The United States District Court for the Western District of North Carolina entered final judgment in the amount of $4.5 million against Douglas Smith, resolving the United States’ claims against Smith, one of the former owners of Physicians Choice Laboratory Services (PCLS), a now-defunct diagnostic testing laboratory formerly located in Charlotte, North Carolina and Rock Hill, South Carolina. Smith consented to entry of final judgment against him to resolve allegations that he violated the Anti-Kickback Statute (AKS), and, as a result, caused PCLS to submit millions of dollars in false claims for reimbursement to the Medicare program in violation of the federal False Claims Act (FCA).
This settlement resolves the United States’ allegations that from September 2012 through July 2014, PCLS submitted false claims to the Medicare program as a result of Smith’s payment of kickbacks to the owner of a medical practice in Knoxville, Tennessee. Last week, the U.S. Attorney’s Office for the Western District of North Carolina announced that another defendant, Philip McHugh, also a former owner of PCLS, had agreed to pay over $2 million to resolve claims asserted by the United States that he participated in schemes to illegally induce physicians to refer patients to PCLS for urine drug testing. In December of 2019, the U.S. Attorney’s Office announced that another defendant, Manoj Kumar, a former sales representative and manager of PCLS, had paid $649,407 to resolve similar claims.
