However, doing so caused Health Diagnostic Laboratory to be the center of a federal anti-kickback investigation since the company paid doctors money to have them send blood samples for testing. Health Diagnostic Laboratory settled with the federal government and paid $47 million without admitting wrongdoing.
Health Diagnostic Laboratory Filed Chapter 11 Bankruptcy
Although Health Diagnostic Laboratory was considered one of the fastest growing companies in Richmond, Virginia, the company filed for Chapter 11 bankruptcy after the $47 million settlement with the federal government. They laid off hundreds of employees and sold most of its assets.
LeClairRyan paid a $20.375 million settlement to the bankruptcy estate in September 2016. Yet, in March 2017, Dennis Ryan and two former executives of Health Diagnostic Laboratory, agreed to another $28.8 million settlement into the bankruptcy estate and did not have to admit to any wrongdoing.
Mallory Alleges Ryan Said the Payments Would Fall Under “Safe Harbor” Exemptions
According to Mallory, Ryan’s legal opinion related to the payments to the doctors that ended up violating federal law and being designated as kickbacks was the payments would fall under safe harbor exemptions. It’s interesting to note that while the company paid the federal government $47 million, the total paid by LeClairRyan, Dennis Ryan, and other executives total more than $48 million.
