On July 23, 2026, the Department of Justice announced that clinical lab Magnolia Diagnostics and its owners agreed to pay $19.2 million to resolve allegations that they violated the False Claims Act by billing Medicare for medically unnecessary respiratory pathogen panel (“RPP”) testing performed in connection with COVID-19 testing at senior living communities. Notably, Magnolia’s investors separately agreed to pay an additional $4.8 million to resolve alleged common law claims for unjust enrichment and payment by mistake and claims under the Federal Debt Collection Procedures Act arising from distributions they received from the laboratory. Assistant Attorney General Brett Shumate emphasized that the Department will seek to hold accountable not only entities that submit false claims, but also individuals and investors who allegedly benefit from fraudulent conduct, which is consistent with previous statements of DOJ’s enforcement priorities and resolutions, as we covered here and here.

(more…)