U.S. agents raid genetic testing labs, charge 35 in Medicare fraud probe

By Sarah N. Lynch and Elijah Nouvelage

WASHINGTON/LAWRENCEVILLE, Ga. (Reuters) – U.S. federal agents raided genetic testing laboratories, and 35 people were criminally charged in four states in a crackdown on genetic testing fraud that officials said on Friday caused $2.1 billion in losses to federal healthcare insurance programs.

Officials at the Justice Department and Health and Human Services Department Office of the Inspector General said charges were filed in Florida, Texas, Louisiana and Georgia in “one of the largest healthcare fraud schemes ever charged.”

Among those facing charges was Khalid Satary of Suwanee, Georgia, owner of Clio Laboratories in Lawrenceville, Georgia, who was accused in an indictment of soliciting medically unnecessary genetic cancer tests and paying illegal bribes and kickbacks.

Satary is a convicted felon who previously also ran a toxicology lab that went bust in 2016 amid an ongoing federal probe into illegal kickbacks.

Several labs connected to Satary including Clio were featured in a special report by Reuters on Wednesday that raised questions about Clio’s Medicare billing practices and whether genetic tests the lab performed on elderly people were medically necessary.

A Reuters journalist early on Friday witnessed agents from the FBI and the U.S. Department of Health and Human Services inspector general’s office search Clio, Elite Medical Laboratories and medical billing company Laboratory Experts, which are all located in the same business complex.

All three of those companies are connected to Jordan Satary, the son of Khalid Satary. Neither father nor son could be reached for comment.

Victoria Nemerson, Clio’s general counsel, did not respond to requests for comment. Nemerson previously said Clio’s testing is proper and that the firm commits “substantial time and resources to meeting our legal duties.”

The use of genetic testing, which helps people determine their risks of developing cancer and other diseases, has skyrocketed in the United States since 2015.

For Medicare, the public insurance program for elderly and disabled Americans, payouts for genetic tests jumped from $480 million in 2015 to $1.1 billion in 2018, a Reuters analysis found.

Genetic testing has sparked more than 300 federal investigations involving healthcare fraud and illegal kickbacks.

The fraud schemes at issue in Friday’s announcement typically involved marketers’ hiring sales reps to get elderly people to provide a cheek swab that they are told could be tested to help them understand their risks of developing cancer or whether their genetics could unlock clues about how they will respond to drug treatments.

Doctors signed off on the tests as being medically necessary, and the swabs were sent for testing to labs that sought Medicare payments.

But many of the lab tests are not relevant to the patient’s history, and some of the doctors sign off on the results without conferring with the patient, investigators say.

By law, all diagnostic lab tests must be ordered by a doctor treating a patient for a specific condition.

Others charged included Minal Patel, the founder of Georgia-based LabSolutions, and Jamie Simmons, the founder of two telemedicine companies called MedSymphony and Meetmydocc LLC.

Lawyers for Patel and Simmons could not be immediately reached.

Patel is accused of defrauding the Medicare and Medicaid insurance programs in connection with genetic cancer tests and paying kickbacks. Simmons is charged with conspiring to commit healthcare fraud and paying and receiving kickbacks that led to Medicare billings of more than $56 million.

A Reuters analysis of Medicare Part B billing data showed that LabSolutions dramatically increased invoices for genetic testing from $292,303.56 in 2015 to $68.2 million in 2017.

The Justice Department said that in total, LabSolutions billed Medicare programs more than $494 million in connection with medically unnecessary cancer genetic tests.

Clio and several other labs controlled by Khalid Satary in Louisiana, Georgia and Oklahoma collectively billed Medicare more than $547 million for medically unnecessary tests, the government said Friday.

(Reporting by Elijah Nouvelage in Lawrenceville and Sarah N. Lynch in Washington; Additional reporting by M.B. Pell; Editing by Edmund Blair, Matthew Lewis and Cynthia Osterman)

Actress Lori Loughlin pleads not guilty in college admissions case

FILE PHOTO: Actor Lori Loughlin, and her husband, fashion designer Mossimo Giannulli, leave the federal courthouse after facing charges in a nationwide college admissions cheating scheme, in Boston, Massachusetts, U.S., April 3, 2019. REUTERS/Brian Snyder/File Photo

By Nate Raymond

BOSTON (Reuters) – Actress Lori Loughlin said on Monday she will plead not guilty to charges that she participated in what prosecutors say was the largest college admissions scandal uncovered in U.S. history.

Loughlin, who starred in the television sitcom, “Full House,” and her fashion designer husband Mossimo Giannulli filed papers in federal court in Boston seeking to waive their personal appearances at an arraignment hearing and have not guilty pleas entered on their behalf.

They are among 50 people accused of participating in a scheme that allowed wealthy parents to use cheating and bribes to help their children secure spots at universities like Yale, Georgetown and the University of Southern California (USC).

