RICHMOND, Va. — While Richmond-based Health Diagnostic Laboratory’s part in a federal investigation has come to a close, the legal trouble for its former CEO may just be getting started.
Tonya Mallory, who co-founded the company in 2008 and abruptly stepped down as CEO last year, is named as a defendant in a recently unsealed whistleblower lawsuit and could face further litigation from the federal government.
The lawsuit − which was under seal for years up until last week − focuses on whether fees that companies like HDL paid to doctors in exchange for using their services were kickbacks under federal law, how Mallory and other individuals were involved in that questionable business model, and whether they could be held liable. It claims the practices violated federal and state false claims acts based on their billing of government healthcare programs.
As brought forth by whistleblowers Scarlett Lutz, of South Carolina-based Palmetto Billing Service, and Kayla Webster, a registered nurse, the case claims that “Mallory was directly involved in HDL’s scheme to provide cash remuneration to referring physicians.”
It further alleges that Mallory personally signed payment checks to doctors. To read more about the lawsuit, click here.