After a seven-week trial, a jury has convicted Fadel Alshalabi, 57, from Waxhaw, North Carolina, and Samuel Harris, 30, from American Fork, Utah, of conspiracy to violate the Anti-Kickback Statute in connection with a multi-million dollar Medicare and Medicaid fraud scheme. The announcement was made by Thomas J. Jaworski, Acting United States Attorney for the Middle District of Tennessee. Alshalabi, the owner and CEO of Crestar Labs, LLC, was also found guilty of money laundering. Harris owned Flojo Recruiting, a marketing company that worked with Crestar Labs.
Evidence presented during the trial revealed that the defendants engaged in fraudulent activities by paying illegal kickbacks for laboratory genetic tests. They targeted elderly and low-income patients, who were beneficiaries of federal health programs, to collect genetic material for testing. Non-medical marketers collected DNA samples from patients at various locations, such as senior health fairs and low-income housing. Telemedicine doctors, who received kickbacks, approved the orders for testing at Crestar Labs. During the scheme, over $100 million was billed to Medicare and Medicaid for tests acquired through these illegal kickbacks.
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Acting U.S. Attorney Jaworski criticized the scheme, highlighting its adverse impact on the healthcare system and the misuse of taxpayer money intended for legitimate services. Kelly J. Blackmon from HHS-OIG and Joe Carrico from the FBI emphasized their commitment to pursuing justice and protecting the integrity of federal healthcare programs.
Sentencing for Alshalabi and Harris is scheduled for March 5 and 6, 2025. They face up to 10 years in prison for violating the Anti-Kickback Statute and 5 years for conspiracy. Alshalabi also faces an additional 10 years for money laundering. Both defendants were acquitted of separate health care fraud charges.
Several co-defendants, including Edward D. Klapp, Melissa L. Chastain, Roger Allison, Dakota White, Robert Alan Richardson, and Edward Burch, have pleaded guilty to related charges and face similar penalties. Sentencing dates for these individuals will be determined by the court.
Two additional conspirators, Elizabeth H. Turner and Dr. Benjamin Toh, have also been convicted. Turner will be sentenced on January 6, 2025, and Toh on January 7, 2025, with both facing up to 5 years in prison.
The case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, the FBI Nashville Field Office, and state partners, with prosecution handled by Assistant U.S. Attorneys Sarah K. Bogni and Robert S. Levine, and assistance from Assistant U.S. Attorney Michael C. Tackeff.
For more information, please visit the U.S. Department of Justice website here.
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Jarrod Sanford Sentenced for Child Sex Crimes
Jarrod Sanford, 43, from Memphis, Tennessee, has been sentenced to 82 years in prison for his involvement in multiple child sex crimes, including production and possession of child pornography and committing a felony sex offense against a minor while registered as a sex offender. This is Sanford’s third conviction for sex crimes involving minors, and the sentencing was announced by Reagan Fondren, Acting United States Attorney for the Western District of Tennessee. The investigation was conducted by the FBI, the United States Probation Office for the Western District of Tennessee, and the Tipton County Sheriff’s Office.