FRISCO, TX – Former True Health Diagnostics CEO Christopher Grottenthaler has agreed to pay $4.25 million to settle False Claims Act allegations that he arranged illegal kickbacks to physicians for laboratory referrals in violation of the Anti-Kickback Statute, according to the U.S. Department of Justice.
Two physicians, Dr. Hong Davis of Plano and Dr. Elizabeth Seymour of Denton, along with seven marketers, agreed to pay an additional $1,818,462 to resolve related allegations. With these settlements, the Department of Justice has secured more than $59 million in recoveries tied to managed service organization (MSO) kickback schemes involving over 50 physicians nationwide.
Prosecutors alleged Grottenthaler facilitated payments disguised as MSO distributions, consulting fees, handling fees, and copay waivers to induce doctors to order laboratory testing from True Health and other labs between 2015 and 2018. Despite warnings about the scheme, he allowed the conduct to continue, resulting in false claims submitted to Medicare, Medicaid, and TRICARE.
The lawsuit was originally filed under the False Claims Act’s whistleblower provisions by STF LLC, whose members Christopher Riedel and Dr. Felice Gersh will receive $148,750 from Grottenthaler’s settlement.
The civil settlements also resolve allegations against the following parties:
- Dr. Davis ($124,627) for payments tied to Ascend MSO and Herculis MG LLC.
- Dr. Seymour ($234,215) for payments tied to Ascend MSO and Eridanus MG LLC.
- Marketers Courtney Love, Stephen Kash, Laura Howard, Jeffrey Parnell, Stanley Jones, Jordan Perkins, and Ruben Marioni, collectively paying $1,459,620.
The cases were investigated by the Department of Health and Human Services Office of Inspector General (HHS-OIG) and the Defense Criminal Investigative Service (DCIS). Trial attorneys with the DOJ Civil Division and the U.S. Attorney’s Office for the Eastern District of Texas handled the settlements.
The DOJ emphasized that the Anti-Kickback Statute protects patients by ensuring medical decisions are not influenced by improper financial incentives. The claims resolved by the settlements are allegations only, with no determination of civil liability.
