Appeals court upholds $114M verdict against former lab CEO, marketers

An appeals court upheld a verdict against the former chief executive of a blood testing laboratory and two of its marketers that found them liable for violating the False Claims Act.

In May 2018, the U.S. District Court for the District of South Carolina entered a $114 million judgement against the defendants after a jury found they had violated the False Claims Act. 

During a 12-day trial, the federal government argued that the defendants ran a kickback scheme that paid physicians for drawing patients' blood and processing the blood samples through two laboratories: Health Diagnostics Laboratory in Richmond, Va., and Singulex in Alameda, Calif. The government also accused the labs of billing federal healthcare programs for unnecessary tests. 

LaTonya Mallory, the former CEO of the Health Diagnostics Laboratory, and two marketers for both labs, Floyd Calhoun Dent and Robert Bradford Johnson, appealed the verdict. On Feb. 22, the U.S. Court of Appeals for the Fourth Circuit affirmed the district court's judgement in all respects. 

The allegations against the defendants were first brought in three lawsuits filed under the whistleblower provision of the False Claims Act.

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