07/17/2025 | Press release | Distributed by Public on 07/17/2025 10:56
COLUMBIA, S.C. -Kevin S. Murdock, former CEO and owner of the now-defunct laboratory Premier Medical, Inc., has agreed to a consent judgment of $27,544,460, acknowledging there is a likelihood he would be found liable in the civil action brought against him by the United States and the States of Colorado, Georgia, and South Carolina (the Governments) for violating the False Claims Act, the Georgia False Medicaid Claims Act, the Colorado Medicaid False Claims Act, and the South Carolina Medical Assistance Provider Fraud Statute. The settlement came one day before his two-week trial was set to begin.
This adds to the $87 million in judgments and settlements the Governments previously obtained against the other defendants named in their suit.
On July 30, 2021, the Governments filed a Joint Complaint in Intervention against Defendants Premier Medical, Inc., Kevin S. Murdock, Michael Conroy, Freedom Medical Labs, LLC, Robert Alan Richardson, and Edward Burch for fraud, waste and abuse against the Medicaid programs of Georgia, Colorado and South Carolina. On April 25, 2025, the U.S. District Court for the District of South Carolina entered a default judgment totaling $71,015,255.70 against Premier Medical, Inc., the clinical lab previously owned by Kevin S. Murdock in Greenville, South Carolina. Premier Medical has been terminated by each of the Medicaid agencies of Georgia, Colorado and South Carolina.
By virtue of the default judgment against Premier Medical, the facts alleged by the Governments as to Premier Medical are taken to be true. Moreover, Murdock has acknowledged that there is a likelihood he would be found liable for violating the federal and state False Claims Acts. The Joint Complaint in Intervention included the following facts:
Premier Medical, its owner Kevin Murdock, and Michael Conroy (together, Premier Defendants), paid illegal kickbacks to Defendants Freedom Medical Labs, LLC, Robert Alan Richardson, and Edward Burch (together, Freedom Defendants), for referrals for expensive cancer genetic (CGX) testing. The Premier Defendants conspired with the Freedom Defendants to target Medicaid beneficiaries in the states of Georgia, Colorado and South Carolina because those states reimbursed favorably for CGX testing. As an example, Premier Medical could gain close to $12,000 in reimbursement for CGX testing of a Georgia Medicaid patient and close to $9,500 in reimbursement for CGX testing of a Colorado Medicaid patient. Accordingly, in 2018 and 2019, the Freedom Defendants traveled to Colorado, Georgia and South Carolina and set up tables in public spaces in low-income areas, such as bus stops, dollar stores and street corners, to target Medicaid beneficiaries. The Freedom marketers falsely advertised they were screening for cancer and enticed Medicaid beneficiaries to provide DNA samples with up to $20.. The Freedom Defendants only obtained samples from those who had a Medicaid card. They would then pay a telemedicine company for a provider's order for the CGX testing for that individual. The provider ordering the test did not have a treating relationship with the beneficiary. Premier Defendants conspired with the Freedom Defendants and were aware these providers' orders and patient samples were obtained using kickbacks, in violation of the Anti-Kickback Statute. These claims were medically unnecessary because they were not the result of a valid test ordered by a patient's treating provider. Further, patients never spoke to a provider and most never received the results of their tests.
For their roles in the scheme, Robert Alan Richardson, individually and on behalf of Freedom Medical, signed a consent judgment for $8 million, as did Edward Burch. They resolved the Governments' claims for lesser amounts based on their ability to pay. As part of the resolution, Richardson and Burch admitted to certain conduct. Freedom Medical agreed to a period of exclusion from federal healthcare programs for a period of seven years. Richardson and Burch previously pleaded guilty for similar conduct related to their referrals of cancer genetic tests to a lab in Tennessee.
Additionally, the Governments resolved their case against former Vice President of Compliance for Premier Medical, Michael Conroy. Michael Conroy admitted that he assisted in Premier Medical's and Freedom Medical's efforts to target certain Medicaid beneficiaries by shipping collection kits to marketers in the target states, by running eligibility checks on beneficiaries, and by coordinating directly with a telemedicine group to obtain the physician orders. Conroy represents he was directed to do these things by Premier Medical's owner, Kevin Murdock. To resolve the allegations against him, Michael Conroy paid $15,000 and he agreed to a three-year period of exclusion from federal health care programs.
Under the False Claims Act and state analogues, the Governments are entitled to treble damages plus penalties. All said, the Governments resolved this cancer genetic testing scheme against all defendants for more than $114 million in judgments and settlements. This scheme cost the Georgia Medicaid program $7,071,860.04, the Colorado Medicaid program $6,581,567.19, and the South Carolina Medicaid program $118,803.44.
"This is a significant victory in the fight against fraud, waste, and abuse in our state and nation," said U.S. Attorney Bryan Stirling for the District of South Carolina. "Health care fraud is pervasive, and taxpayers should not be funding it. Without strong enforcement, it has the potential to cripple an overburdened system and to drain resources from the legitimate health care needs of elderly and disadvantaged Americans. The scheme perpetuated by the defendants in this case was fueled by greed and kickbacks, which have no place in health care. We will continue to invest all available resources, including by collaborating with other states, to protect our health care system and to hold accountable those who engage in this type of egregious fraud."
"Health care executives who submit fraudulent claims to Medicaid undermine a valuable health care program intended to care for some of the most vulnerable populations in our country," said Special Agent in Charge Kelly J. Blackmon with the U.S. Department of Health and Human Services Office of Inspector General. "This settlement demonstrates our steadfast commitment to safeguarding the integrity of taxpayer-funded health care programs like Medicaid as well as the well-being of enrollees who depend on those programs. We will continue to work with our law enforcement partners to use all the tools in our arsenal to hold those who steal from the American public accountable."
"We're committed to stopping scams that target our most vulnerable Georgians and play into fears about serious diseases such as cancer," said Georgia Attorney General Chris Carr. "This type of fraud and abuse will not be tolerated in our state, and we will continue to uphold the integrity of Georgia's Medicaid program while protecting taxpayer dollars."
"Medicaid fraud undermines the integrity of our healthcare system, harming both patients and taxpayers. Its existence cannot be tolerated. These recent civil judgments highlight the importance of stringent oversight and enforcement. Collaborating with state and federal partners on these endeavors is essential for safeguarding public health and ensuring that resources are directed where they are truly needed," said South Carolina Attorney General Alan Wilson. "We must remain vigilant in our efforts to root out fraud, waste, and abuse, holding accountable those who seek to exploit our healthcare system for personal gain."
The judgment includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Karen Mathewson, a former employee of Premier Medical. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Mathewson v. Premier Medical, Inc., 6:18-cv-00165-TMC (D.S.C.).
The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney's Office for the District of South Carolina and the Attorneys General Offices of Georgia, Colorado, and South Carolina, with assistance from the Department of Health and Human Services Office of Inspector General and the Defense Criminal Investigative Service.
The investigation and resolution of this matter illustrates the government's emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The matter was handled by Assistant U.S. Attorneys Beth Warren and Nancy Cote of the District of South Carolina, Senior Assistant AG Sara Vann and Assistant AG James Champlin of the Georgia Attorney General's Office, Assistant AGs Lauren Jones and Hannah Perng, with support from Attorney Fellow Alison Noon, from the Colorado Attorney General's Office, and Assistant Deputy AGs Stephanie Opet and Brandon Steen of the South Carolina Attorney General's Office.
###