A 59-year-old businessman from Raleigh, North Carolina, has pleaded guilty in federal court to orchestrating a massive $60 million healthcare fraud scheme. James Shuford Price III entered his plea to charges of paying illegal kickbacks for medical referrals to his California-based laboratory and filing a false federal income tax return. The fraudulent operation systematically milked public health programs using fabricated test specimens and stolen identities from multiple medical professionals.
According to court documents, Price owned and operated Golden Star Labs (GSL), a diagnostic testing facility located in Los Angeles, California. Between August 2023 and June 2025, GSL submitted more than $85 million in false claims to the California Medical Assistance Program (Medi-Cal) and over $11 million in fraudulent claims to Medicare.
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The Per-Specimen Kickback Pipeline
The multi-million dollar extraction network focused on billing public insurance programs through a structured pipeline detailed in image_14710b.png. The sequence initiated with a sourcing beneficiaries phase, where Golden Star Labs (GSL) deployed third-party networks known as “collectors” across California and nearby areas to gather test specimens from eligible Medi-Cal and Medicare beneficiaries. Following this, the operation shifted to volume-based inducements under Price’s direct control, where GSL unlawfully compensated these collectors on a per-specimen basis to aggressively maximize volume. Between August 2023 and January 2025, GSL funneled more than $17 million in kickbacks to these illicit suppliers.
The process then moved to identity theft infiltration, as the collectors, in return for the high payouts, supplied GSL with thousands of fake test samples obtained through fraudulent means, including identity theft. Finally, the scheme relied on fabricated authorizations, where during the first six months of the operation, approximately 96% of GSL’s Medi-Cal claims anchored entirely to forged test authorizations stemming from a single out-of-state physician whose identity had been stolen and misused.
Phony Contracts and Covered Trails
The investigation revealed that when operational patterns raised internal billing red flags in February 2024, Price purported to pause GSL’s testing services for a month under the guise of cleaning up administrative errors. However, when operations restarted in March 2024, the lab resumed the exact same illicit practices. From late March 2024 through January 2025, approximately 92% of GSL’s Medi-Cal billings were anchored to fake test authorizations generated via the stolen professional credentials of five separate clinicians.
To cover up the illegal billing practices, Price instructed GSL to draft formal, written contracts with the collectors. These sham agreements specified fixed-fee structures and explicitly prohibited volume-based referral compensation to project an illusion of legal compliance. Behind the scenes, however, the per-specimen kickback architecture remained entirely intact to keep millions of dollars flowing from federal and state health insurance pools into GSL’s corporate accounts.
Seizures, Tax Evasion, and Legal Consequences
During the joint multi-agency investigation, the FBI and the U.S. Attorney’s Office successfully tracked down and seized more than $6 million in liquid assets directly attributable to the fraud. Price also pleaded guilty to filing a false federal income tax return for the 2022 calendar year, as investigators discovered he intentionally failed to report revenue generated from multiple secondary streams—including cash extracted from victims during a separate, prior investment scam.
At his upcoming sentencing hearing, Price faces a statutory maximum penalty of 13 years in federal prison, a $500,000 fine, and three years of supervised release. In addition to active prison time, the court will require Price to pay full restitution to the Centers for Medicare & Medicaid Services, Medi-Cal, and the Internal Revenue Service (IRS). U.S. Attorney Ellis Boyle strongly condemned the multi-year operation, labeling the theft of taxpayer dollars meant for legitimate medical beneficiaries as a profound violation of public trust, promising that the state will continue to aggressively hunt down and imprison high-dollar healthcare fraudsters. FBI Special Agent in Charge Reid Davis further noted that orchestrating a $60 million Medicare fraud scheme represents a profound violation of public trust.
