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Arlington Heights firm used DNA from elderly fearing cancer in Medicare fraud, feds say

Kyle McLean, 36, who pleaded guilty to fraud, was part of a nationwide ring that used DNA swabs from old people who thought it was a cancer-detection test, prosecutors say.

Kyle McLean.
Kyle McLean.
Cook County sheriff’s office

An Arlington Heights company tricked hundreds of people into giving DNA samples that were used without their knowledge in a multimillion-dollar Medicare fraud scheme, federal authorities say.

Privy Health employees visited senior centers, churches and synagogues to convince people to provide DNA swabs taken from their mouths, according to prosecutors.

The donors were told the swabs would be tested for genetic markers to help determine their chances of getting cancer. Some were offered $75 gift cards for the swabs.

Prosecutors say the tests were part of a scam targeting Medicare, the federal health insurance program for seniors and the disabled. They say the DNA scam exploited elderly people’s curiosity about genetic science and their fears of cancer.

Kyle McLean, who ran Privy Health, is awaiting sentencing for his role in the scheme after pleading guilty earlier this year to conspiracy to commit healthcare fraud.

According to court records, McLean previously had been sentenced, in 2014, to three years in the Illinois state prisons for forging the names of other real estate appraisers on documents used in mortgage transactions. His appraiser’s license also was revoked.

In the Medicare case, McLean, 36, of Arlington Heights, and four out-of-state men are charged with defrauding Medicare out of more than $4.6 million.

Efforts to reach McLean’s attorney for comment were unsuccessful.

The investigation resulted in the arrests last year of 35 people nationwide, and more than $2.1 billion in Medicare fraud was identified, according to the Justice Department.

In one of the biggest cases resulting from the investigation, a man in Georgia has been charged with defrauding Medicare of $154 million through testing labs he owned. Federal prosecutors in Florida, where he’s charged, have said they’ll try to recover that money — along with the man’s red Ferrari 388 Spider.

In the case involving McLean, prosecutors say a Florida physician whose title was medical director of Privy Health submitted fake information so Medicare would pay for the DNA tests. They say Dr. Matthew Ellis told Medicare he was ordering the tests for his “patients.” But he never met the people who provided the samples and signed paperwork falsely indicating they had personal or family histories of cancer, authorities say.

Medicare paid the labs for the tests, which cost more than $6,000 apiece. The testing labs shared some of the money they received from Medicare with McLean, Ellis and the other defendants, according to federal authorities.

Since mid-2018, Privy Health received $789,000 in kickbacks, McLean got $87,000 directly, and another company tied to McLean got $32,000, prosecutors say.

Privy Health promoted its DNA testing program on social media. Here is a testing kit shown on the company’s Twitter account.
Privy Health promoted its DNA testing program on social media. Here is a testing kit shown on the company’s Twitter account.
Twitter

According to prosecutors, the people who agreed to give DNA samples frequently weren’t even given the results of their tests.

“Several months I went in and did the testing and I was promised a $75 Visa gift card, which I still have not received,” wrote one woman who reviewed Privy Health on a social-media site in 2018. “Nothing but lies!”

In February, the Better Business Bureau revoked the company’s accreditation.

The federal charges against McLean and the other defendants were filed in New Jersey. One of Ellis’ supposed patients was living in New Jersey, and Ellis wasn’t licensed to practice medicine there, prosecutors said.

One other man charged in the case has pleaded guilty. Charges are pending against Ellis and two other men.

According to Florida health licensing authorities, Ellis has an active medical license with no disciplinary action or public complaints on his record.

He couldn’t be reached for comment.

Federal officials say they targeted the Medicare fraud operation in a nationwide investigation called Operation Double Helix — referring to the structure of DNA molecules.