The United States settled a False Claims Act case brought by two of our clients against Genexe, LLC d/b/a Genexe Health, its parent company Immerge, Inc., and two of the companies’ control persons and owners, Jason Green and Jason Gross. Under the terms of the Genexe settlement, Genexe, Immerge, Gross and Green will collectively pay $6 million plus interest to resolve the allegations of genetic testing fraud.
The fraudulent conduct was brought to light by multiple FCA qui tam cases filed by several whistleblowers, including two of our clients. The whistleblowers collectively will receive a relators’ share award of approximately $1.3 million from the settlement. Defendants are also paying the Relators’ reasonable attorneys’ fees and costs.
After investigating the claims raised in the relators’ FCA qui tam complaints, the United States alleged that during 2018 and 2019, Genexe, Immerge, Green, and Gross assisted with and caused to be submitted false claims to Medicare for CGx and PGx tests that were not medically necessary and that were procured through kickbacks. offered and paid to a network of independent contractors (IBOs), medical laboratories, medical providers, and telemedicine healthcare providers. Medicare does not cover clinical laboratory tests that are not medically necessary or that are tainted by kickbacks.
Genexe would obtain the genetic samples (usually from a cheek swab of saliva) for the CGx and PGx tests along with Medicare beneficiaries’ protected health care information and a physician order for the genetic test and send the Medicare beneficiary’s specimen and information to the laboratories for testing. Laboratories then billed Medicare for the fraudulent genetic testing and were regularly reimbursed at rates exceeding $6,000 per test. Once Medicare paid the medical laboratory, Genexe would receive a portion of the Medicare reimbursement funds from the laboratory; initially, Genexe was paid about $800 per swab, but later was paid amounts ranging from $1,000 to $2,000 depending on the type of genetic test.
This settlement is particularly notable because Jason Green and Jason Gross, two individual officers and owners of the companies, were held accountable by the United States and will collectively pay the settlement amount along with the companies. Green and Gross served, respectively, as the Chief Executive Officer and Chief Operating Officer of Genexe and Immerge, and they controlled and had ownership interests in the companies.
In the press release announcing the settlement, government officials emphasized the importance of identifying and ending genetic testing fraud scams.
Genetic testing fraud preys on the fears of patients, and it wastes taxpayer dollars by spending limited funds on medically unnecessary or nonexistent tests. This settlement shows we will work with our law enforcement partners to investigate fraud, waste, and abuse in federal healthcare programs and will use every tool available to recover improperly paid taxpayer funds.
United States Attorney David Metcalf
Medical professionals should only order testing which would benefit individual patient care, not for personal gain.
Maureen Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services
Whistleblower Law Collaborative commends the outstanding efforts of their clients and the government prosecutors.
It was a privilege to represent two clients who were willing to come forward to alert the government to a national fraud scheme which preyed on elderly victims and cost taxpayers millions of dollars. The settlement announced today is a testament to the skill, resolve, and stamina of an outstanding team of government attorneys and investigators who put an end to that scheme and held those who profited accountable for their actions.
Bruce C. Judge, Partner, Whistleblower Law Collaborative
This is the third settlement of a genetic testing fraud FCA case brought by a client of WLC. We began sounding the alarm about genetic testing scams in 2018. Without the courage of whistleblowers, scams like this would go undetected.
MORSECORP, Inc. has agreed to pay $4.6 million, plus interest, to resolve allegations that it made false representations concerning compliance with required cybersecurity controls for safeguarding sensitive government information. This settlement is particularly notable because it represents the first major False Claims Act settlement with a defense contractor based on failures to implement required cybersecurity controls.
MORSECORP d/b/a MORSE (Mission Oriented Rapid Solution Engineering), which is based in Cambridge, Massachusetts, is a defense contractor in the U.S. National Security Ecosystem. MORSE performed multiple contracts for the Department of the Army and the Department of the Air Force, among other government customers.
The case was brought by our client in January 2023 based on his concerns that MORSECORP had not fully implemented cybersecurity controls required under NIST SP 800-171 for protecting sensitive government data and information. Our client was also concerned that MORSECORP did not have a consolidated system security plan and that MORSECORP was using third-party cloud-based services that did not meet the relevant Federal security requirements. In addition, our client was concerned that MORSECORP had posted improperly inflated SPRS assessment scores with the Defense Department for its internal cybersecurity practices and policies.
Our client brought the MORSECORP cybersecurity failures to the attention of the government by filing a cybersecurity qui tam complaint under the False Claims Act. Under the False Claims Act, a private citizen (known as a “relator”) who suspects or knows of fraud against the government can act as a whistleblower and file a sealed complaint on behalf of the government. If the case is successful, the relator is entitled to a share – between 15% and 30% – of the government’s recovery.
The government investigated the allegations brought to light by our client and, on March 17, 2025, filed a notice of its intention to intervene against MORSECORP for the purpose of settlement. The Department of Justice further described the case and the $4.6 million settlement on March 25, 2025.
