Experienced Atlanta federal health care fraud attorneys keep track of all of the recent cases in the Northern District of Georgia. This past week, the Department of Justice announced a press release stating they filed a major False Claims Act lawsuit against two former executives of an Atlanta-based clinical laboratory, alleging that they caused Medicare to pay approximately $13.7 million for medically unnecessary genetic and respiratory pathogen testing. In addition, the United States reached settlements with Capstone and its owner, Andrew Maloney, for $14.3 million and with Capstone’s billing company, VitalAxis, Inc. for $300,479 to resolve their potential civil liability under the False Claims Act

For physicians, laboratory owners, health care executives, marketers, and billing professionals, the case carries an important warning:

A Medicare billing investigation can become a federal criminal case.

The September 17, 2026 announcement from the U.S. Attorney’s Office for the Northern District of Georgia involves both civil False Claims Act allegations and a related federal criminal prosecution.

If federal agents, HHS-OIG investigators, or prosecutors are asking questions about your Medicare billing, laboratory testing, physician orders, marketing arrangements, or compensation agreements, the time to develop a defense strategy is before charges are filed—not after an indictment.

DOJ Alleges $13.7 Million in Improper Medicare Laboratory Payments

The United States filed a False Claims Act complaint against former Capstone Diagnostics executives Jay Johnson and Austin Whiles, along with associated entities.

Johnson served as Capstone’s Chief Operating Officer and Chief Executive Officer. Whiles served as Chief Sales Officer and Vice President of Business Development.

According to DOJ, the defendants allegedly participated in two schemes between 2019 and 2021 that caused Medicare to reimburse approximately $13.7 million for genetic and respiratory pathogen panel testing that the government contends was not medically necessary.

These are allegations. The civil defendants have the right to contest the government’s claims, and the criminal charges against Johnson remain pending.

But the case illustrates the aggressive investigative theories federal authorities may use when scrutinizing laboratory billing.

Genetic Testing at Churches and Religious Conferences

The first alleged scheme involves genetic testing performed at church-sponsored health fairs and religious conferences.

DOJ alleges that attendees were swabbed for genetic testing and that large amounts of testing were subsequently billed to Medicare even though treating physicians had not requested the tests.

According to the government’s allegations, physician names, signatures, standing orders, and other paperwork were used without authorization to make the tests appear properly ordered and medically necessary.

For laboratories and health care providers, these allegations highlight several issues that frequently become central to federal investigations:

• Who actually ordered the test?
• Did the ordering provider determine that the test was medically necessary for the individual patient?
• Who selected the diagnosis codes?
• Were standing orders permissible and properly documented?
• Did sales or marketing personnel participate in the ordering process?
• Were physician signatures copied, reused, or electronically applied?
• Did compensation depend on testing volume?
• Did anyone receive payment for referrals?

These questions can determine whether the government views a case as a compliance problem, a False Claims Act matter, or a potential criminal fraud prosecution.

COVID-19 Testing and Respiratory Pathogen Panels

DOJ’s second alleged scheme involves COVID-19 testing performed for senior living communities.

According to the government, Capstone allegedly added respiratory pathogen panels to COVID-19 tests requested by senior communities, increasing Medicare reimbursement.

Federal authorities allege that this involved community-wide or chain-wide standing orders, copied physician signatures, standardized diagnosis codes, orders entered by sales personnel instead of treating providers, and unlawful remuneration allegedly paid in violation of the federal Anti-Kickback Statute.

Those allegations have not been proven.

But they illustrate an increasingly important issue in federal health care investigations: the government may examine the entire process by which a reimbursable test was generated—not merely whether the laboratory actually performed the test.

A Billing Problem Is Not Automatically Health Care Fraud

This distinction is critical.

An incorrect Medicare claim does not automatically establish criminal fraud.

Medicare and Medicaid billing rules are extraordinarily complicated. Billing disputes can arise from coding mistakes, documentation deficiencies, employee errors, medical-necessity disagreements, billing company mistakes, misunderstood guidance, software problems, or competing interpretations of reimbursement requirements.

Criminal health care fraud requires more than simply showing that Medicare should not have paid a claim.

In a criminal case, the government must prove the required criminal intent.

That makes the evidence concerning knowledge and intent extremely important.

