Monroeville business owner Ravitej Reddy, who raked in millions in a wide-ranging, multi-state $127 million Medicare kickback scheme, is headed to federal prison for a year and a half.
U.S. District Judge William Stickman imposed an 18-month term Monday on Reddy and ordered him to forfeit $9 million and pay more than $77 million in restitution.
Reddy, 56, had waived indictment in 2020, usually an indication of cooperation with authorities, and pleaded guilty to conspiracy and other counts.
He admitted that he agreed with others to pay illegal kickbacks related to lab tests at companies he owned — Personalized Genetics in Pittsburgh and Med Health Services Management in Monroeville.
The conspiracy involved two kinds of testing. One was called CGx, or cancer genomic testing, which used DNA sequencing to detect mutations that could indicate cancer risk. The other was called PGx, or pharmacogenetic testing, which is designed to detect the effectiveness of medications.
Reddy and others conspired to pay kickbacks to marketers, who in return obtained cheek swabs from Medicare beneficiaries at health fairs or through the mail to be used in lab tests. Reddy and his cohorts also paid kickbacks to ensure that telemedicine doctors provided prescriptions for the lab tests for the swabs obtained by the marketers.
Reddy’s labs then billed Medicare for the tests, defrauding the U.S. in excess of $60 million.
Three of the other conspirators in Florida and South Carolina had previously been prosecuted federally in Miami, with cases against several of the main players still pending.
Reddy and his lawyer, Mark Rush, asked for leniency in part because he said he offered COVID-19 testing for free during the pandemic, but prosecutors said he doesn’t deserve any breaks.
Assistant U.S. Attorney William Guappone said in sentencing papers that Reddy, unlike many federal defendants, has a supportive family, an education and a career as a “well-educated businessman who could have been successful in a variety of legitimate fields.”
Instead, the prosecutor said, he “chose to put those skills to use to cause a $60 million loss to his country.”
Guappone said that figure needs to be put into perspective.
“Earning the median American wage, it would take a worker more than 1,000 years to make that much money,” he said.
Torsten covers the courts for the Pittsburgh Post-Gazette, but he's currently on strike. Reach him at jtorsteno@gmail.com.
