Laboratory Executives and Physician Pay $2 Million to Settle Kickback Allegations

Former laboratory CEO Susan Hertzberg of New York and former laboratory sales executive Matthew Theiler of Pinehurst, North Carolina, have agreed to pay $1.2 million to resolve False Claims Act litigation with the United States, the Justice Department announced on June 1, 2026.

The payments resolve allegations that Hertzberg, Theiler and a physician made illegal kickbacks to doctors in exchange for referrals to their laboratory for testing services reimbursed by federal health care programs. A physician also agreed to pay part of the total $2 million-plus recovery.

The case falls under the department's broader enforcement initiative targeting laboratory kickback schemes.

The settlement changes the prior state in which the executives and physician faced active False Claims Act litigation. They now face a final monetary obligation with no admission of liability, while the government closes its civil recovery effort on these specific claims. The agreement takes effect immediately upon execution.

Downstream, the resolution requires the parties to report the payments to state licensing boards and federal exclusion authorities. The Department of Health and Human Services Office of Inspector General will now determine whether to impose program exclusions that bar the individuals from Medicare, Medicaid and other federal health programs.

Any laboratory or physician still receiving federal reimbursements for the referred tests must repay those amounts or face further False Claims Act exposure. The settlement also accelerates parallel criminal or administrative reviews that prosecutors can pursue independently of the civil case.

This settlement continues a series of Justice Department actions against laboratory owners and marketers accused of paying physicians for test referrals. The department has recovered hundreds of millions of dollars in similar Anti-Kickback Statute cases in recent years, many of which originated from whistleblower lawsuits filed under the False Claims Act.