News Column

Feds want to hold $754K from Westmoreland lab as part of fraud investigation

September 4, 2014

By Brian Bowling, The Pittsburgh Tribune-Review

Sept. 04--The government is investigating whether a Westmoreland County laboratory and its owner committed health care fraud, according to a document filed in federal court Thursday.

The FBI has been investigating Universal Oral Fluid Laboratories of PA LLC, William J. Hughes and others for allegedly conspiring with physicians to defraud private and government insurers, Assistant U.S. Attorney Lee Karl said in a motion seeking to keep about $754,000 the government seized from Hughes and the company during the investigation.

No criminal charges have been filed. The U.S. Attorney's Office declined comment.

There was no answer at the number for the laboratory in Jeannette and an attorney who represented the lab in a related civil lawsuit couldn't be reached for comment.

During the investigation, federal agents seized $68,500 in cash, about $415,500 in a certificate of deposit with WesBanco and $269,900 in an account at the First Commercial Bank in Indiana, Pa., Karl said.

The government contends it can keep that money because it is the product of illegal activity.

Hughes and the lab paid doctors kickbacks so they would exclusively use Universal Oral Fluid Laboratories for testing of all the oral swabs the doctors took from their patients, prosecutors say.

Hughes talked with some of the doctors about how to increase the number of swabs they were taking so they could "open the floodgates" of the services they were billing to private insurers, Medicare and Medicaid, prosecutors say.

From January 2011 to November 2013, the company billed $42 million to private insurers and at least $11.2 million to Medicare, prosecutors say.

Millennium Laboratories Inc. of San Diego sued Universal Oral Fluid Laboratories in 2011 in Tampa federal court. The California lab said that the newly created Universal Oral Fluid Laboratories was using kickbacks and other illegal incentives to rapidly gain market share in the drug screen and testing market.

The companies settled the lawsuit in November, according to court documents. Details of the settlement weren't available.


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Source: Pittsburgh Tribune-Review (PA)

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