Woburn lab accused of fraud
A Massachusetts clinical testing lab is accused of defrauding the state Medicaid program out of $10.6 million by using a kickback scheme to steer drug screening business to the company.
The state attorney general's office says a grand jury returned a 42-count indictment naming Calloway Laboratories of Woburn, its chief executive Arthur Levitan, and its chief operating officer Patrick Cavanaugh.
Prosecutors allege Calloway created two straw companies to funnel kickbacks to so-called sober houses to obtain urine drug screening business paid for by MassHealth.
Calloway said it plans a "vigorous defense" against the charges. A telephone listed to Levitan was disconnected. Cavanaugh did not immediately return a call for comment.
Two employees of New England Transitions, a group of sober houses, were also named in the indictment. The group declined comment.
