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by JENN WOOD
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A former Greenville, South Carolina laboratory executive and two former senior employees have been indicted in federal court on allegations they orchestrated a multi-million dollar healthcare fraud scheme tied to COVID-19 testing during the height of the pandemic.
A federal grand jury in Greenville returned a 16-count indictment (.pdf) charging Kevin S. Murdock, 56, Thomas C. Lee, 56, both of Greenville, and Vidhya V. Narayanan, 45, of Atlanta with conspiracy to commit health care fraud and substantive health care fraud offenses tied to testing performed through Greenville-based Premier Medical Laboratory Services.
According to prosecutors in the office of U.S. attorney Bryan Stirling, Murdock owned and operated Premier Medical Laboratory Services, while Lee and Narayanan served as officers and high-level employees within the company. Federal prosecutors allege the three defendants devised what they describe as a “multi-part scheme” to fraudulently generate revenue from federal health benefit programs connected to pandemic testing.
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HOW THE ALLEGED SCHEME WORKED
Court records claim Premier processed COVID-19 tests as a subcontractor for eTrueNorth, a nationwide testing contractor working through federal partnerships established by the U.S. Department of Health and Human Services (HHS).
One core allegation centers on “pooling” — a laboratory practice in which multiple samples are combined and processed through a single test. While pooling can increase speed and efficiency, prosecutors said Premier concealed that practice from customers and billing entities when contracts required individual testing.
According to the indictment, Premier allegedly submitted billing as though each sample had been tested individually, even when multiple samples were run together in a single pooled result, causing false claims to be submitted to the federal government for thousands of tests.
Federal prosecutors also alleged the defendants manipulated internal software thresholds used to determine whether COVID-19 test samples registered positive results.
Those threshold adjustments, according to the indictment, were made after contamination issues emerged inside the lab. Prosecutors allege the changes lowered instrument sensitivity, masked contamination, increased the likelihood of false negatives, and rendered hundreds of thousands of test results unreliable — even as the company continued billing Medicare, TRICARE and other insurers as though the tests remained valid.
The indictment stated that some of the resulting tests were “virtually worthless” and ineligible for reimbursement.
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SPECIFIC COUNTS IDENTIFY INDIVIDUAL TESTS
Beyond the conspiracy count, the indictment laid out 15 separate health care fraud counts tied to specific dates in 2021.
Those counts alleged Premier submitted claims involving individual patient samples that were either pooled despite being billed as single tests or processed using manipulated threshold settings while still billed as valid COVID-19 diagnostics.
Several counts specifically referenced tests billed through eTrueNorth and federal HHS reimbursement channels, while others involve claims billed through TRICARE.
Federal prosecutors state the overall scheme generated millions of dollars in unwarranted payments from government healthcare programs.
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PRIOR CIVIL LIABILITY ALREADY ESTABLISHED
The criminal indictment followed earlier civil action against Murdock.
According to the U.S. Attorney’s Office, he previously agreed to a $27,544,460 consent judgment, acknowledging there was a likelihood he would be found liable in civil claims brought by the United States and the states of South Carolina, Georgia and Colorado.
That civil matter involved alleged violations of the federal False Claims Act, as well as parallel state Medicaid fraud statutes.
Each defendant now faces:
- up to 10 years in federal prison per count,
- fines of up to $250,000, and
- supervised release following any prison sentence.
The indictment also included forfeiture allegations, allowing the government to seek recovery of proceeds and substitute assets if convictions are obtained.
The case was investigated by the Federal Bureau of Investigation (FBI) and the U.S. Department of Health and Human Services Office of Inspector General.
Assistant U.S. attorney Bill Watkins is prosecuting the case.
As with all federal indictments, the charges remain allegations only. All three defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in federal court.
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THE INDICTMENT…
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ABOUT THE AUTHOR …
As a private investigator turned journalist, Jenn Wood brings a unique skill set to FITSNews as its research director. Known for her meticulous sourcing and victim-centered approach, she helps shape the newsroom’s most complex investigative stories while producing the FITSFiles and Cheer Incorporated podcasts. Jenn lives in South Carolina with her family, where her work continues to spotlight truth, accountability, and justice.
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