On January 7, 2026, the Department of Justice announced that South Carolina clinical laboratory Labtech Diagnostics, and its founder and CEO had agreed to pay at least $6.8 million to resolve allegations that they violated the False Claims Act (FCA) and various other laws by paying illegal kickbacks to doctors. In addition to the civil settlement, the company agreed to plead guilty to five counts of violating the Anti-Kickback Statute (AKS), and will pay an additional $103,551 in criminal restitution.
According to the DOJ’s press release, Labtech and its owner/CEO paid physicians kickbacks in various forms in order to induce laboratory testing referrals, including payments disguised as office space rental, phlebotomy, and toxicology payments, as well as paying inflated amounts for laboratory equipment, and providing free services and supplies in connection with urine drug screening. The defendants allegedly entered into sham contracts and would sometimes hand deliver money orders to referring physicians.
The settlement was the result of a whistleblower lawsuit filed under the FCA’s qui tam provisions. The DOJ’s press release notes that the whistleblower will receive $1.36 million as part of the settlement.
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They attorneys at Chilivis Grubman represent healthcare providers in connection with government investigations and False Claims Act litigation. If you need assistance, contact us today.