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Dallas Laboratory, Owners, and Investors Pay $24M to Resolve COVID-19 Testing Fraud Allegations

Magnolia Diagnostics, a clinical laboratory based in Dallas, Texas, and its owners, John Bains and Kelly Bains, have agreed to pay the United States $19.2 million to resolve allegations that they violated the False Claims Act by billing Medicare for medically unnecessary respiratory pathogen panel testing performed on seniors receiving COVID-19 tests.

More About This Action

Action Details

  • Date:July 23, 2026
  • Agency:U.S. Department of Justice and U.S. Attorney's Office, Northern District of Texas
  • Enforcement Types:
    • Criminal and Civil Actions