California college admissions adviser William “Rick” Singer has pleaded guilty to charges that he facilitated cheating on college entrance exams and bribed coaches at universities to falsely present the parents’ children as athletic recruits.

Loughlin, 54, and Giannulli agreed with Singer to pay $500,000 to have their two daughters named as recruits to USC’s crew team, prosecutors said, even though they did not row competitively, to help them gain admission.

The couple and several other parents were originally charged with conspiracy to commit mail and wire fraud. Prosecutors secured an indictment on April 9 that included an additional charge of conspiring to commit money laundering.

In all, 33 parents have been charged in the college admissions scandal. Of those, 14 have agreed to plead guilty, including “Desperate Housewives” TV star Felicity Huffman.

(Reporting by Nate Raymond in Boston; Editing by Jeffrey Benkoe)

‘El Chapo’ trial reveals drug lord’s love life, business dealings

Accused Mexican drug lord Joaquin "El Chapo" Guzman and his wife Emma Coronel Aispuro looks on in this courtroom sketch, during closing arguments at his trial in Brooklyn federal court in New York City, U.S., January 31, 2019. REUTERS/Jane Rosenberg

By Brendan Pierson and Daina Beth Solomon

(Reuters) – On a typical day, Mexican drug lord Joaquin “El Chapo” Guzman would wake at noon and make calls while strolling under the trees in the mountains of his native Sinaloa state, where he was in hiding, a witness recently testified at the kingpin’s trial.

The infamous gangster’s personal life and business dealings have gone on public display since mid-November at a courthouse in New York, where Guzman faces 10 criminal counts and a possible life sentence.

The jury will begin deliberations on Monday, after attorneys for the prosecution and defense gave closing statements this week.

U.S. prosecutors, who say Guzman amassed a $14 billion fortune through bribery, murder and drug smuggling, supported their case by calling to the stand Guzman’s former associates, including one who says she was his lover and another whose brother was among his top allies, as well as law enforcement officers.

“Do not let him escape responsibility,” Assistant U.S. Attorney Andrea Goldbarg told jurors on Wednesday, standing at a table displaying AK-47 rifles and bricks of cocaine as evidence.

Defense lawyers claim the 61-year-old Guzman, whose nickname means “Shorty,” was set up as a scapegoat. They attacked the credibility of witnesses, many of whom have extensive criminal histories.

Here are some of the most colorful tales from recent weeks in the courtroom:

HIS OWN WORDS

** Guzman’s voice was “sing-songy” with a “nasally undertone,” said FBI agent Steven Marston. In one recorded call, Guzman tells an associate, “Don’t be so harsh… take it easy with the police.” The partner responds: “You taught us to be a wolf.”

** Text messages between Guzman and his wife, Emma Coronel, often turned to family matters. “Our Kiki is fearless,” Guzman wrote in one, referring to one of their daughters. “I’m going to give her an AK-47 so she can hang with me.”

** After Coronel said she saw a suspicious car, Guzman wrote to her, “You go ahead and lead a normal life. That’s it.” Later he reminds her: “Make sure you delete everything after we’re done chatting.”

** In one of the trial’s final days, Guzman told the judge he would not testify in his own defense. The same day, he grinned broadly at audience member Alejandro Edda, the Mexican actor who plays Guzman in the Netflix television drama “Narcos.”

LOVERS AND BUSINESS

** Multiple “wives” visited Guzman when he was hiding in Sinaloa, said Alex Cifuentes, a former close partner.

** Lucero Sanchez Lopez, a former Mexican lawmaker, told jurors she once had a romantic relationship with Guzman, who sent her to buy and ship marijuana. “I didn’t want for him to mistrust me because I thought he could also hurt me,” she said. “I was confused about my own feelings over him. Sometimes I loved him and sometimes I didn’t.”

** Agustina Cabanillas, a partner of Guzman who called him “love,” set up drug deals by passing information between Guzman and others. In one message, Cabinillas called Guzman a “jerk” who was trying to spy on her. “Guess what? I’m smarter than him,” she wrote.

HIGH LEVELS OF CORRUPTION

** Guzman’s Sinaloa Cartel paid bribes, some in the millions of dollars, to Mexican officials at every level, said Jesus Zambada, the brother of Ismael “El Mayo” Zambada, who worked alongside El Chapo and is still at large.

** Beneficiaries included a high-ranking police official who fed Guzman information on police activities “every day,” said Miguel Angel Martinez, a former cartel manager.

** Guzman once paid $100 million to former President Enrique Pena Nieto, Cifuentes said. Pena Nieto has denied taking any bribes.

** When imprisoned in Mexico in 2016, Guzman bribed a national prison official $2 million to be transferred to a different facility, but the move was unsuccessful.

