California Laboratory and Its Owner Pay $1.25M to Settle…

MENU News

Archived Press Releases

Press Release California Laboratory and Its Owner Pay $1.25M to Settle Allegations of Kickbacks to Marketers Friday, November 6, 2026 Share

For Immediate Release Office of Public Affairs

Clinical laboratory Lab Genomics LLC based in Fountain Valley, California, and its owner, Leena Dalal, have agreed to pay $1.25 million to the United States to resolve allegations that they violated the False Claims Act by paying illegal kickbacks to marketers.

“The payment of kickbacks compromises the integrity of our healthcare programs,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Department will continue to pursue enforcement against those who profit from such unlawful kickback arrangements.”

“It is unlawful to evade the safeguards that protect federal health care programs,” said U.S. Attorney Eric Grant for the Eastern District of California. “Our office is committed to exposing and addressing such schemes, and we will continue to hold accountable those who knowingly violate the Anti Kickback Statute.”

“Kickback schemes undermine the integrity of federal health care programs by placing financial incentives ahead of independent medical decision-making,” said Acting Deputy Inspector General for Investigations Miranda L. Bennett of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “When laboratories use unlawful compensation arrangements to generate referrals, they jeopardize the public’s trust and misuse taxpayer-funded health care dollars. HHS-OIG will continue working with our law enforcement partners to investigate these schemes and hold accountable those who seek to profit through conduct that violates federal law.”

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded healthcare programs. It is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients. Claims that are knowingly submitted in violation of the Anti-Kickback Statute are ineligible for payment and can violate the False Claims Act.

Under the settlement with the United States, Lab Genomics and Dalal have agreed to pay $1,250,000 to resolve allegations that from January 2020 through September 2022, Lab Genomics and Dalal knowingly and willfully paid value and volume-based commissions to three independent contractor marketers to induce them to arrange for or recommend that healthcare providers order and refer laboratory tests to Lab Genomics. The settlement resolves allegations that Lab Genomics and Dalal knew that such payments did not comply with the Anti-Kickback Statute, and structured invoices to the marketers to mask the commission payments by making it appear that Lab Genomics was paying flat fees.

The settlement resolves certain allegations in a lawsuit originally filed by Sunil Wadhwa and Ken Newton under the whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for false claims and share in a portion of the Government’s recovery. Relators will receive $225,000 of the proceeds from the settlement. The qui tam case is captioned United States ex rel. Wadhwa and Newton v. Admera Health, LLC, et al. (E.D. Cal.). The United States previously resolved similar allegations against Admera Health LLC and NEXT Bio-Research Services LLC d/b/a Next Molecular Analytics.

The settlement announced today was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Offices for the Eastern District of California, with assistance from HHS-OIG. It was handled by Trial Attorney Elizabeth J. Kappakas in the Civil Division’s Commercial Litigation Branch (Fraud Section) and Assistant U.S. Attorney Catherine J. Swann in the U.S. Attorney’s Office for the Eastern District of California.

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).

This year the Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration’s war on fraud, waste, and abuse in federal programs. When unscrupulous actors exploit these programs for their own financial gain, they defraud the government, harm the people these programs are designed to aid and protect, and undermine American businesses that play by the rules. The Civil Division’s FCA enforcement plays a critical role in combatting such fraudulent schemes, recovering billions of dollars for the American taxpayers, and holding wrongdoers accountable. FCA matters will continue to be on the forefront of the battle against fraud, and the Civil Division’s FCA work will support and advance the mission of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Updated November 6, 2026 Topic False Claims Act Components Civil Division USAO - California, Eastern Press Release Number: 26-1329

California Laboratory and Its Owner Pay $1.25M to Settle Allegations of Kickbacks to Marketers

MENU News

Archived Press Releases

Related Content