BloodLab Owner Receives 4-Year Sentence for Gambling-Fueled Federal Scheme

(AsiaGameHub) –   A Southern California man, identified as A.M., has been sentenced to 51 months in a Los Angeles federal court following an extensive Medicare fraud operation that resulted in $11.2 million in unpaid taxes.

In addition to his prison term, Judge John A. Kronstadt has mandated that the defendant pay $15.16 million in restitution.

Fake Lab Ownership – Real Money to Spend

A.M. entered a guilty plea in 2025 to charges of healthcare fraud, wire fraud, and tax evasion. Prosecutors recommended a reduced sentence due to his cooperation. He was initially taken into custody in April 2024 at LAX while attempting to depart for Armenia.

Operating between 2015 and 2023, the scheme funneled illicit proceeds into A.M.’s personal expenses and gambling habits.

A.M. confessed to utilizing a straw man to maintain legal ownership of the Burbank-based blood testing facility, Genex Laboratories. Because he was prohibited from receiving Medicare reimbursements, he used this front to continue collecting payments.

He funneled the proceeds into an account held by an associate, L.S., paying him $2,000 monthly to maintain the facade before withdrawing the funds for his own use. During this period, A.M. consistently underreported his earnings to the IRS, claiming an annual income of approximately $40,000.

Prosecutors stated that A.M. failed to disclose $23.9 million in taxable income, causing a loss of $11.2 million in federal taxes, plus an additional $3.9 million in interest.

The associate, L.S., was also implicated in the tax evasion scheme.

A.M. provided L.S. with fabricated financial records suggesting that Genex was either unprofitable or barely breaking even. L.S. subsequently submitted these documents to his tax preparer, who filed returns based on the fraudulent data provided by A.M.