09/18/2026
We are honored to represent the whistleblower in this matter, which has already resulted in multiple civil settlements and criminal indictments.
ATLANTA – The United States has filed a complaint under the False Claims Act against Jay Johnson, the former Chief Operating Officer and Chief Executive Officer of the Atlanta-based clinical laboratory Capstone Diagnostics, LLC (“Capstone”); Austin Whiles, Capstone’s former Chief Sales Officer and Vice President of Business Development; and associated entities. The complaint alleges that the defendants caused Medicare to pay approximately $13.7 million for genetic and respiratory pathogen panel testing that was not medically necessary. Johnson also faces criminal health care and wire fraud charges arising from the scheme, which allegedly exploited church health fairs, religious conferences, and senior living communities to generate testing volume, including by paying kickbacks to conference organizers and independent marketers.
“Johnson and Whiles allegedly took advantage of individuals at religious events and senior living facilities to line their pockets and drain millions of dollars from the Medicare trust fund,” said U.S. Attorney Theodore S. Hertzberg. “This lawsuit reflects our commitment to recovering unlawfully diverted public money from anyone who defrauds the government and taxpayers.”
“Today’s complaint reflects the Justice Department’s steadfast commitment to combating fraud in federal health care programs,” said Brett A. Shumate, Assistant Attorney General of the Civil Division. “Laboratory testing must be driven by patient needs, not financial incentives. We will continue to use the False Claims Act to hold accountable those who exploit Medicare for personal gain.”
“The conduct alleged in this complaint reflects a blatant disregard for patient welfare and an abuse of trust,” said Acting Deputy Inspector General for Investigations Miranda L. Bennett of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG remains committed to working with our federal partners to safeguard Medicare and ensure that those who exploit the program and the vulnerable communities it serves are held accountable.”
“Laboratory companies have a responsibility to perform the specific testing requested by physicians,” said Marlo Graham, Special Agent in Charge of FBI Atlanta. “Schemes like this raise healthcare costs for everyone. The FBI is committed to safeguarding the integrity of our federal health care programs.”
According to U.S. Attorney Hertzberg, the complaint, and other information presented in court: Between 2019 and 2021, Johnson and Whiles allegedly engaged in two schemes to defraud Medicare. First, Johnson and Whiles allegedly targeted church-sponsored health fairs and religious conferences to perform and claim reimbursement for massive amounts of genetic testing not requested by physicians. Johnson allegedly directed Capstone personnel to swab attendees at mass events and then, without permission, used physicians’ names, signatures, standing orders, and other paperwork to make the testing appear properly ordered and medically necessary.
Second, Johnson and Whiles allegedly added medically unnecessary respiratory pathogen panels to COVID-19 tests sought by senior living communities, which inflated the Medicare reimbursements paid to Capstone. They allegedly did so by improperly using community- and chain-wide standing orders, copying physician signatures, standardizing diagnosis codes, having sales personnel enter orders rather than treating providers, and paying unlawful remuneration in violation of the Anti-Kickback Statute.
In total, the defendants allegedly caused Medicare to pay approximately $13.7 million for laboratory tests generated through the two schemes from 2019 through 2021. Johnson allegedly transferred millions of dollars derived from the schemes to his now-former wife, Sarah Haslock, and Whiles secretly routed to himself approximately $4.75 million in volume-based commissions from independent marketers.
Relatedly, the United States reached settlements with Capstone and its owner, Andrew Maloney, for $14.3 million and with Capstone’s billing company, VitalAxis, Inc. for $300,479 to resolve their potential civil liability under the False Claims Act.
On September 4, 2026, the United States intervened in a lawsuit filed in the U.S. District Court for the Northern District of Georgia under the qui tam or whistleblower provisions of the False Claims Act, United States ex rel. Allen v. Capstone Diagnostics, LLC, et al., Civil Action No. 1:19-CV-5598-SEG. Under the False Claims Act, private citizens may bring suit for false claims on behalf of the United States and share in any recovery obtained by the government. Jesse Allen, the former laboratory manager for Capstone, is the whistleblower who filed the initial lawsuit.
On December 10, 2025, a federal grand jury indicted Johnson for conspiracy to commit health care and wire fraud, health care fraud, wire fraud, conspiracy to receive and pay kickbacks, and payment of kickbacks in connection with a federal health care program. Those charges are currently pending.
Assistant U.S. Attorney Neeli Ben-David and Associate Deputy Attorney General Paul Perkins, Fraud Section Trial Attorney Asha Natarajan, and Healthcare Fraud Investigative Analyst Alena Evans of the Justice Department’s Civil Division are handling the civil False Claims Act matter, with substantial assistance from the United States Department of Health and Human Services, Office of Inspector General and the Federal Bureau of Investigation. Assistant U.S. Attorney Angela Adams and Special Assistant U.S. Attorney Jim Mooney are handling the criminal matter.
One of the most powerful tools in the effort to combat healthcare fraud is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to HHS at 800-HHS-TIPS (800-447-8477).
This year, the Trump Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration’s war on fraud, waste, and abuse in federal programs. When unscrupulous actors exploit these programs for their own financial gain, they defraud the government, harm the people these programs are designed to aid and protect, and undermine American businesses that play by the rules. The Civil Division’s False Claims Act enforcement plays a critical role in combatting such fraudulent schemes, recovering billions of dollars for the American taxpayers, and holding wrongdoers accountable. False Claims Act matters will continue to be on the forefront of the battle against fraud, and the Civil Division’s False Claims work will support and advance the mission of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6185. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
