A Mars resident is among 18 defendants charged by the U.S. Justice Department in an alleged kickback scheme involving referrals for hospital laboratory testing in Texas.

The Justice Department has filed a complaint alleging False Claims Act violations based on patient referrals in violation of the Anti-Kickback Statute and the Stark Law, as well as claims otherwise improperly billed to federal healthcare programs for laboratory testing.

Matthew Theiler of Mars, a former vice president of sales for Boston Heart Diagnostics Corporation, is among those charged. Most of the other defendants live in Texas. One resides in New York.

Laboratory executives and employees at True Health Diagnostics (THD) and Boston Heart Diagnostics Corporation (BHD) allegedly conspired with small Texas hospitals, including Little River Healthcare (LRH), to pay doctors to induce referrals to the hospitals for laboratory testing, which was then performed by BHD or THD, according to the Justice Department.

The complaint alleges that the hospitals paid a portion of their laboratory profits to recruiters, who kicked back those funds to the referring doctors. The recruiters allegedly set up companies known as management service organizations to make payments to referring doctors that were disguised as investment returns, but were actually based on and offered in exchange for the doctors’ referrals, according to the department.

BHD and THD executives and sales force employees leveraged the kickbacks to doctors to increase referrals and their bonuses and commissions, according to the department.

The complaint alleges that laboratory tests resulting from this referral scheme were billed to various federal health care programs, and that the claims not only were tainted by improper inducements, but also involved tests that were not reasonable and necessary. To increase reimbursement, LRH falsely billed the laboratory tests as hospital outpatient services, according to the department.