South Carolina Whistleblower Receives $1.36 Million for Reporting False Claims at a Clinical Laboratory
From August 2018 to November 2021, South Carolina company Clinical Laboratory LTD Holding LLC, formerly known as Labtech Diagnostics LLC (Labtech), and its founder and CEO Joseph Labash, allegedly paid doctors kickbacks in return for referrals, in violation of the Federal Claims Act and Anti-Kickback Statute. Labtech agreed to pay $6.8 million to the United States, and the whistleblower-relator, Mahmoud Altwam, was awarded $1.36 million.
Mahmoud was Labtech’s Chief Operating Officer when he observed fraud in the form of kickbacks from the CEO to doctors in return for referrals and use of the lab for clinical tests. The kickback scheme incentivized physicians to refer patients to Labtech for services, when then inflated the testing costs in false claims to the government. The lawsuit alleged that Labtech falsified office rental and lab records to disguise the kickbacks.
Kickbacks to induce referrals or use of particular healthcare products or facilities are forbidden by the Anti-Kickback Statute. Such kickbacks are potentially federal crimes. Claims for services or products ordered as a result of an illegal kickback are false claims that can be exposed via a whistleblower lawsuit under the False Claism Act.
South Carolina law does not include a False Claims Act with a provision allowing relators to sue on behalf of the state, but Labtech’s fraud extended to both Medicaid funds, which uses funding, and Medicare. Since the kickbacks involved false claims for federal funds by a South Carolina company, Mahmoud filed his claim under the federal FCA.
The FCA is a powerful tool against fraud. In the press release announcing the Labtech settlement, Bryan Stirling, U.S. Attorney for the District of South Carolina, said, “Every dollar spent, and every decision made in health care must prioritize the patient’s well-being and care. We will continue to work with our partners to pursue those engaged in illegal kickback schemes and hold them accountable.”
If you suspect wrongdoing involving federal funds, you don’t have to stay silent—South Carolina and federal law offers both protections and, in some cases, rewards if you take action. If you’re considering becoming a whistleblower in South Carolina, Miller Law Group has the depth of experience and commitment you need to guide you through your whistleblower journey.
Sources:
- Office of Public Affairs Press Release: South Carolina Laboratory Pleads Guilty and Agrees to Pay At Least $6.8M to Settle Allegations of Kickbacks to Doctors (January 7, 2026) https://www.justice.gov/opa/pr/south-carolina-laboratory-pleads-guilty-and-agrees-pay-least-68m-settle-allegations
- United States ex rel. Altwam v. Labtech Diagnostics LLC, et al., No. 8:21-cv-2844 (D.S.C.).
