Pennsylvania Man Admits Role in $4.6 Million Kickback Scheme Related to Genetic Testing

Jeremy Richey, 40, of Mars, Pennsylvania, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to a superseding information charging him with conspiracy to commit an offense against the United States in connection with a scheme to violate the Anti-Kickback Statute. Richey and five co-defendants were previously charged by indictment in September 2019 in connection with the conspiracy and a related health care fraud scheme.

According to documents filed in this case and statements made in court:

Richey and certain conspirators operated Ark Laboratory Network LLC (Ark), a company that purported to operate a network of laboratories that facilitated genetic testing. Through Ark, Richey and others submitted or caused to be submitted referrals for genetic tests and patients’ DNA samples to various clinical laboratories across the country. Richey and certain conspirators entered into kickback agreements with certain clinical laboratories under which the laboratories paid Ark bribes in exchange for delivering DNA samples and orders for genetic tests. Ark concealed these kickback arrangements through issuing sham invoices to laboratories that purportedly reflected services provided at an hourly rate even though the parties had already agreed upon the bribe amount, which was based on the revenue the laboratories received from Medicare or an amount paid for each DNA sample. From January 2018 through January 2019, Medicare paid these laboratories at least approximately $4.6 million for genetic tests that resulted from the referrals and DNA samples that Ark delivered to the laboratories in exchange for bribes. In turn, the laboratories paid Ark at least $1.8 million in bribes.

The charge to which Richey pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense. Richey’s sentencing is scheduled for Aug. 9, 2021.

Co-defendants Kacey C. Plaisance, of Altamonte Springs, Florida; Kyle D. McLean, of Arlington Heights, Illinois; and Edward B. Kostishion, of Lakeland, Florida, previously pleaded guilty. Plaisance is scheduled to be sentenced on June 21, 2021. McLean is scheduled to be sentenced on July 26, 2021. Kostishion is scheduled to be sentenced on July 26, 2021.

Acting U.S. Attorney Honig credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Supervisory Special Agent Thomas J. Mahoney, with the investigation leading to today’s guilty plea.

The government is represented by Bernard J. Cooney, Chief of the Government Fraud Unit, and Assistant U.S. Attorney José R. Almonte of the Health Care Fraud Unit in Newark.

The charge and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.