Former Atlanta Lab Executives Accused of Billing Medicare $13.7 Million for Unnecessary Tests

ATLANTA – The federal government has filed a False Claims Act lawsuit against two former executives of an Atlanta clinical laboratory, accusing them of causing Medicare to pay approximately $13.7 million for medically unnecessary genetic and respiratory testing.

The complaint names Jay Johnson, former chief operating officer and chief executive officer of Capstone Diagnostics LLC, and Austin Whiles, the laboratory’s former chief sales officer and vice president of business development, along with associated entities.

Federal authorities allege Johnson and Whiles carried out two schemes between 2019 and 2021 that generated laboratory testing through church health fairs, religious conferences and senior living communities.

In the first, the government alleges Johnson and Whiles targeted church-sponsored health fairs and religious conferences to obtain samples from attendees and bill Medicare for extensive genetic testing that physicians had not requested.

Johnson allegedly directed Capstone employees to swab attendees at large events and then improperly used physicians’ names, signatures, standing orders and other paperwork to make the testing appear to have been properly ordered and medically necessary.

The second scheme involved COVID-19 testing at senior living communities.

According to the complaint, Johnson and Whiles added respiratory pathogen panels that were not medically necessary to COVID-19 tests requested by the communities, increasing the amount Capstone could bill Medicare.

Federal attorneys allege the defendants used facility-wide standing orders, copied physician signatures, standardized diagnosis codes and allowed sales employees rather than treating medical providers to enter orders.

The government also alleges unlawful payments were made in violation of the Anti-Kickback Statute.

Together, the two schemes caused Medicare to pay about $13.7 million for laboratory tests between 2019 and 2021, according to the complaint.

Johnson allegedly transferred millions of dollars generated through the schemes to his now-former wife, Sarah Haslock. Whiles allegedly routed approximately $4.75 million in volume-based commissions from independent marketers to himself.

The lawsuit stems from a whistleblower case filed by Jesse Allen, a former Capstone laboratory manager. The federal government intervened in the case Sept. 4. The lawsuit is pending in the U.S. District Court for the Northern District of Georgia.

The government previously reached a $14.3 million settlement with Capstone and its owner, Andrew Maloney, resolving potential False Claims Act liability. Capstone’s billing company, VitalAxis Inc., separately agreed to pay $300,479 to resolve allegations involving unnecessary respiratory testing.

Johnson also faces a separate federal criminal case. A grand jury indicted him in December 2025 on charges including conspiracy to commit health care and wire fraud, health care fraud, wire fraud and federal kickback offenses. Those charges remain pending.

The civil allegations and pending criminal charges are accusations and have not been established as liability or guilt.

The civil investigation involves the U.S. Attorney’s Office for the Northern District of Georgia, Justice Department, Department of Health and Human Services Office of Inspector General and FBI.