Two More Individuals Plead Guilty in Connection with Health Care Kickback Conspiracy | USAO-EDTX

TEXARKANA, Texas – Two more individuals have pleaded guilty to conspiring to pay and receive kickbacks in violation of the Anti-Kickback Statute, announced Acting United States Attorney Nicholas J. Ganjei.

Kimberly Willette, 59, of Friendswood, Texas, and Edwin Chad Isbell, 48, of McKinney, Texas, pleaded guilty to conspiracy to commit illegal remunerations on Jan. 25, 2021 before U.S. Magistrate Judge Caroline Craven.

Nicolas Arroyo of Newport Coast, California, previously pleaded guilty for his involvement in the conspiracy.

“Kickback schemes are anti-competitive, lead to overutilization and higher program costs, and prioritize profits over patient care,” said Acting United States Attorney Nicholas J. Ganjei.  “The payment and receipt of kickbacks related to federal health care programs will not be tolerated in the Eastern District of Texas.” 

According to information presented in court, the defendants conspired with others to pay and receive kickbacks in exchange for the referral of, and arranging for, health care business, specifically pharmacogenetic (PGx) tests.  Pharmacogenetic testing, also known as pharmacogenomic testing, is a type of genetic testing that identifies genetic variations that effect how an individual patient metabolizes certain drugs.  The illegal arrangement concerned the referral of PGx tests to clinical laboratories in Fountain Valley, California, Irvine, California, and San Diego, California.  More than $28 million in illegal kickback payments were exchanged by the defendants and others during the conspiracy.

In December 2019, Arroyo and eleven other individuals from three states were charged for their roles in the kickback conspiracy.  A federal grand jury in the Eastern District of Texas returned an indictment against Philip Lamb of Scottsdale, Arizona; Nicolas Arroyo of Newport Coast, California; Vincent Marchetti, Jr., of Coronado, California; William Flowers of Houston, Texas; Steven Donofrio of Temecula, California; James J. Walker, Jr. a/k/a Jimmy Walker of Frisco, Texas; Timothy Armstrong of Frisco, Texas; Virginia Blake Herrin of Frisco, Texas; Patrick Ridgeway of Jackson, Mississippi; Chismere Mallard of McAllen, Texas; Ray W. Ng of Dallas, Texas; and Ashley Kretzschmar of Aledo, Texas; for conspiring to commit illegal remunerations in violation of the Anti-Kickback Statute.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remunerations in exchange for the referral of or arranging for items or services payable under federal health care programs.  Under federal statutes, violations of the Anti-Kickback statute are punishable by up to five years in federal prison.

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, the FBI Dallas – Frisco Resident Agency, and the U.S. Department of Homeland Security, Homeland Security Investigations.  It was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and L. Frank Coan, Jr.

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