Experienced federal defense counsel may examine:

• What the client actually knew about the billing practice;
• Who developed the challenged procedure;
• Whether compliance personnel approved or questioned it;
• What physicians and medical personnel understood;
• Whether outside consultants or billing companies provided advice;
• Whether Medicare guidance was clear at the relevant time;
• Whether employees departed from company policies;
• Whether potentially unfavorable communications have an innocent context;
• Whether the government’s statistical or billing analysis accurately reflects individual claims; and
• Whether prosecutors can actually prove that a particular defendant knowingly participated in a fraudulent scheme.

The difference between a reimbursement dispute and a federal felony can turn on these issues.

The Government Is Following the Money

The DOJ announcement also alleges significant financial transactions.

According to the government, Johnson transferred millions of dollars allegedly derived from the schemes to his former wife. DOJ further alleges that Whiles secretly routed approximately $4.75 million in volume-based commissions from independent marketers to himself.

Financial evidence frequently becomes a major component of federal health care fraud investigations.

Investigators may subpoena or seize:

Bank accounts. Emails. Text messages. Marketing agreements. Compensation records. Physician orders. Patient records. Billing data. Electronic health records. Corporate records. Tax returns. Cell phones. Computers. Tax returns are especially useful in their investigations as tax fraud can be another potential charge in these type of cases.

Still, the government may then attempt to use those records to construct a narrative about who knew what and who financially benefited. It is crucial to not co-mingle business funds with personal funds in these types of situations.

These are reasons why retaining defense counsel early is so important. We work together with you and begin an independent analysis of the situation as early as possible.

Anti-Kickback Allegations Can Turn a Civil Investigation Into a Criminal Case

The federal Anti-Kickback Statute creates particularly serious exposure for health care providers and businesses receiving federal program reimbursement.

The statute generally prohibits knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce or reward referrals involving items or services reimbursable by federal health care programs.

Marketing arrangements can receive heightened scrutiny when compensation is tied to testing volume, collections, referrals, or federal health care program business.

A questionable compensation arrangement may expose individuals and companies to multiple theories of liability, including:

Anti-Kickback Statute violations, False Claims Act liability, health care fraud, wire fraud, conspiracy, and exclusion from federal health care programs.

The precise facts matter. Legitimate marketing and compensation arrangements exist, and the existence of a payment does not itself establish a criminal kickback.

The Same Investigation Can Produce Civil and Criminal Cases

The Capstone matter demonstrates how civil and criminal health care enforcement can overlap.

DOJ reports that Johnson was separately indicted by a federal grand jury in December 2025 on charges of:

• Conspiracy to commit health care and wire fraud;
• Health care fraud;
• Wire fraud;
• Conspiracy to receive and pay kickbacks; and
• Payment of kickbacks in connection with a federal health care program.

Those charges are pending. An indictment is an accusation, not evidence of guilt, and Johnson is presumed innocent unless and until proven guilty.

For anyone involved in a federal health care investigation, however, the parallel proceedings demonstrate why it can be dangerous to assume that an investigation is “only civil.”

Statements made during a civil investigation can potentially have consequences in a criminal investigation.

The Investigation Started With a Whistleblower

The case also demonstrates the power of the False Claims Act’s qui tam, or whistleblower, provisions.

According to DOJ, former Capstone laboratory manager Jesse Allen filed the underlying False Claims Act lawsuit. The federal government subsequently intervened in the case on September 4, 2026.

Employees and former employees can possess enormous amounts of information about a health care company’s billing practices, compliance procedures, internal communications, and corporate decision-making.

An employment dispute or internal compliance complaint can therefore develop into something much larger:

A whistleblower complaint. A Civil Investigative Demand. An HHS-OIG investigation. A federal grand jury investigation. And, potentially, a criminal indictment.

Has the FBI or HHS-OIG Contacted You?

One of the most important decisions in a federal investigation may occur before anyone has been charged.

Federal agents sometimes approach executives, physicians, employees, marketers, and other witnesses unexpectedly and ask to “just ask a few questions.”

You are not required to navigate that encounter alone.

If agents want to interview you about Medicare billing, health care claims, laboratory testing, kickbacks, physician referrals, or another potential federal offense, speaking with experienced federal criminal defense counsel before participating in an interview can be critical.

The same is true if you receive:

• A federal grand jury subpoena;
• A Civil Investigative Demand;
• An HHS-OIG subpoena;
• A search warrant;
• A request for billing or patient records;
• A Medicare payment suspension;
• A target letter;
• A request for an FBI interview; or
• Information that employees or business partners are being questioned.

