A federal grand jury in Denver recently arrested seven executives of a genetic testing company for allegedly obtaining $40 million from state and federal healthcare systems through fraud.
The seven executives live all around the nation. They hired a pair of Colorado facilities to undertake genetic testing which federal authorities allege was unneeded, fraudulently obtained and illegally paid.
Paying telemarketers to phone elderly patients—all of whom are probably Medicare beneficiaries—in order to request or accept genetic tests—”regardless of medical necessity and through false pretenses and representations,” according to the indictment—was a key component of the scheme.
The seven are as follows:
- Formerly from Berlin, New Hampshire, Ronald King, 51, is the CEO of Tesis Labs LLC. He currently resides in Bangor, Maine.
- Victor Roiter, a 55-year-old Sunny Isles Beach, Florida resident and vice president of marketing at Tesis Labs
- Tina Wellman, 51, is the Mayfield, New York-based Tesis Labs’ chief operating officer.
- Adam Shorr, a 55-year-old Dunedin, Florida resident, is the beneficial owner and business consultant of Tesis Labs.
- Californian resident Robert O’Sullivan, 55, of Lake Sherwood
- Californian John Gautereaux, 59, lives in Temecula.
- Arizonan Bradley Edson, 66, lives in Mesa
According to the indictment, Sullivan and Gautereaux collaborated with the first four to operate Autumn Partnership LLC, a different business that served as a “proof of concept” for the Tesis business plan.
Edson’s ownership of entities that were a part of Tesis LLC is evident in the defendants’ correspondence, which are being utilized as evidence in this lawsuit.
The indictment claims that King, Roiter, Wellman, and Shorr planned to defraud Medicare and Colorado Medicaid via a number of ways, including by giving bribes and kickbacks to the marketing firms that obtained referrals for genetic testing that was medically unnecessary on their behalf.
Sometimes telehealth conferences were used to directly contact patients. To get primary care doctors to sign testing order papers, the marketers even went so far as to “chase” them.
Prosecutors further claimed that Tesis staff members and its Indian billing company “corrected” physician instructions by adding or modifying diagnostic codes.
According to the indictment, “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.”
In New York, a group that included King and Wellman also set up a “call center” “to make direct contact with the elderly to solicit their participation in genetic testing,” according to the document of accusation.
Finally, the prosecution asserts that King, Roiter, and Wellman planned to use the accounts of “shell entities” to launder the conspiracy’s gains, enabling the three to pay themselves directly from the money contained in those accounts.
Tesis Labs LLC was the owner and operator of 303 Diagnostics LLC, based in Aurora, and Claro Scientific Laboratories, Inc., located in Lafayette.
According to the indictment, Tesis purchased Claro in January 2020, and at that time, it was an independent clinical laboratory that was enrolled with Medicare.
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At some point in December 2020, Tesis purchased 303 Diagnostics, a Medicare-eligible Denver-based facility. October 2021 saw its relocation to Aurora.
Together, the three companies comprised Tesis Labs’ testing labs, along with Alliance DX LLC, a Texas laboratory. In 2021, the parent firm rebranded itself as Tesis Biosciences.
From August 26 to September 5, the seven defendants made their initial court appearances in a federal courthouse in Denver. King’s trial is set for March 2025.
