MOBILE, Ala. (WALA) – The owner of a laboratory in Spanish Fort pleaded guilty Wednesday to conspiring to defraud Medicare of millions of dollars through fraudulent invoices involving thousands of dead people.

James Matthews Thornton “Bo” Potter pleaded guilty to a single count of conspiracy to violate the federal anti-kickback law. The maximum penalty is five years in prison, although prosecutors recommended leniency. His sentence will be determined on April 30.

Potter’s attorney, Josh Briskman, said he expected the sentencing guidelines to call for 2.5 years in prison and hoped for a lighter sentence. He said his client believed pleading guilty 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-owned laboratories in Spanish Fort and Birmingham. Although the plea document lists the businesses as Lab-1 and Lab-2, a related forfeiture lawsuit identifies the business in Baldwin County as Gulf Coast Molecular Laboratories.

The plea document states that in late 2022 or early 2023, co-conspirator Brian Cotugno introduced Potter to a person identified as Individual-1. Although they never met in person, Potter agreed to pay Cotugno kickbacks for “lead packets” that the conspirators used to bill Medicare through 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 alleges that Medicare reimbursements for the test kits amounted to more than $13.8 million; That’s 99 percent of all Medicare reimbursements to the business. Federal officials have launched an investigation into thousands of complaints against Gulf Coast Molecular Laboratories from Medicare recipients who say they received COVID-19 test kits they did not want.

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

Prosecutors alleged that the defendants took advantage of a federal program to provide free Covid-19 testing kits to Medicare recipients at a cost to taxpayers of $94.08 per kit. But the federal government required these beneficiaries to request the kits.

Each of the lead packages Potter received contained a Medicare beneficiary’s name and personal information, as well as an audio recording of the patient allegedly requesting a COVID-19 testing kit.

Neither the laboratory in Spanish Fort nor the laboratory in Birmingham had billed for any COVD-19 testing children before last year. But Potter admitted that from February to May of last year, his laboratories billed Medicare for test kits on behalf of more than 200,000 Medicare recipients, including thousands of people who died.

Under the plea agreement, Medicare reimbursed the laboratories about $20 million for the test kits.

According to the indictment, no one from either lab contacted any of the Medicare recipients to confirm that they had ordered COVID-19 test kits, and no one even sent test children during the date ranges listed in the indictment. Instead, according to the plea agreement, Cotugno received a fee for arranging the distribution of test children. Some Medicare recipients received them; others did not.

The charging document says Potter largely kept his employees in the dark, telling them “Brian” or another person they had never met before would handle everything, according to court records.

Potter agreed to turn over more than $6.3 million in two bank accounts belonging to Gulf Coast Molecular Laboratories and more than $38,000 in a bank account belonging to the Birmingham laboratory.

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