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45 U.S. Att'ys Bull. 31 (1997)
Successful LabCorp Settlement a Result of Operation LABSCAM

handle is hein.journals/usab45 and id is 264 raw text is: Successful LabCorp Settlement a Result of Operation LABSCAM Richard S. Glaser, Jr., Chief Criminal Division, and Assistant United States Attorney Gill P. Beck Middle District of North Carolina Introduction On November 21, 1996, Laboratory Corporation of America Holdings (LabCorp), Burlington, North Carolina, agreed to pay $182,000,000 to resolve civil allegations associated with submitting false claims for medically unnecessary laboratory tests to Federal and state health care programs. On that same day, LabCorp's subsidiary, San Diego Regional Laboratory of Allied Clinical Laboratories, Inc. (Allied), pled guilty to a similar charge and was fined $5,000,000 in Federal court in Greensboro, North Carolina. LabCorp entered into a Pre-Trial Diversion Agreement with the United States Attorney's office (USAO) for the Middle District of North Carolina (MDNC) and a Corporate Integrity Agreement with the Department of Health and Human Services (HHS) to preclude reoccurrence. Because LabCorp's corporate headquarters is located in Burlington, the USAO for the MDNC was assigned to investigate and prosecute the LabCorp criminal case. The civil investigations were focused in the Southern District of New York (SDNY) and the MDNC. The settlement was a team effort, negotiated by the Assistants in the Southern District of California (SDCA), the SDNY, and the MDNC, and the Civil and Criminal Divisions of the Department of Justice (DOJ). The criminal guilty plea, pretrial diversion, and civil settlement with LabCorp are recent developments in a nationwide crackdown by DOJ on fraudulent conduct by independent clinical laboratories. The LabCorp settlement is significant not only because it was one of the goals of the National Operation LABSCAM seven-member task force to restore millions of dollars to Medicare and other Federal and state health care programs, but because it provided important lessons for Assistant United States Attorneys using parallel civil and criminal investigations as part of DOJ's affirmative civil enforcement (ACE) program in the fight against health care fraud. The authors acknowledge the importance and incalculable assistance received throughout the investigations from the SDCA, the SDNY, and both the Civil and Criminal Divisions of the Department. The USAOs in the Eastern District of Virginia, Middle District of Pennsylvania, District of Columbia, and the District of New Mexico played an instrumental role in the LabCorp resolution. The USAO for the District of Columbia and the Office of Personnel Management provided invaluable assistance on issues pertaining to the administration of the Federal Employees Health Benefits Program and the Railroad Retirement Board. Background This article is limited to the MDNC's investigation of Roche Biomedical Laboratories, Inc. (RBL). The criminal investigation was instituted in the MDNC. Two qui tam actions were filed, 31

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