A Florida lab owner pleaded guilty Thursday to defrauding Medicare of more than $25 million in a cancer-screening scheme that involved Ellwood City Medical Center in Lawrence County.

Daniel Hurt, 58, of Fort Lauderdale, pleaded guilty in U.S. District Court in Pittsburgh. He also pleaded guilty to similar charges originally filed in Florida and New Jersey. He is scheduled to be sentenced on all charges Jan. 23 before District Judge W. Scott Hardy.

Police allege that from late 2018 to October 2019, Hurt and others, who own several purported consulting and clinical laboratories in three states, used so-called health fairs offering free genetic testing and telephone marketing to obtain thousands of cheek swabs from Medicare beneficiaries and sent them to laboratories, including Ellwood City Medical Center (ECMC), for testing.

Hurt paid kickbacks to the telemarketers for persuading beneficiaries to submit cheek swabs for cancer genomics testing, according to information filed by U.S. Attorney Cindy K. Chung.

Cancer genomics testing looks at DNA sequencing to detect gene mutations that could indicate a higher risk of developing certain types of cancer in the future. However, cancer genomics testing is not used to determine if someone has cancer, according to the information.

Knowing that ECMC’s lab did not have the certified equipment needed to conduct cancer genomics testing, Hurt directed staff to repackage and reship the specimens to other labs, according to the information.

ECMC then submitted claims to Medicare for fraudulent testing, costing $12,000 or more per beneficiary, resulting in reimbursements that sometimes exceeded $6,000 per test, according to the information. Hurt solicited and received kickbacks from ECMC, according to the information.

ECMC has not been charged.

Hurt’s scheme resulted in Medicare paying the medical center $25.6 million from 53,866 fraudulent claims submitted on behalf of 4,074 Medicare beneficiaries across the country, according to the information.

In October 2019, Hurt transferred about $3 million from an account of of one of the labs he owns to make a payment on a luxury yacht he named “In My DNA,” according to Chung’s filing.

Hurt agreed to pay $97 million in restitution, and forfeit more than $30 million and the yacht as a result of his pleas, including his pleas to the cases that originated in Florida and New Jersey.

Hurt pleaded guilty to a charge of conspiracy to commit health care fraud, pay and receive unlawful kickbacks, and commit money laundering that was filed in the Western District of Pennsylvania on July 26; a charge of conspiracy to commit health care fraud filed in the District of New Jersey on August 31; and a charge of conspiracy to pay and receive kickbacks filed in a second superseding indictment filed in Florida. Prior to the defendant’s guilty pleas, the cases originating in New Jersey and Florida were transferred to Pennsylvania.

In order to justify Medicare reimbursement for the testing, Hurt and his co-conspirators obtained prescriptions from telemedicine physicians without regard to the fact that the doctors did not conduct proper telemedicine visits, were not treating the Medicare beneficiaries for cancer or symptoms of cancer, and did not use the test results in the treatment of the beneficiaries, according to Chung.

Hurt directed ECMC staff to transfer millions of dollars from ECMC-related accounts to bank accounts that Hurt controlled, and in turn, Hurt admitted using funds he obtained from ECMC to pay millions of dollars in kickbacks to the marketers, among others, in exchange for their efforts to obtain cancer genomics test samples, according to Chung.

To disguise the kickbacks, Hurt entered into sham contracts with the marketers to make it appear that they were engaged in, and being paid for, legitimate marketing and referral services, according to Chung.

Acting through entities he controlled, Hurt entered into similar agreements and business arrangements with ECMC that disguised the payments he obtained as purportedly legitimate payments, including payments related to management services at ECMC’s laboratory. Payments, in fact, were based on the volume of tests and the amount of resulting Medicare reimbursements.

In the New Jersey case, Hurt admitted his involvement in a similar but separate conspiracy between January 2019 and October 2021. He admitted that he owned several clinical laboratories that conducted or arranged for a variety of medical tests and that he paid kickbacks and bribes to various entities who supplied referrals and orders for the testing for Medicare and other health care benefit program beneficiaries, without regard to medical necessity, according to Chung.

To conceal the payments of bribes, Hurt and the suppliers entered into sham contracts to make it appear that the suppliers were engaged in, and being paid for, legitimate marketing and referral services. This conspiracy resulted in Medicare paying the Hurt-controlled laboratories at least $53.3 million for CGx test claims, with Hurt receiving at least $26.9 million from the Medicare reimbursements.

In the Florida case, Hurt admitted that he and his co-conspirators were engaged in a scheme to defraud health insurance plans, including two plans funded by the U.S. government, TRICARE and CHAMPVA.

TRICARE provides worldwide health care benefits to military personnel and their dependents and to military retirees. CHAMPVA operates through the Department of Veteran’s Affairs and shares the costs of health care services for eligible beneficiaries, including veterans.

Hurt and his co-conspirators worked with patient recruiters to solicit patients who had health care insurance, including TRICARE and CHAMPVA. The patient recruiters, in turn, would generate prescriptions containing the patients’ information and a limited selection of expensive compounded medications. Hurt and his co-conspirators paid for the telemedicine services only after the prescriptions had been generated, and the prescriptions were then sent to a pharmacy owned by Hurt and his co-conspirators, according to Chung.

Beginning in fall 2014, Hurt and two co-conspirators formed a corporation, OptimuMD. Through OptimuMD, Hurt and his co-conspirators purchased a 3% interest in Executive Pharmacy, in Broward County, Fla. In return, Hurt and his co-conspirators were to receive up to 70% of the gross revenues from Executive Pharmacy, according to Chung.

Hurt and his co-conspirators directed patient recruiters and the telemedicine service to send thousands of medically unnecessary prescriptions to Executive Pharmacy. After filling the prescriptions, the pharmacy would bill the patients’ insurance plan thousands of dollars for the compounded medications. Once the pharmacy received payment for the prescriptions, the pharmacy would then pay a kickback to Hurt and his co-conspirators. Hurt and his co-conspirators would then pay kickbacks to the patient recruiters. As part of his plea, Hurt admitted to personally receiving $4,265,144 from the scheme. Furthermore, he has agreed to pay $18,440,230 in restitution to TRICARE and $450,844 in restitution to CHAMPVA.

For the Pennsylvania and Florida charges, Hurt faces a maximum sentence of five years in prison and a fine of not more than the greater of $250,000. In the New Jersey case, Hurt faces a maximum sentence of 10 years in prison and a fine of not more than the greater of $250,000. As an alternative to the $250,00 fine, he could be fined an amount up to the greater of twice the gross pecuniary gain to any person or twice the pecuniary loss to any person.