Do not assume that receiving a subpoena means you are merely a witness.

Your lawyer can contact the prosecutor or investigating agency, determine what information can be obtained about your status, evaluate potential exposure, preserve favorable evidence, and develop a strategy before critical decisions are made.

Frequently Asked Questions About Federal Health Care Fraud Investigations

What should I do if the FBI or HHS-OIG wants to interview me?

Before agreeing to an interview, consider speaking with a federal criminal defense attorney.

Statements to federal investigators can become important evidence in a later prosecution. Even when the underlying conduct is not criminal, knowingly making a materially false statement to federal investigators can itself create potential criminal exposure.

Counsel can communicate with investigators, obtain available information concerning the investigation, prepare you for an interview when appropriate, or advise you whether participating is in your interests.

Does receiving a federal grand jury subpoena mean I am under investigation?

Not necessarily.

A subpoena may be issued to a witness, records custodian, subject, target, company, physician, laboratory, or other person possessing relevant evidence.

But a subpoena should never be ignored.

An experienced federal defense attorney can review its scope, communicate with prosecutors, determine whether responsive material raises additional concerns, and evaluate whether the subpoena provides clues about the government’s investigative theory.

Can Medicare billing errors lead to criminal charges?

They can, but a billing error is not automatically a crime.

The critical issues often include what happened, who was responsible, what the defendant knew, and whether prosecutors can prove the required fraudulent intent.

A strong defense may require detailed analysis of individual claims, Medicare rules, medical records, coding decisions, corporate responsibilities, and communications among providers, laboratories, billing personnel, and marketers.

What is the difference between the False Claims Act and criminal health care fraud?

The False Claims Act is primarily a civil enforcement statute that allows the government to pursue false or fraudulent claims for federal funds and potentially obtain substantial damages and penalties.

Criminal health care fraud involves criminal prosecution and can expose a defendant to imprisonment, fines, restitution, forfeiture, and other consequences.

The same underlying conduct can sometimes generate both civil and criminal investigations.

Can a kickback allegation become a criminal case?

Yes.

The federal Anti-Kickback Statute contains criminal provisions. Federal prosecutors may investigate compensation arrangements involving physicians, marketers, laboratories, pharmacies, durable medical equipment companies, telemedicine providers, and other participants in federal health care programs.

Whether an arrangement violates the law depends on the specific facts and applicable statutory and regulatory requirements.

What if my billing company submitted the claims?

Using a third-party billing company does not necessarily end the inquiry.

The government may investigate what information was provided to the billing company, who selected codes, who established billing protocols, what executives knew, whether concerns were raised, and how responsibilities were allocated.

At the same time, evidence showing that a client reasonably relied on professionals, lacked knowledge of improper billing, or did not participate in challenged decisions may be highly relevant to the defense.

When should I hire a federal health care fraud lawyer?

Ideally, before speaking with federal investigators or producing potentially sensitive materials in response to a subpoena.

Pre-indictment representation can give defense counsel an opportunity to understand the government’s theory, identify weaknesses in the allegations, preserve evidence, investigate witnesses, analyze claims data, address potentially misleading information, and advocate for the client before prosecutors make a charging decision.

Under Federal Investigation? Contact Conaway & Strickler Before You Talk to Investigators.

When the Department of Justice, FBI, HHS-OIG, or a U.S. Attorney’s Office begins investigating health care fraud, the consequences can extend far beyond repayment of disputed Medicare claims.

Your business, professional license, assets, reputation, and freedom may all be at stake.

Conaway & Strickler, P.C. represents individuals and businesses in complex federal criminal investigations and prosecutions in Atlanta, throughout Georgia, and across the United States.

Our federal criminal defense attorneys represent physicians, health care professionals, business owners, executives, laboratories, marketers, and other individuals facing government investigations involving Medicare fraud, Medicaid fraud, health care fraud, the Anti-Kickback Statute, False Claims Act allegations, wire fraud, conspiracy, and related federal offenses.

If you have received a subpoena, been contacted by federal agents, learned that your employees or business associates are being interviewed, or believe that you may be the subject or target of a federal health care investigation, do not wait for an indictment to begin building your defense.

Contact Conaway & Strickler, P.C. to speak with an experienced federal criminal defense attorney about protecting your rights and developing a strategy before critical decisions are made.