Kyle Marcotte will forfeit $10.2 million, could be sentenced up to 20 years.
The owner of a Jacksonville substance abuse treatment center pleaded guilty Tuesday for his role in a $57 million money-laundering conspiracy associated with a billing scheme involving laboratory testing services.
Kyle Ryan Marcotte, 36, of Jacksonville Beach, pleaded guilty before U.S. Magistrate Judge Joel Toomey to a one-count information charging him with conspiracy to commit money laundering.
As part of his guilty plea, Marcotte agreed to a forfeiture judgment of $10,220,281.42.
Sentencing before U.S. District Judge Timothy Corrigan has not been scheduled. Under Title 18 of the U.S. Code, Marcotte could be fined up to $500,000 and sentenced to no more than 20 years in federal prison, or both.
Marcotte was a principal of Beaches Recovery Services LLC. About four years ago, he entered into an arrangement with a laboratory owner to send urine samples from the residential facility’s patients to the lab for drug testing in exchange for receiving 40% of the insurance reimbursements.
The lab owner, in turn, arranged with the managers of two rural hospitals, Campbellton–Graceville Hospital and Regional General Hospital Williston, to have the testing billed to private insurers and reimbursed at favorable rates under the hospitals’ in-network contracts with insurers.
Marcotte admitted that he brokered deals with other substance abuse treatment centers to have their drug testing billed through the hospitals in exchange for Marcotte receiving 10% of the insurance reimbursements.
The lab owner subsequently acquired Chestatee Hospital in Dahlonega, Georgia, and other rural hospitals.
Marcotte admitted that he continued to supply samples from his substance abuse treatment facility and continued to broker deals with other substance abuse treatment centers to have samples tested at the lab and billed to insurers through Chestatee and the other hospitals, all in exchange for a percentage of the insurance reimbursements. The reimbursements were transmitted from the hospitals to the lab, which then transmitted them to two companies Marcotte controlled, North Florida Labs and KTL Labs, using bank accounts that Marcotte had established to facilitate the payments.
Marcotte arranged to transfer a portion of the reimbursements from KTL Labs as kickbacks to the people and companies that controlled the treatment centers in order to further the fraudulent scheme. In addition, Marcotte transferred a portion of the reimbursements to himself to purchase real estate and items of real property, he admitted.
Marcotte caused $50 million in payments to be made from KTL Labs’ bank accounts to at least 88 companies and individuals associated with substance abuse treatment centers that supplied urine samples for testing.
Marcotte told prosecutors the total amount of money that was involved in the money-laundering scheme was $57.3 million.
Trial attorneys Gary Winters and James Hayes of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Tysen Duva are prosecuting the case.