Thanks, Scoutmaster. Excellent info. Are you a lawyer?
Four executives at Damon were indicted for conspiracy: Joseph Isola, Beno Kon, William Thurston and Gerald Kullen.
It was more complicated than I wrote.
For example, Damon took an End-Stage Renal Disease panel and would 'unbundle' it into two different tests and submit them on different days.
And this is another part of it (there were a lot of tentacles). From U.S. v. Thurston (do you want the full cite?):
The essence of the scheme charged was that Damon, through Thurston and others, bundled the ferritin blood test-previously ordered by doctors less than two percent of the time-into a panel of blood tests known as the LabScan, which was ordered thirty to forty percent of the time. When doctors or patients (instead of insurers) paid for the bundled LabScan, Damon provided the ferritin test for free, leading doctors to believe there was no extra charge for this test. Doctors were not told that, when Medicare paid for the bundled LabScan, Medicare was charged extra for the ferritin test. Indeed, both a letter and marketing materials indicated the added ferritin test was free; that is, that there was no charge beyond the standard LabScan charge.
Those unnecessary ferritin tests were not free to Medicare.
Damon charged Medicare roughly $21 per ferritin test on top of the approximately $24 charged for the LabScan. Nor were doctors told that the ferritin test could be ordered separately; the test requisition form did not offer that option. The physicians, then, were induced to order and to certify as medically necessary a large number of ferritin tests that were not medically necessary.
There were LDS overtones. In U.S. v. Thurston (a different case), No. 05-2271 (5th Cir., July 26, 2006), the Court noted that:
"Isola accepted the government's offer, but Thurston and another codefendant declined Thurston rejected the offer because a guilty plea "would cause him to be shunned in the Mormon church."
Thurston was found guilty and for sentencing purposes was found to be "an organizer or leader of extensive criminal activiity" (a level-four enhancement). So he would be the organizer or leader of a fraud that the government said "involved literally millions of fraudulent claims" over a period of years - but wouldn't plead guilty as another defendant did because he would be shunned.