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Oct 22, 2013 by |

Whistleblowers Allege Kickbacks at Diagnostic Laboratories – Case Settles


Diagnostic laboratories, a California based medical laboratory agreed to pay $19.4 million to settle a whistleblower case.  The money will be paid to federal and state governments.  The two whistleblowers alleged that their employment was terminated at the company after they reported kickbacks and secret discounts. California whistleblower and securities attorneys say that whistleblowers who get fired for reporting wrongdoing have legal rights.

In this case, it is alleged that Diagnostic Laboratories defrauded Medicare and Medi-Cal by charging them substantially higher rates for services than other customers.  The whistleblowers were two former employees who reported that the company was secretly charging cut-rate fees to nursing homes for the same services that they were billing Medicare and Medi-Cal at higher rates.  Allegedly, the rates were 80 percent higher when Medicare and Medi-Cal were billed.  California whistleblower and securities attorneys remind the public that whistleblowers save the taxpayers millions of dollars each year.

Diagnostic Laboratories issued a statement that it believes it could have proved itself not guilty in a jury trial, but decided to settle the case to avoid the time and expense of further litigation.  A company spokesman also stated that the settlement relates to practices that began under prior ownership and that settling the case will allow the company to concentrate on providing health care services to seniors.

The whistleblowers in this case worked in the sales department at Diagnostic Laboratories.  They put their livelihoods on the line to report the alleged fraud.  California whistleblower and securities attorneys say that they did the taxpayers a favor by reporting the alleged wrongdoing.

Evans Law Firm, Inc. handles whistleblower/false claims, consumer fraud class actions, insurance and banking fraud, consumer product liability, elder abuse, and personal injury cases.  If you think that you have witnessed or are the victim of financial fraud by an insurance company, bank or individual then, contact Evans Law Firm, Inc. at (415) 441-8669 for a free and confidential consultation, or email

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