MOBILE, AlabamaWALA) – The owner of a Spanish Fort laboratory pleaded guilty Wednesday to conspiring to defraud Medicare of millions of dollars through fraudulent invoices – including thousands of deaths.

James Matthews Thornton “Bo” Potter pleaded guilty to a single count of conspiracy to violate the federal anti-kickback statute. The maximum sentence is five years in prison, although prosecutors agreed to recommend leniency. His sentencing is set for April 30.

Potter’s attorney, Josh Briskman, said he expects sentencing guidelines to call for a prison term in the range of two and a half years and hopes for a lighter sentence. He said his client believed admitting guilt was best for his family.

“This was a difficult decision for Mr Potter,” he said. “This limits his exposure.”

According to Potter’s written plea agreement, he co-owns laboratories in Spanish Fort and Birmingham. Although the plea document lists the companies as Lab-1 and Lab-2, a related forfeiture lawsuit identifies the Baldwin County company as Gulf Coast Molecular Laboratories.

The plea document states that in late 2022 or early 2023, co-conspirator Brian Cotugno introduced Potter to an individual identified as Individual-1. Although he never met in person, Potter agreed to pay Cotugno bribes for the “lead packets” the conspirators used to bill Medicare through the two laboratories. He and Individual-1 wired more than $8 million to a bank account controlled by Cotugno, according to court records.

The forfeiture complaint pegs Medicare reimbursements for the test kits at more than $13.8 million, or 99% of all Medicare reimbursements to the company. Federal authorities have begun investigating after receiving thousands of complaints against Gulf Coast Molecular Laboratories from Medicare beneficiaries who said they received COVID-19 test kits that they did not request.

Cotugno, who has a criminal record, pleaded guilty in April to participating in the Baldwin County scheme. He awaits the sentence. He pleaded guilty in 1991 to a federal cocaine charge and a judge sentenced him to 10 years and one month in prison, according to court records.

Prosecutors alleged the defendants took advantage of a federal program to provide free COVID-19 test kits — at a cost of $94.08 per kit to taxpayers — to Medicare beneficiaries. But the federal government has asked these beneficiaries to apply for the kits.

The main packages Potter received each contained the name and personal information of a Medicare beneficiary, as well as an audio recording purporting to be the patient requesting a COVID-19 test kit.

Neither the Spanish Fort nor the Birmingham lab had billed children tested for COVD-19 until last year. Yet Potter admitted that from February to May of last year, his labs billed Medicare for testing kits on behalf of more than 200,000 Medicare beneficiaries — including thousands who had died.

According to the plea agreement, Medicare reimbursed the labs nearly $20 million for the testing kits.

No one at either lab contacted Medicare beneficiaries to confirm that they had ordered COVID-19 test kits, and no one even sent any of the children tested during the date ranges listed in the act charges, according to the plea document. Instead, according to the plea agreement, Cotugno received fees for arranging distribution of the tested children. Some Medicare beneficiaries received them; others don’t.

The plea document says Potter largely kept employees in the dark, telling them that “Brian” or someone else they had never met would take care of everything, according to court records.

Potter agreed to return more than $6.3 million to two bank accounts owned by Gulf Coast Molecular Laboratories and more than $38,000 to a bank account owned by the Birmingham lab.

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