MURDER

** After a rival cartel member declined to shake Guzman’s hand, he ordered the man killed, fueling a war between the cartels, Zambada said.

** When assassins reporting to Guzman killed a police official who worked for a rival, Zambada said, they lured him out of his house by pretending they had hit his son with a car.

** Guzman ordered Cifuentes to kill the cartel’s communications expert after learning he was cooperating with the FBI. But Cifuentes said he was unable to carry out the hit because he did not know the man’s last name.

** When Damazo Lopez Nunez, a top lieutenant to Guzman, told his boss that a Mexican mayor wanted them to “remove” a troublesome police officer, Guzman told him they should do her the favor because the mayor was a favorite for an upcoming state election, Lopez testified. He said Guzman told him to make the killing look like revenge from a gang member.

** Lopez also said Guzman’s sons killed a prominent reporter in Sinaloa because he published an article about cartel infighting against their wishes.

** One of Guzman’s former bodyguards, Isaias Valdez Rios, said he watched his boss personally kill three rival cartel members. Guzman shot one of them and ordered his underlings to bury the man while he was gasping for air. On another occasion, Guzman tortured two men for hours before shooting them each in the head and ordering their bodies tossed into a flaming pit.

SAFE HOUSES AND ESCAPES

** For a period of Guzman’s time as a fugitive in Sinaloa, in northern Mexico, his posse lived in “humble pine huts” with tinted windows, satellite televisions and washer-dryers, Cifuentes said. About 50 guards formed three rings around the homes to keep watch.

** Guzman escaped into a tunnel hidden beneath a bathtub when U.S. agents raided one of his homes in 2014, said Sanchez, his lover. She followed Guzman, who was completely naked, into the passage, feeling water trickle down her legs. “It was very dark and I was very scared,” she said.

** Guzman’s wife helped her husband tunnel out of a Mexican prison in 2015 by passing messages to his associates, Lopez testified. She unsuccessfully tried to help him duplicate the escape when he was captured the next year.

(Reporting by Brendan Pierson in New York; Additional reporting and writing by Daina Beth Solomon in Mexico City; Editing by Tom Brown and Dan Grebler)

Insys founder ran bribe scheme to push opioid: U.S. prosecutor

John Kapoor, the billionaire founder of Insys Therapeutics Inc, arrives at the federal courthouse for the first day of the trial accusing Insys executives of a wide-ranging scheme to bribe doctors to prescribe an addictive opioid medication, in Boston, Massachusetts, U.S., January 28, 2019. REUTERS/Brian Snyder

By Nate Raymond

BOSTON (Reuters) – Insys Therapeutics Inc’s one-time billionaire founder directed a vast scheme to bribe doctors to prescribe an addictive fentanyl spray as opioid addiction was spiraling into a public health crisis, a U.S. prosecutor said on Monday.

John Kapoor, the company’s former chairman, and four colleagues are the first painkiller manufacturer executives to face trial over conduct authorities say contributed to the U.S. opioid epidemic, which officials said killed more than 47,000 people in 2017.

Kapoor, who was also Insys’ chief executive from 2015 to 2017, turned the company into a “criminal enterprise” that paid doctors millions of dollars to push its drug, Assistant U.S. Attorney David Lazarus told jurors in Boston federal court.

“John Kapoor and his co-defendants paid doctors to abandon their medical duties,” Lazarus said.

Kapoor, 75, and former Insys executives and managers Michael Gurry, Richard Simon, Sunrise Lee and Joseph Rowan have pleaded not guilty to racketeering conspiracy.

Defense lawyers will deliver their own opening statements later on Monday.

Kapoor’s 2017 arrest came the same day U.S. President Donald Trump declared the opioid crisis a public health emergency. In 2017, a record 47,600 people died of opioid-related overdoses, according to the U.S. Centers for Disease Control and Prevention.

Two top former executives – Michael Babich, Insys’ CEO from 2011 to 2015, and Alec Burlakoff, its ex-vice president of sales – have become government witnesses after pleading guilty to carrying out the scheme at Kapoor’s direction.

Lazarus told jurors that from 2012 to 2015, Kapoor and his co-defendants conspired to pay doctors bribes in exchange for prescribing Subsys, an under-the-tongue fentanyl spray approved only for use in managing severe pain in cancer patients.

Fentanyl is an opioid 100 times stronger than morphine.

Insys paid doctors as much as $275,000 in one case to participate in speaker programs ostensibly meant to educate medical professionals about Subsys but that were actually poorly attended sham events, Lazarus said.

The scheme led doctors to write medically unnecessary prescriptions for Subsys to patients, many of whom did not have cancer, Lazarus said.

He said Kapoor also participated in a scheme to defraud insurers into paying for the expensive drug.

Insys in August said it would pay at least $150 million to resolve a Justice Department probe related to its marketing of Subsys, and that it has taken steps to ensure it operates legally going forward.

