Hand in the Cookie Jar

New Medicare Card ++First one rejected for Copyright Trademark issues. Please let me know what I need to remove or alter. Is it the DHHS LOGO? Card design curve? Part of number shown? You accept Social Security cards with the same logo. This was accepted in 2018. iStock # 653549364. Just let me know how to get the new card accepted… thanks!++++

A group of healthcare professionals, including doctors and laboratory owners, admitted to defrauding Medicare out of millions of dollars through a kickback-induced genetic testing scheme.

Edward Kostishion of Lakeland, Fla., recently pleaded guilty to a superseding information charging him with two counts of conspiracy to commit an offense against the United States. These charges were in connection with schemes to commit health care fraud and violate the Anti-Kickback Statute.

Kostishion admitted to using the company he owned and operated to defraud the Medicare Program by submitting fraudulent orders for genetic tests. Kostishion and five co-defendants were charged in September 2019 in connection with these conspiracies. (Everyone involved in this scheme got caught with their hand in the cookie jar.)
Ark Laboratory Network LLC (Ark), the company that Kostishion owned and operated in Florida, was an approved Medicare facility for genetic testing. Kostishion allegedly partnered with the owner of Privy Health Inc. to obtain the personal information of hundreds of Medicare beneficiaries along with their DNA samples. (Now that is super scary. There’s no telling what a fraudster could do with stolen DNA samples.)

Kostishion and the owner of Privy Health Inc. would offer beneficiaries $75 gift cards to patients in exchange for their Medicare information. (Who in their right mind would sell their personal information? And for $75?) Physician and co-conspirator Matthew Ellis would then authorize genetic testing for hundreds of beneficiaries across the country that they had illegally obtained information from.  

These genetic tests were authorized for patients who were never seen nor examined by Ellis. (No surprise there.) Some of the orders falsely claimed that Ellis’ patients had a family history of cancer and needed to be tested for cancerous genes. (Ellis also ordered tests for patients in states that he was not authorized to practice in. But why pay attention to rules and regulations when you’re already breaking the law?)  

Ellis’ unnecessary orders allowed for Kostishion and other conspirators to use the laboratories they owned and operated to fraudulently charge Medicare for genetic testing. Medicare paid the clinical laboratories involved in this scheme more than $4.6 million in 2018 for the genetic testing that Ellis ordered. (They achieved their goal of getting paid to do absolutely nothing.)

The co-conspirators involved in this scheme paid Kostishion bribes in exchange for directing DNA samples and orders for genetic tests to their clinical laboratories. Kostishion concealed the kickbacks that he was receiving by issuing invoices through Ark to other laboratories. These invoices reflected fictitious services being provided at an hourly rate.

The amount of bribes Kostishion received varied based on the revenue the laboratories received from Medicare or an amount paid for each DNA sample. Kostishion received more than $1.8 million in bribes in 2018 from the laboratories involved in this scheme.

Kostishion faces up to five years in prison for each conspiracy count. He could also be required to pay a fine of $250,000, or twice the gross gain or loss from the offense. (He may owe just a tad more based on the millions he stole from Medicare.)  Kostishion will be sentenced in April 2021. Co-defendants Kacey Plaisance, of Altamonte Springs, Fla., and Kyle McLean, of Arlington Heights, Ill., also pleaded guilty for their roles in this Medicare fraud scheme.

Today’s Fraud of the Day comes from a Department of Justice Press Release, “Florida Man Admits Role in $4.6 Million Health Care Fraud and Kickback Schemes Related to Genetic Testing,” published on November 19, 2020.

NEWARK, N.J. – A Florida man today admitted his role in using his company to defraud the Medicare Program in connection with fraudulent orders for genetic tests, Attorney for the United States Rachael A. Honig announced.

Edward B. Kostishion, 60, of Lakeland, Florida, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to a superseding information charging him with two counts of conspiracy to commit an offense against the United States in connection with schemes to commit health care fraud and violate the Anti-Kickback Statute. Kostishion and five co-defendants were previously charged by indictment in September 2019 in connection with these conspiracies.



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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.