Lawsuit unsealed in Los Angeles Superior Court alleges that Sterling Pathology Medical Corporation and its owner, Dr. Changgao Yang, engaged in a widespread scheme to submit false and fraudulent claims for phantom COVID-19 testing
LOS ANGELES, CA, April 14, 2026 /24-7PressRelease/ — A civil enforcement action filed in Los Angeles Superior Court alleges that Sterling Pathology Medical Corporation and its owner, Dr. Changgao Yang, engaged in a widespread scheme to submit false and fraudulent claims for COVID-19 testing, resulting in more than $20 million in improper payments from state healthcare programs and private insurers.
The complaint, brought on behalf of the State of California, alleges that Defendants systematically billed for tests that were not performed, medically unnecessary procedures, and “phantom” COVID-19 testing during the height of the pandemic. The action further alleges the use of unlawful kickbacks and third-party patient recruiters to obtain insurance information and generate claims.
According to the allegations, Defendants exploited emergency COVID-19 programs by submitting claims tied to individuals who were not properly tested or who were recruited through improper means. The complaint alleges that these practices resulted in significant financial harm to public healthcare systems and contributed to increased costs borne by taxpayers.
The lawsuit further alleges that certain communities were targeted through coordinated outreach efforts designed to obtain patient information for billing purposes, rather than legitimate medical testing.
“This case concerns alleged misuse of public health programs at a time when resources were critically needed,” said counsel for Plaintiff. “The complaint alleges a deliberate scheme to extract payments for services that were not lawfully rendered.”
The action seeks recovery of damages, civil penalties, and other relief under applicable California law.
The matter is pending as State of California v. Sterling Pathology Medical Corporation et al., Los Angeles Superior Court Case No. 21STCV00923.
Contact:
Law Offices of Gloria Juarez
Gloria Juarez, Esq.
gloria@thegjlaw.com
(949) 288-3402
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