The Justice Department’s lawsuit against Capstone Diagnostics executives Jay Johnson and Austin Whiles is accompanied by a separate indictment filed against Johnson. This is a great example of the DOJ’s new two-step approach to civil and criminal investigations.
DOJ alleges unlawful kickbacks and medically unnecessary testing, including respiratory panels associated with COVID-19 testing. A separate indictment related to genetic testing was filed against Johnson individually. Capstone’s earlier civil settlement expressly preserved criminal liability and liability of other individuals. For anyone facing a similar investigation, the implications are significant: a settlement involving your company may leave your personal exposure unresolved, and a civil investigation does not mean criminal charges are off the table. DOJ announcement and settlement agreement. The Government may even get your company to cooperate against you in a later Criminal Investigation.
If your laboratory, collection business, or medical practice receives a subpoena or civil investigative demand, the government may already be examining who authorized testing, approved compensation arrangements, or influenced billing decisions. DOJ policy permits coordinated civil and criminal investigations, making it essential to understand both forms of exposure before providing substantive explanations or testimony. Your defense should establish what you personally knew, what responsibilities you held, and what clinical, billing, or compliance guidance informed your decisions. For COVID-era testing, that includes examining the rules applicable to the particular services and dates. Early counsel can preserve this evidence, identify supported defenses, and present relevant context before the government reaches conclusions about your conduct. DOJ’s policy on parallel investigations.
My approach to these investigations begins with a practical objective: protecting your ability to respond effectively while pursuing opportunities to avoid criminal charges and limit civil exposure. That requires examining the records, testing the government’s assumptions, and distinguishing your actions from those of other participants. Where the evidence supports it, early advocacy can provide a basis for prosecutors to decline charges or consider an appropriate civil resolution.
No outcome is guaranteed, but waiting for an indictment can mean losing an important opportunity to influence the charging decision, preserving records, developing favorable witness testimony. If investigators have contacted you about laboratory billing, COVID-19 testing, or referral arrangements, contact my office to discuss your defense before providing substantive statements or testimony.