This letter concerns the deceptive business practices of Frank and Holly Magliochetti, who conduct business as Grace Health Technology and Grace Lab Development Corp, among others. They purport to be a CLIA-certified laboratory offering genetic testing for a variety of diseases, including cancer and cardiac conditions.
Mr. Magliochetti approached me in June, 2020 and asked if I would like to market for his company. Due to health industry regulations, his laboratory was unable to perform its own marketing. As I already owned a successful marketong company, he figured we would be a good match.
We would be expected to develop our own leads, and then market his company’s genetic testing services to interested consumers. He stated that he would write up a contract based on fair market value for our services. After the first 30-days, the contract would be adjusted based on our expected business. The contract was mutually signed on October 20, 2020.
No adjustment was made after the first 30 days, and in fact, we did not receive any compensation for our work until May 21, 2021, a full seven months after we mutually signed the contract and began work. There were many unfulfilled financial commitments made during that seven-month period by both Frank and Holly.
There was also a litany of misleading information provided by Frank to us regarding the business model. For example, he informed us that approximately 65% of all enrolled patients would eventually bill through insurance. In actuality, that figure was closer to 15-20%. Only about 20-25% of patients’ physicians will sign-off on a genetic testing requisition form that they themselves did not initiate.
Of that number, about 75% of genetic testing kits are completed correctly and returned to the lab. We had developed a system to ensure the highest possible number of successful kit returns, but, since we were only able to work with 20-25% of all of the patients we enrolled, there was no way we could sustain this business.
Had Frank been honest about these ratios, there is no way we would have ever gotten involved with him. We also retained a consultant that told us several tomes they were never going to be able to actually give us a safe harbor contract as we agreed to because they themselves were only a marketing company NOT the actual lab as purported. They referenced out well over 70 percent of their tests which is a violation of Medicare guidelines.
We took copious notes while we were developing a business plan with Frank and Holly, and continued to take notes during the course of business. The consultant with medical and insurance industry experience continuously helped us evolve into to this field.
Once we began to enroll patients, we noticed a disturbing trend regarding communication between our companies. Before we officially entered a business and fiduciary relationship, communication was fluid, and questions were answered swiftly.
Suddenly we would often wait days for answers regarding procedures and their CRM usage. AOnce we actually began enrolling patients for them however, that changed. We began to feel like a burden when we would ask questions.
As our business relationship progressed, we learned that the actual genetic testing wasn’t even performed at their “laboratory.” They used different reference labs (Frank involved with all in some capacity) to perform the tests. This contradicts what we were told upon the formation of our business relationship, and further explains why their “industry-standard” payment schedule was about half of the actual industry-standard.
Since CMS does not allow contracts to be structured in such a way as to value them on a “per-kit” or “per-deal” basis, fair market value terms and safe-harbor agreements are established. We never received a safe-harbor agreement, which makes sense now, as they were not the actual laboratory performing the tests.
Based on a very conservative estimate of the amounts billed to Medicare and other insurances for the kits that went to “the lab”, we calculated a minimum of well over $2,000,000 billed in a seven-month period. Their first offer to us was $20,000.00 per month for our services, which, per government regulations, could be renegotiated one time per year.
This represented roughly 10% of actual billings to date, with an expected significant increase in future billings going forward. Of course, based on their business model, it was not feasible for them to pay us a more appropriate amount, as they were not the laboratory performing the test and therefore not being paid as such.
The industry standard would have been three to four times that amount. They were more or less a level above us in a pyramid that they designed to deceive and defraud us and other marketers they used to sustain their business.
Every time we approached Frank and Holly about appropriate remuneration for our services, they “suggested” that we wait, so that we can build up our business before establishing a higher monthly aggregate fee for our marketing services. While this at first seemed to be honorable on their part, we later discovered that this was simply a tactic to delay paying us for our work.
Eventually, on May 13, 2021, after numerous delays and reschedules, we met with Holly to discuss the future of our business relationship. She was aware that we were highly upset about not being paid for our work, and knew that we were considering terminating our agreement. Suddenly, for the first time in our seven months of working together, she had concerns about one of our patient phone calls.
There were zero phone-call compliance issues brought up prior to this date. She stated that her compliance officer had some issues with this particular call, and decided that it would be in the best interest of all parties to terminate the business relationship.
This was a shocking development, as once we became adamant about past due payments, an “issue” suddenly popped up. After doing some research on other companies that Frank and Holly worked with, we found that this is a common theme in their “business practices.”
They also attempted to file a fraudulent assault and extortion charge with the Delray Police. Accused me of sexually assaulting their son 2 years prior, and Frank stated in text he was working with DCS to somehow have our child taken away and fostered with a man he said was his real Father. These prople are a perfect example of Evil hiding in plain sight using the Catholic Church as a shield.
