Harold "Al" Knowles, the owner of two Houston-area laboratories, has been sentenced to 13 years in federal prison and ordered to pay $229 million in restitution after prosecutors said he ran a sprawling Medicare fraud operation that pushed unnecessary genetic tests on beneficiaries. According to court filings, the scheme leaned on deceptive telemarketing and brief telemedicine encounters to harvest DNA samples and signed testing orders.
Sentence and restitution
Knowles was sentenced on Monday, according to FBI Houston. The post said the judge imposed 13 years behind bars and ordered $229,000,000 in restitution.
What prosecutors allege
Federal court documents in the Southern District of Texas say Knowles owned Bio Choice Laboratories and Bios Scientific and that his companies submitted roughly $359 million in genetic-test claims, with Medicare paying about $227 million on those claims, according to the U.S. Department of Justice. Prosecutors allege Knowles concealed kickbacks through sham flat-fee contracts and paid marketers and telemedicine providers to obtain DNA samples and signed orders for testing.
Plea and timeline
Prosecutors say the conduct ran from 2019 into early 2022 and that Knowles pleaded guilty in July 2024 to conspiracy to commit health care fraud and related conspiracy counts, according to the Justice Department’s Fraud Section review. His plea was part of a broader enforcement sweep targeting telemarketing-driven genetic-testing schemes.
Who investigated
The case was investigated by a multiagency team that included FBI Houston, the Department of Health and Human Services’ Office of Inspector General and the Texas Medicaid Fraud Control Unit, as reported by the U.S. Attorney’s Office for the Southern District of Texas. Those partners have pursued similar telemarketing-driven genetic-testing cases as part of the Justice Department’s broader enforcement push.
Why it matters
Federal prosecutors have been prioritizing schemes that exploit telemarketing and telemedicine to bill Medicare for high-priced genetic tests that are rarely used in patient care, and judges have issued stiff penalties in several recent cases. The Knowles sentence fits that pattern, which has produced multi-million dollar recoveries and prison terms, according to reporting from Texas Lawbook.
Legal fallout
In addition to the prison term, court papers seek forfeiture and allow for money-judgment remedies to claw back proceeds of the scheme, leaving Knowles on the hook for restitution and possible asset seizures under federal forfeiture law. The indictment warned that if fraud proceeds cannot be found, the government may pursue substitute assets up to the money judgment amount, according to the U.S. Department of Justice.
