A federal jury in Detroit convicted a California lab operator for his involvement in a $4 million fraud scheme that billed Medicare for unnecessary urine drug tests, the Justice Department reported on Tuesday. Sherif Khalil, 50, of Redondo Beach, was found guilty of submitting claims to Medicare for high-reimbursing urine drug testing panels that were neither wanted nor ordered by doctors, targeting patients receiving pain management treatment.
Khalil was the owner of Spectra Clinical Labs in Gardena, California, where he devised a scheme to line his pockets by paying marketers to secure doctors' orders for costly drug testing panels. These marketers got a share of Medicare reimbursements, a clear incentive to increase the number of tests billed. The jury heard how Khalil concealed these payments through marketing companies he secretly controlled, and as a result of the fraudulent orders, Medicare paid more than $4 million to Khalil’s lab. "Sherif Khalil operated Spectra Clinical Labs, a toxicology lab located in Gardena, California" according to court documents.
Justice Department's Criminal Division, Supervisory Official Antoinette T. Bacon, along with Special Agent in Charge Cheyvoryea Gibson of the FBI Detroit Field Office, and Special Agent in Charge Mario Pinto of the HHS-OIG, announced the conviction. The evidence presented at trial established that Khalil decidedly knew the tests his company was processing were not backed by medical necessity documentation.
On the counts of 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, Khalil could face a maximum of 20 years in prison for the first count and five years for the latter. His sentencing is scheduled for August 7. Trial Attorneys S. Babu Kaza, Jeffrey A. Crapko, Kelly Warner, and Assistant Chief Shankar Ramamurthy of the Criminal Division’s Fraud Section led the prosecution. "A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors," stated the Justice Department's announcement.
The case was investigated by both the FBI Detroit Field Office and HHS-OIG, which are part of ongoing efforts to combat health care fraud nationwide. More than 5,800 defendants have been charged since March 2007 as part of the Health Care Fraud Strike Force Program, which is indicative of a far-reaching government initiative to crack down on healthcare fraud, costing programs and private insurers upwards of $30 billion.
