Former lab CEO gets 2 years prison in $6.5M fraud case

Jae Lee, 51, former CEO of the now-defunct Northwest Physicians Laboratory in Bellevue, Wash., was sentenced to two years in prison and $7.6 million in restitution for a drug testing kickback scheme that cost the government more than $6.5 million, the Justice Department said May 27.

From 2013 to 2015, Mr. Lee conspired with others for kickbacks from medical testing labs in exchange for government testing business referred to the labs, the department said. With Mr. Lee's help, NWPL netted more than $3.7 million in kickbacks by diverting urine tests to labs that could bill the government for them.

NWPL was physician-owned and thus could not test urine samples for patients covered by government health programs, the department said. Mr. Lee and others described the kickbacks from the non-physician-owned labs as fees for marketing services that weren't actually performed.

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