A federal jury in Detroit convicted Sherif Khalil, a 50-year-old man from Redondo Beach, California, for his involvement in a fraud scheme that put Medicare out of over $4 million. The fraud stemmed from the submission of false claims for medically unnecessary urine drug testing for patients receiving pain management treatment, a practice that siphoned taxpayer dollars from the healthcare system.
Khalil, who operated Spectra Clinical Labs, a toxicology laboratory based in Gardena, California, was found guilty of conspiracy to commit health care fraud and wire fraud, as well as conspiracy to defraud the United States and to engage in illegal kickbacks. His conviction was the result of a meticulously constructed plan to exploit Medicare’s reimbursement system, targeting both the healthcare system and unknowing patients.
According to the evidence presented at trial, Khalil conspired with others to submit claims to Medicare for expensive urine drug testing panels that were neither needed nor ordered by the patients’ doctors. This scheme exploited the system’s reimbursement structure by targeting the highest-reimbursing tests that were medically unnecessary.
Khalil’s laboratory, Spectra Clinical Labs, paid marketers a percentage of Medicare reimbursements, incentivizing them to secure orders from doctors for costly drug testing panels. To conceal the illegal nature of the scheme, Khalil routed these payments through marketing companies he controlled, making the transactions appear legitimate.
These marketers, in turn, trained staff members at doctor’s offices to send orders for tests that doctors did not request or approve. These unnecessary tests were performed purely to increase Spectra’s profits and to ensure the marketers earned larger commissions. Importantly, Khalil was fully aware that the orders being sent to his lab lacked the necessary documentation to prove medical necessity. This criminal enterprise resulted in Medicare making over $4 million in payments to Spectra Clinical Labs for these unnecessary tests
Khalil was found guilty of two charges, Conspiracy to Commit Health Care Fraud and Wire Fraud and Conspiracy to Defraud the United States and to Pay, Offer, Receive, and Solicit Health Care Kickbacks. He faces a maximum of 20 years in prison for the health care fraud and wire fraud charge, and up to five years in prison for the kickback conspiracy charge. Khalil is scheduled to be sentenced on August 7, 2025.