that caused Medicare to pay millions of dollars for testing generated through unlawful kickbacks and without individualized treating-provider judgment. The complaint also seeks recovery under federal common-law theories against Johnson’s now-former wife, Sarah Haslock, and several affiliated entities that received funds allegedly derived from the conduct.
“Today’s complaint reflects the Justice Department’s steadfast commitment to combatting fraud in federal health care programs,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “Laboratory testing must be driven by patient needs, not financial incentives. We will continue to use the False Claims Act to hold accountable those who exploit Medicare for personal gain.”
“Johnson and Whiles allegedly took advantage of individuals at religious events residing and senior living facilities to line their pockets and drain millions of dollars from the Medicare trust fund,” said U.S. Attorney Theodore S. Hertzberg for the Northern District of Georgia. “This lawsuit reflects our commitment to recovering unlawfully diverted public money from anyone who defrauds the government and taxpayers.”
In the first alleged scheme, Johnson and Whiles used church-sponsored health fairs and religious conferences to generate genetic testing through unlawful kickbacks and without individualized treating-provider judgment. The complaint alleges that they directed Capstone personnel to swab attendees at mass events and then, without permission, used physician names, signatures, standing orders, and other paperwork to make the testing appear properly ordered and medically necessary. In the second, Johnson and Whiles allegedly exploited senior living communities’ demand for COVID-19 testing to generate larger reimbursing respiratory pathogen panels through community- and chain-wide standing orders, copied or altered physician signatures, standardized diagnosis codes, and order entry by sales personnel rather than treating providers.
The complaint further alleges that Whiles secretly captured millions of dollars in volume-based commissions generated by independent marketers by routing the money to himself through Whitson Medical, a company he owned and controlled. The complaint separately alleges that Johnson transferred millions of dollars derived from the schemes to his now-former wife, Sarah Haslock.
The United States previously reached settlements with Capstone and its owner, Drew Maloney, for $14.3 million and with Capstone’s billing company, VitalAxis, Inc. for $300,479 to resolve their potential civil liability under the False Claims Act arising from the alleged scheme. In addition, on Dec. 10, 2025, Jay Johnson was indicted in the Northern District of Georgia for conspiracy to commit health care fraud charges for his role in the church health fairs genetic testing scheme; his prosecution is currently pending.
The Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Northern District of Georgia are handling the matter with assistance from the United States Department of Health and Human Services, Office of Inspector General.
The lawsuit was originally filed under the qui tam or whistleblower provisions of the FCA. Under the FCA, private parties can file an action on behalf of the United States and receive a portion of the recovery. The FCA permits the United States to intervene in and take over the action, as it has done here. If a defendant is found liable for violating the FCA, the United States may recover three times the amount of its losses plus applicable penalties. The qui tam action is captioned United States et al. ex rel. Jesse Allen v. Capstone Diagnostics, LLC d/b/a Capstone Healthcare, No. 1:19-CV-5598-SEG.
One of the most powerful tools in the effort to combat health care fraud is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to HHS at 800-HHS-TIPS (800-447-8477).
This year, the Trump Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration’s war on fraud, waste, and abuse in federal programs. When unscrupulous actors exploit these programs for their own financial gain, they defraud the government, harm the people these programs are designed to aid and protect, and undermine American businesses that play by the rules. The Civil Division’s False Claims Act enforcement plays a critical role in combatting such fraudulent schemes, recovering billions of dollars for the American taxpayers, and holding wrongdoers accountable. False Claims Act matters will continue to be on the forefront of the battle against fraud, and the Civil Division’s False Claims work will support and advance the mission of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.
Associate Deputy Attorney General Paul Perkins, Fraud Section Trial Attorney Asha Natarajan, and Assistant U.S. Attorney Neeli Ben-David for the Northern District of Georgia are handling this matter.
The claims asserted in the complaint are allegations only. There has been no determination of liability.