Atlanta-based federal prosecutors have filed a False Claims Act complaint against two laboratory executives accused of orchestrating Medicare testing schemes that targeted faith-based communities and senior living facilities, according to a Sept. 17 news release from the Justice Department.
Jay Johnson and Austin Whiles used their roles at Capstone Diagnostics, an Atlanta-based clinical laboratory, to generate testing through unlawful kickbacks and without individualized treating-provider judgment, causing Medicare to pay an estimated $13.7 million for tests that should never have been reimbursed, according to the complaint, filed Sept. 17 in the U.S. District Court for the Northern District of Georgia.
In the first alleged scheme, Mr. Johnson and Mr. Whiles used church-sponsored health fairs and religious conferences to generate genetic testing, directing Capstone personnel to swab attendees at mass events and then using physician names, signatures and standing orders without permission to make the testing appear properly ordered. When COVID-19 testing demand rose at senior living communities, the two allegedly shifted to generating larger, higher-reimbursing respiratory pathogen panels through chain-wide standing orders, copied or altered physician signatures, and order entry by sales personnel rather than treating providers.
Capstone and its owner, Drew Maloney, previously paid $14.3 million, and the lab’s billing company, VitalAxis, separately paid $300,479, to resolve related False Claims Act liability, according to the release. Mr. Johnson was indicted in the Northern District of Georgia on Dec. 10, 2025, on conspiracy to commit healthcare fraud charges tied to the church health fairs scheme; that prosecution remains pending.
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