(Reporting by Nate Raymond in Boston; Editing by Alexia Garamfalvi and Bill Berkrot)

U.N. urges Iran to stop executions of juveniles on death row

U.N. High Commissioner for Human Rights Zeid Ra'ad al-Hussein talks to reporters in Jakarta, Indonesia February 7, 2018. REUTERS/Beawihart

GENEVA (Reuters) – The top United Nations human rights official called on Iran on Friday to halt executions of young people convicted of carrying out crimes when they were under the age of 18.

In a “surge” in January, three people were executed for murders committed at 15 or 16, while some of the 80 juvenile offenders on death row are in danger of “imminent execution”, U.N. High Commissioner for Human Rights Zeid Ra’ad al-Hussein said.

“The execution of juvenile offenders is unequivocally prohibited under international law, regardless of the circumstances and nature of the crime committed,” Zeid said in a statement.

There was no immediate reaction from authorities in Iran, which has signed an international treaty strictly banning the execution of people who commit crimes under the age of 18.

In 2017, Iran is known to have executed five juvenile offenders, the U.N. statement said.

“I am sad to say that Iran violates this absolute prohibition under international human rights law far more often than any other state,” Zeid said, decrying the practice that has gone on for decades.

Among the latest criminals executed was Mahboubeh Mofidi, 20, who was convicted of killing her husband when she was 16, three years after their marriage, the statement said.

A fourth juvenile offender, believed to have been on the point of being executed on Wednesday, has reportedly received a temporary reprieve of two months, it said.

“There are appeal processes, but sometimes it’s rather opaque as to exactly what’s happening,” U.N. human rights spokesman Rupert Colville told a news briefing.

“Often you do get these kind of negotiations going on between the family of the convicted person and the family of the victim in murder cases,” he said, referring to “diyah” or blood money paid to halt an execution.

On Jan. 3, independent U.N. human rights experts called on Iran to spare the life of Amir Hossein Pourjafar, who was convicted of raping and killing a child when he was 15. He is among the three listed in Zeid’s statement as having been executed so far this year.

Zeid welcomed a bill passed in Oct. 2017 under which some drug offences previously punishable by the death penalty were now subject to a prison term, but said that the mandatory death sentence has been retained for a wide range of drug-related offences.

(Reporting by Stephanie Nebehay, editing by Larry King)

Police question Netanyahu for third time in criminal case

Benjamin Netanyahu

By Maayan Lubell

(Reuters) – Israeli police questioned Prime Minister Benjamin Netanyahu on Friday for the third time this month as part of a criminal investigation into abuse of office, Israeli media reported.

A police source confirmed the questioning took place but would not provide further details. A Reuters cameraman at Netanyahu’s official residence, where the questioning took place, said investigators were on the scene for three hours.

Police confirm they are questioning Netanyahu as a suspect in two criminal cases, one involving gifts given to him and his family by businessmen and the other related to conversations he held with an Israeli publisher. He has denied wrongdoing.

If charges are brought, political upheaval in Israel would be likely, with pressure on Netanyahu, 67, to step down after 11 years in office, spread over four terms.

The first case — referred to by police as Case 1,000 — involves Netanyahu and family members receiving gifts on a regular basis from two businessmen. Israeli media have reported that the gifts include cigars and champagne.

The second involves a deal Netanyahu allegedly discussed with the owner of one of Israel’s largest newspapers, Yedioth Ahronoth, for better coverage in return for curbs on competition from a free paper owned by U.S. casino mogul Sheldon Adelson.

Adelson is a supporter of the prime minister and his newspaper is staunchly pro-Netanyahu.

Israel Radio said Friday’s questioning mainly focused on the second case.

Addressing parliament on Wednesday, Netanyahu said there was nothing wrong with receiving gifts from close friends and that it was common for politicians to hold conversations with newspaper publishers. He accused opponents of trying to overthrow him.

“The goal is to pressure the attorney-general to press charges at any cost. There is no limit to the hounding, the persecution, the lies,” Netanyahu said.

In a research note published this week, Moody’s rating agency said the investigations into Netanyahu “are sufficiently serious that they could end his tenure as prime minister”.

“Should Netanyahu be forced to resign, it is likely that new elections would need to be held, since there is no clear successor in his Likud party.”

Under Israeli law, the prime minister is not obliged to resign even after he is charged, but he could be pressured into stepping down. Opponents are calling for him to do so.

Netanyahu is not the first Israeli leader to have faced criminal investigation: former prime minister Ehud Olmert was convicted of breach of trust and bribery in 2014 and Ariel Sharon was questioned while in office over allegations of bribery and campaign financing illegalities.

Israel Radio and Channel Ten television reported this week that police were investigating two more cases involving Netanyahu. Police did not confirm or deny the reports.

(Editing by Luke Baker and Dominic Evans)