7 executives charged with defrauding Medicare/Medicaid of $40 million using Colorado labs
Seven executives of a genetic testing company were recently indicted by a federal grand jury in Denver of fraudulently receiving $40 million from state and federal healthcare systems.
The seven executives reside across the country. They used a pair of Colorado laboratories to do genetic testing which federal prosecutors say was unnecessary, improperly obtained and illegally billed.
A primary aspect of the scheme: Paying telemarketers to call elderly patients, all likely to be Medicare beneficiaries, to solicit or accept genetic tests "regardless of medical necessity and through false pretenses and representations," as stated in the indictment.
The seven are:
- Ronald King, 51, CEO of Tesis Labs LLC., formerly of Berlin, New Hampshire, and now residing in Bangor, Maine
- Victor Roiter, 55, Vice President of Marketing for Tesis Labs, resident of Sunny Isles Beach, Florida
- Tina Wellman, 51, Chief Operating Officer of Tesis Labs, of Mayfield, New York
- Adam Shorr, 55, beneficial owner of and business consultant for Tesis Labs, of Dunedin, Florida
- Robert O'Sullivan, 55, of Lake Sherwood, California
- John Gautereaux, 59, of Temecula, California
- Bradley Edson, 66, of Mesa, Arizona
Sullivan and Gautereaux partnered with the first four in ownership of another company, Autumn Partnership LLC, which was as a "proof of concept" for the Tesis business model, according to the indictment. Edson owned entities that were part of the Tesis LLC and is shown in communications between the defendants which are being used as evidence in the case.
According to the indictment, King, Roiter, Wellman, and Shorr conspired to defraud Medicare and Colorado Medicaid through several means, including by paying kickbacks and bribes to the marketing companies which acquired referrals for medically unnecessary genetic testing on its behalf. Patients were sometimes contacted directly via telehealth conference. The marketers also went so far as to "chase" primary care physicians for their signatures on testing order forms. Additionally, Tesis employees and its billing company based in India also "corrected" doctors' orders by adding or changing diagnosis codes, as asserted by prosecutors.
"These providers never examined the beneficiaries, typically spoke to each beneficiary for only a few minutes, relied on beneficiaries' self-reported medical information solicited by telemarketers, did not treat or diagnose the beneficiaries with any medical conditions, and did not intend to and did not use the genetic test results to treat or diagnose the beneficiaries. The tests were ordered primarily for the economic benefit of the co-conspirators and their associates," the indictment reads.
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A group including King and Wellman also established their own "call center" operation in New York "to make direct contact with the elderly to solicit their participation in genetic testing," as stated in the indictment.
Lastly, prosecutors claim King, Roiter, and Wellman conspired to launder the proceeds of the conspiracies through the accounts of "shell entities" that allowed the three to pay themselves personally from the funds within.
Tesis Labs LLC owned and operated Claro Scientific Laboratories, Inc. of Lafayette and 303 Diagnostics LLC based in Aurora. Claro was an independent clinical laboratory already enrolled with Medicare when Tesis acquired it in January 2020, per the indictment. Tesis acquired 303 Diagnostics in or around December 2020, when that facility was located in Denver and enrolled with Medicare. It moved to Aurora in October 2021.
Together, with a Texas laboratory named Alliance DX LLC, the three outfits made up the testing labs of Tesis Labs.
The parent company changed its name in 2021 to Tesis Biosciences.
The seven defendants made their initial appearances in Denver federal courtroom between August 26 and September 5. King is scheduled for trial in March 2025.