Federal contractors must fulfill their obligations to protect sensitive government information from cyber threats, We will continue to hold contractors to their commitments to follow cybersecurity standards to ensure that federal agencies and taxpayers get what they paid for, and make sure that contractors who follow the rules are not at a competitive disadvantage.
— United States Attorney Leah B. Foley.
Protecting the integrity of Department of Defense (DoD) procurement activities is a top priority for the DoD Office of Inspector General’s Defense Criminal Investigative Service (DCIS). Failing to comply with DoD contract specifications and cybersecurity requirements puts DoD information and programs at risk. We will continue to work with our law enforcement partners and the Department of Justice to investigate allegations of false claims on DoD contracts.
— Special Agent in Charge Patrick J. Hegarty, DCIS Northeast Field Office
Our client expresses his admiration for, and appreciation of, the outstanding efforts of the Commercial Litigation Branch of the U.S. Department of Justice, the U.S Attorney’s Office for the District of Massachusetts, and the relevant investigating agencies for conducting a thorough and prompt investigation which led to the settlement announced yesterday.
In uniform and out, protecting the national security of the United States has been the focus of my professional career. Becoming a whistleblower was not an easy decision and one I only took when I felt I had no remaining option to protect sensitive government information. The Department of Justice should be commended for acting promptly to investigate and put an end to practices that placed sensitive government information and data at risk of loss or compromise.
–WLC Client
Whistleblower Law Collaborative commends the outstanding efforts of their client and the government prosecutors. Attorney Bruce C. Judge praised his client’s willingness to stand his ground on protecting sensitive government information. Mr. Judge also cited his client’s courage in coming forward without regard to the professional and personal risks that can attach to being a whistleblower. Mr. Judge continued,
[O]ur client drew on his extensive knowledge of the applicable cybersecurity requirements and was able to identify numerous cybersecurity gaps clearly and persuasively to government prosecutors and agents.
This settlement marks an important milestone in the government’s long-running efforts to bring about cybersecurity compliance in the Defense Industrial Base. After many years of issuing warnings and relying on self-certifications, the MORSECORP settlement sends a clear signal that government contractors who fail to implement required cybersecurity controls can expect to face significant financial penalties. It also signals that individuals who bring cybersecurity violations to the government’s attention can receive a share of the government’s ultimate recoveries.
In 2021, the Department of Justice launched its Civil Cyber-Fraud Initiative aimed at federal contractors who fail to comply with government cybersecurity requirements. In addition, the initiative targets contractors who fail to report breaches or other cybersecurity incidents.
We expect the Department of Justice, the Department of Defense, NASA, and other government agencies to continue to investigate and prosecute matters involving failure to implement required cybersecurity controls to safeguard sensitive government information and data.
In October, 2022, the United States settled a False Claims Act case brought one of our clients against DermaTran Health Solutions, LLC, a compounding pharmacy based in Rome, Georgia, its parent State Mutual Insurance Company, President Delos Yancey, and other defendants. Under the Agreement, Defendants agreed to pay over $6.87 million to resolve allegations that they violated the False Claims Act by waiving copays, charging the government higher prices than permitted, and trading federal healthcare business with other pharmacies.
As alleged in our Complaint,Yancey caused State Mutual Insurance subsidiaries to bankroll DermaTran Health Solutions, LLC, to sell “compounded” pain creams. Compounded drugs are drugs created by a pharmacy pursuant to a doctor’s order. These are often described as “custom” made formulations, but the vast majority of DermaTran’s compounds consisted of a very few formulations. Another State Mutual Insurance Company subsidiary named Pharmacy Insurance Administrators, LLC (“PIA”), was created to handle the billing for DermaTran.
Compound pain creams were very lucrative. Government-backed health insurance programs such as TRICARE (for the military) and the Federal Employees Health Benefits Program (for federal workers) would often reimburse thousands of dollars for these prescriptions. But the government programs imposed certain restrictions to limit spending. Most notably, these programs require that pharmacies charge them no more than the “usual and customary price”—or the price it would charge to cash-paying, uninsured patients.
In the interests of profit, the defendants ignored these restrictions. For example, they would represent to TRICARE that the hundreds or thousands of dollars they charged veterans was the “usual and customary” price for that drug. However, defendants regularly, and often the same day, sold the exact same prescription for as little as $30 when a patient’s insurance would not pay. Similarly, defendants utilized various schemes to avoid charging copays to patients to make them indifferent to the high prices they charged insurers. In some instances, DermaTran sales personnel offered and paid kickbacks to doctors to induce them to write prescriptions to the pharmacy.
Eventually, insurers began to terminate DermaTran from their networks. To keep the scheme alive, DermaTran, began transferring prescriptions to other pharmacies which kicked back part of the proceeds to DermaTran. Three other pharmacies, also named as defendants, participated in this prescriptions-trading scheme and settled claims: Legends Pharmacy (in Texas), Lake Side Pharmacy (in Alabama), and TriadRx (in Alabama).
