacks flow back through the chain - per-sample payments, per-order fees, percentages of Medicare reimbursement
Everyone's compensation was tied to fraudulent billing. The recruiter got paid per sample delivered. The telehealth company got paid per order signed. The lab got paid when Medicare reimbursed. And kickbacks - disguised as "consultation fees" or "marketing expenses" - flowed backward through the system.
Look, the telemedicine documentation that was supposed to make healthcare more accessible? It made prosecution easier. Electronic records of every order. Every referral. Every payment. All discoverable. All documented. The paper trail that proves the scheme is sitting in your EHR system right now.
One genetic testing scheme triggers multiple federal charges:
- Anti-Kickback Statute (42 U.S.C. § 1320a-7b) - up to 10 years per count
- False Claims Act (31 U.S.C. § 3729) - treble damages plus penalties per false claim
- Wire Fraud (18 U.S.C. § 1343) - up to 20 years
- Health Care Fraud (18 U.S.C. § 1347) - up to 10 years, or 20 if serious injury
- Money Laundering (18 U.S.C. § 1956) - up to 20 years
- Conspiracy - ties everyone together regardless of there specific role
There is no "small player" exception. Robert Desselle recruited Medicare beneficiaries at grocery stores. He got 57 months. The recruiter approaching seniors at health fairs faces prosecution alongside the lab owner who billed $463 million.
The Sentences There Actually Handing Out
Minal Patel owned LabSolutions LLC in Atlanta. From July 2016 through August 2019, his lab submitted more than $463 million in claims to Medicare. Thousands of medically unneccessary genetic tests. Kickbacks and bribes paid to get patient referrals.
His sentence: 27 years in federal prison.
Patel was also ordered to repay $187 million and forfeit his assets - including a 2018 Ferrari Spider, a 2019 Range Rover, and real property. He personaly pocketed $27 million from the scheme.
Twenty-seven years. Thats effectively a life sentence for many people.
Recent genetic testing fraud sentences from DOJ press releases:
- Minal Patel (Lab Owner, LabSolutions): 27 years, $187M restitution, forfeit Ferrari and Range Rover
- Daniel Hurt (Lab Owner, multiple entities): 10 years, $97M restitution, boat named "In My DNA" forfeited
- Robert Desselle (Marketer): 57 months - recruited patients at grocery stores, pharmacies, car dealerships
- Fadel Alshalabi (Lab Owner, Crestar Labs): 5 years - paid $12 million in illegal kickbacks
- Paul Wexler (Telemarketing Company): 4 years - caused Medicare to be billed $17.3 million
- Paul Bleignier (Telemarketing Company): 2 years - co-conspirator with Wexler
Lab owners getting effectively life sentences. Marketers getting years. Telemarketing operators getting prison time.
And its not just criminal charges. Civil False Claims Act settlements pile on top. Daniel Hurt agreed to $97 million in restitution. A $27 million settlement resolved FCA allegations against cancer genetic testing entities. UTC Laboratories settled for $42.6 million. The financial consequences can be catastrophic even before you get to the prison time.
What to Do If Your Under Investigation
The single most important rule:
Never agree to discuss a potential genetic testing fraud case with a federal agent without a lawyer present.
This sounds obvious. But people talk. They think cooperation will help. They think there innocent - so why not explain? Because every word becomes evidence. Because investigators are building a case, not looking for exculpatory information. Because a single misstatement can become an additional false statements charge under 18 U.S.C. § 1001.
Signs your under investigation:
- Federal subpoena for business records
- Employees contacted or interviewed by FBI, HHS-OIG, or other federal agents
- OIG inquiry letter requesting information about billing practices
- Civil Investigative Demand (CID) from DOJ
- News of indictments in your geographic area or involving companies you worked with
The DOJ launched "Operation Happy Clickers" - targeting telemedicine physicians who "robo-signed" genetic testing orders without proper patient evaluation. If you signed orders for CGx or PGx testing through a telemedicine platform, you are potentially exposed. Even if you thought you were following proper procedures. Even if you were told everything was compliant.
Todd Spodek has defended clients in federal healthcare fraud investigations, including genetic testing fraud prosecutions. He understands the difference between the investigation stage - where civil resolution might still be possible - and the indictment stage where criminal defense becomes the priority.
If your in the genetic testing industry and you're worried about exposure, Spodek Law Group can help you understand where you stand. Lab owner. Marketing company executive. Telemedicine physician. Patient recruiter. The consultation is free. Theres no obligation.
What you'll get is an honest assessment. Are you a target? A subject? A witness? What does the evidence look like? What are realistic outcomes - not best-case fantasies, but actual possibilities based on how the DOJ is prosecuting these cases right now?
Call us at 212-300-5196. The enforcement actions are accelerating. The sentences are getting longer. The earlier you have counsel, the more options exist.
Were here when you need us.
