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Former genetics company exec pleads guilty to conspiracy in kickback scheme

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Posted at 7:45 PM, Aug 04, 2020
and last updated 2020-08-04 22:45:32-04

SAN DIEGO (CNS) - A former executive for an Orange County genetics company pleaded guilty today to a federal conspiracy charge for paying kickbacks to physicians.

Donald Joseph Matthews, 50, formerly the vice president of market development for Proove Biosciences, admitted in San Diego federal court to paying doctors at least $3.5 million to order the company's DNA tests for their patients, according to the U.S. Attorney's Office.

In total, the U.S. Attorney's Office said Proove billed around $45 million to the Medicare program for the tests -- which the company alleged could determine a patient's risk of drug addiction -- and received around $21 million in reimbursements.

Prosecutors said the company claimed the payments were compensation for participation in a clinical research program, but the money was actually "directly tied to the volume of tests that a doctor ordered and whether a doctor continued to order more tests from Proove over time.''

In his plea agreement, Matthews admitted that without the financial compensation, ``most doctors were not interested in ordering Proove's tests for their patients.''

Doctors who complained about not being paid were told to order more tests, according to the U.S. Attorney's Office.

The company's Irvine headquarters was raided by federal authorities in 2017.

``Our nation's healthcare system cannot tolerate kickbacks to physicians while criminals line their pockets with taxpayer-funded healthcare dollars, particularly in light of our nation's current struggles with the COVID- 19 pandemic,'' said Acting Special Agent in Charge Omer Meisel of the FBI's San Diego Division.

Matthews is scheduled to be sentenced Oct. 26. He faces a maximum penalty of five years in prison and a $250,000 fine, according to the U.S. Attorney's Office.