Genetics Institute of America Reviews
To Whom It May Concern:
This letter concerns the deceptive business practices of Frank and Holly Magliochetti, who conduct business as Grace Health Technology and Grace Lab Development Corp, among others. They purport to be a CLIA-certified laboratory offering genetic testing for a variety of diseases, including cancer and cardiac conditions.
Mr. Magliochetti approached me in June, 2020 and asked if I would like to market for his company. Due to health industry regulations, his laboratory was unable to perform its own marketing. As I already owned a successful marketong company, he figured we would be a good match.
We would be expected to develop our own leads, and then market his company’s genetic testing services to interested consumers. He stated that he would write up a contract based on fair market value for our services. After the first 30-days, the contract would be adjusted based on our expected business. The contract was mutually signed on October 20, 2020.
No adjustment was made after the first 30 days, and in fact, we did not receive any compensation for our work until May 21, 2021, a full seven months after we mutually signed the contract and began work. There were many unfulfilled financial commitments made during that seven-month period by both Frank and Holly.
There was also a litany of misleading information provided by Frank to us regarding the business model. For example, he informed us that approximately 65% of all enrolled patients would eventually bill through insurance. In actuality, that figure was closer to 15-20%. Only about 20-25% of patients’ physicians will sign-off on a genetic testing requisition form that they themselves did not initiate.
Of that number, about 75% of genetic testing kits are completed correctly and returned to the lab. We had developed a system to ensure the highest possible number of successful kit returns, but, since we were only able to work with 20-25% of all of the patients we enrolled, there was no way we could sustain this business.
Had Frank been honest about these ratios, there is no way we would have ever gotten involved with him. We also retained a consultant that told us several tomes they were never going to be able to actually give us a safe harbor contract as we agreed to because they themselves were only a marketing company NOT the actual lab as purported. They referenced out well over 70 percent of their tests which is a violation of Medicare guidelines.
We took copious notes while we were developing a business plan with Frank and Holly, and continued to take notes during the course of business. The consultant with medical and insurance industry experience continuously helped us evolve into to this field.
Once we began to enroll patients, we noticed a disturbing trend regarding communication between our companies. Before we officially entered a business and fiduciary relationship, communication was fluid, and questions were answered swiftly.
Suddenly we would often wait days for answers regarding procedures and their CRM usage. AOnce we actually began enrolling patients for them however, that changed. We began to feel like a burden when we would ask questions.
As our business relationship progressed, we learned that the actual genetic testing wasn’t even performed at their “laboratory.” They used different reference labs (Frank involved with all in some capacity) to perform the tests. This contradicts what we were told upon the formation of our business relationship, and further explains why their “industry-standard” payment schedule was about half of the actual industry-standard.
Since CMS does not allow contracts to be structured in such a way as to value them on a “per-kit” or “per-deal” basis, fair market value terms and safe-harbor agreements are established. We never received a safe-harbor agreement, which makes sense now, as they were not the actual laboratory performing the tests.
Based on a very conservative estimate of the amounts billed to Medicare and other insurances for the kits that went to “the lab”, we calculated a minimum of well over $2,000,000 billed in a seven-month period. Their first offer to us was $20,000.00 per month for our services, which, per government regulations, could be renegotiated one time per year.
This represented roughly 10% of actual billings to date, with an expected significant increase in future billings going forward. Of course, based on their business model, it was not feasible for them to pay us a more appropriate amount, as they were not the laboratory performing the test and therefore not being paid as such.
The industry standard would have been three to four times that amount. They were more or less a level above us in a pyramid that they designed to deceive and defraud us and other marketers they used to sustain their business.
Every time we approached Frank and Holly about appropriate remuneration for our services, they “suggested” that we wait, so that we can build up our business before establishing a higher monthly aggregate fee for our marketing services. While this at first seemed to be honorable on their part, we later discovered that this was simply a tactic to delay paying us for our work.
Eventually, on May 13, 2021, after numerous delays and reschedules, we met with Holly to discuss the future of our business relationship. She was aware that we were highly upset about not being paid for our work, and knew that we were considering terminating our agreement. Suddenly, for the first time in our seven months of working together, she had concerns about one of our patient phone calls.
There were zero phone-call compliance issues brought up prior to this date. She stated that her compliance officer had some issues with this particular call, and decided that it would be in the best interest of all parties to terminate the business relationship.
This was a shocking development, as once we became adamant about past due payments, an “issue” suddenly popped up. After doing some research on other companies that Frank and Holly worked with, we found that this is a common theme in their “business practices.”
They also attempted to file a fraudulent assault and extortion charge with the Delray Police. Accused me of sexually assaulting their son 2 years prior, and Frank stated in text he was working with DCS to somehow have our child taken away and fostered with a man he said was his real Father. These prople are a perfect example of Evil hiding in plain sight using the Catholic Church as a shield.