Under the terms of the False Claims Act settlement, PIA contributed $6.5 million plus interest to the settlement. It also paid damages to our client for retaliating against her, which is illegal under the FCA.
DermaTran was sold to a third-party, the proceeds of that sale were also turned over to the government as part of the settlement. Legends Pharmacy will pay $59,293. TRIAD Rx, Inc. will pay $166,547. Lake Side Pharmacy is no longer in business, but former owners of Lake Side Pharmacy will pay $110,724.
The affected Government Agencies praised the settlement and thanked our client for coming forward:
Waiving copays and charging the government higher prices leads to overutilization and costs federal programs millions of dollars in unnecessary spending, Our office will continue to enforce the False Claims Act to recover government payments that result from such misconduct.
Northern District of Georgia U.S. Attorney Ryan Buchanan.
Health care fraud abuse like this case erodes the trust patients have in the health care system, the FBI will not stand by when there are allegations of companies operating corporate wide schemes to illegally line their pockets.
Keri Farley, Special Agent in Charge of FBI Atlanta.
Fraud through compounding pharmacies bilked billions out of TRICARE and undermined the integrity of our healthcare system designed to care for our service members and their families, I appreciate the partnership among involved law enforcement agencies and the U.S. Attorney’s Office to bring this matter to justice.
Cynthia Bruce, Special Agent in Charge of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service (DCIS).
The OPM OIG has no tolerance for businesses that knowingly take advantage of FEHBP, violating the rules to make a profit, I am extremely proud of the hard work of our investigators, analysts, and other law enforcement partners because overcharging the government is not a victimless crime – it contributes to higher premium prices and harms the financial integrity of the FEHBP.
Amy K. Parker, Special Agent in Charge, OPM OIG.
The U.S. Postal Service, Office of Inspector General, will continue to tirelessly investigate those who commit frauds against federal benefit programs and the U.S. Postal Service. This settlement is a clear message that the USPS OIG is dedicated to rooting out corruption and bringing to justice those responsible for these crimes, The USPS OIG would like to thank our law enforcement partners and the Department of Justice for their efforts in this investigation.
Special Agent in Charge Matthew Modafferi of the U.S. Postal Service, Office of Inspector General Northeast Area Field Office.
Health care providers that try to boost their profits by submitting fraudulent claims to Federal health care programs threaten the integrity of those programs and drive up prices for everyone, we work tirelessly alongside our law enforcement partners to protect the integrity of Federal health care programs and to ensure the appropriate use of taxpayer dollars.
Tamala E. Miles, Special Agent in Charge with the U.S. Department of Health and Human Services Office of Inspector General.
Our client was hired by State Mutual Insurance Company to provide accounting services for Dermatran. While there, she repeatedly expressed concerns about the practices she witnessed. However, after being repeatedly ignored by her employers she approached our firm to ask for assistance in providing government prosecutors with information about the alleged fraud. In 2017, we filed a complaint under the federal False Claims Act.
Under the False Claims Act, a private citizen (known as a “relator”) who suspects or knows of fraud against the government can act as a whistleblower and file a sealed complaint on behalf of the government. If the case is successful, the relator is entitled to a share – between 15% and 30% – of the government’s recovery.
In this case, our client will receive $1,434,775 or nearly 21% of the funds received by the government in addition to a payment from defendants as compensation for their retaliation against her.
The process of this suit was long, stressful and sometimes scary – but it was necessary. When you see people in business who take advantage of the system, without regard to the harm it causes to veterans, hard-working citizens, and taxpayers, you can’t stand by silently. I am grateful to my amazing legal team, for standing by my side throughout.
As this case illustrates, whistleblowers are a critical part of fraud enforcement. Last year, according to DOJqui tam cases resulted in over $1.6 billion in False Claims Act recoveries. The False Claims Act is one of the government’s most powerful tools to combat health care fraud.
Whistleblower Law Collaborative LLC attorney David W. S. Lieberman praised the outstanding work of Assistant U.S. Attorneys Anthony DeCinque, Neeli Ben-David, and Armen Adzhemyan. “This was an extremely complex fraud, but the attorneys in the Northern District of Georgia worked hand in glove with relator to understand the scheme and bring the case to a successful resolution.”
WLC attorneys Bruce Judge and Suzanne Durrell added their appreciation for WLC’s courageous client who sounded the alarm on this important issue. “Our client could easily have kept silent about the fraud she witnessed, but she did the right thing and came forward to tell the government about a serious fraudulent scheme that was draining millions from veterans and other vulnerable patients. We view this settlement as a clear vindication of her difficult choice to come forward.”
The Whistleblower Law Collaborative is also grateful for the assistance provided by our co-counsel, Julie Bracker and Jason Marcus of Bracker and Marcus and Joshua Russ and Allison Cook of Reese Marketos.