Policy & oversight
Federal Government Sues Two Georgia Lab Executives for Using Church Health Fairs to Generate Unnecessary Medicare Tests
The Justice Department intervened on September 17 in a whistleblower lawsuit accusing the former leaders of Atlanta-based Capstone Diagnostics of running kickback schemes at religious gatherings and senior living communities, with prior related actions recovering 14.6 million dollars from the company and associates.
By the Goodsurance editorial teamSeptember 19, 2026
The Justice Department on September 17 said it joined a whistleblower lawsuit against Jay Johnson, former chief executive and chief operating officer of Capstone Diagnostics in Atlanta, and Austin Whiles, the company's former chief sales officer, along with affiliated entities and a third individual. The complaint describes two separate schemes.
In the first, Johnson and Whiles allegedly arranged for sales personnel to work church health fairs and religious conferences, paying kickbacks to event organizers for access to attendees. At those events, genetic tests were ordered under physicians' names without those physicians' knowledge or authorization, with signatures forged or otherwise misused.
Justice Department says Atlanta lab executives used church health fairs and senior living centers to bill Medicare for tests patients did not need.
In the second scheme, the defendants allegedly exploited community interest in COVID-19 testing at senior living facilities. Sales personnel placed orders for broader respiratory pathogen panels, which Medicare reimburses at higher rates, using falsified or blanket standing orders that treating physicians did not individually review or approve.
The government complaint also names a third individual, alleging that Johnson diverted millions of dollars through the scheme.
The current filing does not specify a total alleged fraud amount for the conduct charged against Johnson and Whiles. Related prior actions against the laboratory and associated parties already resulted in settlements: Capstone Diagnostics and a former owner, Drew Maloney, paid 14.3 million dollars, and billing company VitalAxis paid an additional 300,479 dollars.
The Justice Department said the case is part of broader enforcement efforts to stop fraud that exploits trust in community and faith-based settings to generate Medicare claims.
In plain words
The U.S. government is suing two men who used to run a lab company in Atlanta called Capstone Diagnostics. The government says they cheated Medicare.
The men are accused of setting up booths at church health fairs. They paid church event organizers to let them in. Then they ordered medical tests for people without getting real doctor approval. Some doctors' names were used without permission.
They also went to senior living centers. They offered COVID-19 testing. But they billed Medicare for much bigger, more expensive tests. Again, they used fake or unauthorized doctor orders.
A court will decide if they are guilty. A whistleblower first brought the case, and the government joined it.
Earlier, the same lab company and related parties settled other cases for a total of 14.6 million dollars.
Understand the basics first
Source: U.S. Department of Justice
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