Medicaid fraud unit probe leads to arrests, seized assets

AUSTIN – The Office of the Attorney General’s Medicaid Fraud Control Unit (MFCU) has arrested Lily Tran Daniel, Kenneth Reynolds, and Lillian Thai, who are associated with the genetic testing company ApolloMDx, for their involvement in a major healthcare fraud scheme to fraudulently bill Medicare approximately $142 million.

MFCU and the FBI executed warrants seizing sports cars, a sailboat, and three properties, at a total value of $7.1 million, funded by illegal proceeds of the operation.

ApolloMDx offered illegal kickbacks in order to purchase both recipient information from marketers and orders for genetic testing from doctors. In some cases, doctors made fraudulent diagnoses to make it appear as though recipients were eligible for testing when they were not.

In addition, ApolloMDx altered dates of service on testing orders to make it appear that multiple DNA samples were collected on different dates to enable billing for multiple dates of service.

The case was investigated by Sgt. Joyce Combest, Investigative Auditor Wanda Guess and Capt. Rick McCollum from MFCU, as well as the Department of Health and Human Services’ (DHHS) Office of Inspector General and the FBI.

The U.S. Department of Justice Health Care Strikeforce is prosecuting the case.

The MFCU is dedicated to ensuring that those who exploit the healthcare system for personal gain are brought to justice by aggressively pursuing those who engage in all forms of healthcare fraud, safeguarding taxpayer funds, and defending the integrity of vital healthcare programs.

In the last fiscal year alone, the MFCU recovered more than $236 million in settlements and judgments for Texas taxpayers.

In Texas, Medicaid costs taxpayers over $40 billion. Federal and industry authorities estimate that fraud comprises up to 10% of the costs of the Medicaid program, making Medicaid fraud a $4 billion problem in Texas. The MFCU receives 75 percent of its funding from the DHHS under a grant award totaling $20.94 million for fiscal year 2023. The remaining 25 percent, totaling $ 6,. 98 million, is funded by the state of Texas. For every dollar of state funding, the OAG’s MFCU recovers more than $33 for taxpayers.

Anyone suspecting Medicaid fraud or abuse, or patient neglect, is asked to report it by visiting the OAG’s website.