Texas Scammer Gets 20 Years for Role in $50 Million Lab Test Ripoff

Case: The plot unfolded 10 years ago when a then 26-year-old woman and three co-conspirators set up 24 phony diagnostic testing centers in Houston. Offices were rented in 28 locations even though none of them actually saw any patients. To complete the charade, the offices were staffed with “seat warmers,” i.e., young women whose only job was to answer the phones and keep out auditors, and who actually sat around and watched streamed movies all day. Meanwhile, fake diagnostic testing technicians, nurses and doctors were employed to act as a “rubber stamp” so that $50 million in tests could be billed to Medicare, Medicaid and private insurers. Fake technicians even visited supposedly homebound patients to carry out sham tests billed to home health care programs.

Significance: Three of the four co-conspirators (charges were dropped against the third after he was found mentally incompetent to stand trial) were convicted on not only health fraud but also money laundering charges in connection with efforts to hide the true owners of the test clinics. The ringleader was sentenced to 20 years in jail and three years of supervised release and ordered to repay almost $15.3 million as restitution. The other two defendants are awaiting sentence.