The largest Medicaid fraud case in state history is over.

Burlington Labs will pay the Vermont Medicaid program $6.75 million in a settlement, the Vermont Attorney General’s Office announced Monday. The seven-year repayment plan includes fines as well as roughly $5 million to cover improperly billed charges. 

The settlement was expected, and it clears the path for an investor group headed by Jim Crook of Shelburne to purchase the locally grown drug-screening company on Burlington’s Main Street. Crook’s group had warned that the company could go under if it didn’t get a bailout — quickly.



State regulators green-lighted the purchase in August, pending the settlement agreement with the AG. 

The deal allows Burlington Labs cofounders Michael Casarico and his wife, Jodie, to retain an interest in a new version of the business going forward, but with additional scrutiny and compliance measures.

“This settlement balances the ongoing needs for drug-testing services in Vermont with ensuring proper billings for services rendered and safeguarding of state and federal monies,” Attorney General Bill Sorrell said in a statement. No criminal charges were filed.

Burlington Labs is a privately owned company that conducts drug and alcohol screening tests on recovering addicts and recently released inmates, among other clients.

The company violated a number of Medicaid rules from January 1 to June 30, 2015, according to the settlement. The company billed as much as $1,150 for drug screenings, and revenue surged without a corresponding increase in patients.

Burlington Labs received more than $12 million from the Vermont Medicaid program in 2015, after receiving only approximately $10 million over the previous five years combined.