The state of California has decided to intervene in a relator’s complaint filed under the state’s False Claims Act alleging that London-based BP plc (“BP”) and its subsidiaries defrauded taxpayers by inflating natural gas prices under their contractual arrangements as the exclusive supplier to the state of California and its subdivisions. The complaint was unsealed on Wednesday. BP is one of the world’s largest energy companies and it is the largest supplier of natural gas in North America. It had contracts with California’s Department of General Services (“DGS”) under the Natural Gas Services (“NGS”) program. Between 2004 and 2012, BP and its subsidiaries allegedly charged California many times more than what its non-governmental customers were charged. The fraudulent overcharges are claimed to have amounted to between $150 million and $300 million of the $2 billion in natural gas supplied to the program during the period in question. Continue reading
The U.S. Department of Justice announced today that CareAll Management LLC and its affiliated entities (“CareAll”) have agreed to pay $25 million, plus interest, to the United States and the state of Tennessee to settle a relator’s allegations that the home health provider violated the False Claims Act by submitting fraudulent and upcoded home health care billings to the Medicare and Medicaid programs. The settlement resolves conduct that allegedly occurred between 2006 and 2013 where CareAll overstated the severity of its patients’ conditions in order to increase the billing of, and in turn the reimbursement for, services that were not medically necessary and were rendered to patients who were not in fact homebound. The company had allegedly predetermined its desired profit margins and billed government health care programs accordingly to hit those targets. The wrongdoing was claimed to have permeated all branches of the CareAll system throughout Tennessee. Continue reading
On Friday, the United States Attorney for the Western District of Oklahoma and the Attorney General for the State of Oklahoma jointly announced that Ocean Dental, P.C. has agreed to pay $5 million to settle civil claims stemming from allegations that it violated the False Claims Act by submitting fraudulent Medicaid claims. Oklahoma-based Ocean Dental operates 28 clinics in seven states. As part of its practice, it provides dental services to patients, including children, covered by the Oklahoma’s Medicaid program. The federal government and the state of Oklahoma specifically alleged that Ocean Dental submitted false claims for payment to the Oklahoma Medicaid program for dental restorations that took place during the period from January 1, 2005 through September 30, 2010. Claims for dental restorations furnished to Medicaid beneficiaries by Ocean Dental’s then-employee Robin Lockwood, D.D.S., were false because they were either not performed, or upcoded by billing for more restored surfaces than were actually performed. Continue reading
The U.S. Department of Justice announced yesterday that Jacksonville-based North Florida Shipyards and its president will pay the federal government $1 million to resolve a relator’s allegations that they violated the False Claims Act by creating a fraudulent company in order to win contracts from the U.S. Coast Guard intended for Service Disabled Veteran Owned Small Businesses (“SDVOSB”). In order to qualify as a SDVOSB on Coast Guard ship repair contracts, a company must be owned and managed by service disabled veterans, and must perform a majority of the labor. Ind-Mar Services Inc. (“Ind-Mar”), however, was allegedly set up to serve as a sham contracting vehicle. The company allegedly had no employees or facilities and North Florida Shipyards actually performed all of the work and received all of the profits under the awarded contracts. As a result of the scheme, Ind-Mar was falsely awarded contracts to repair five ships between 2010 and 2013. Continue reading
The U.S. Attorney’s Office for the Southern District of New York announced today that the United States filed a civil fraud complaint against Columbia University alleging that the university submitted false claims in connection with federal grants that it received to fund work done by its International Center for AIDS Care and Treatment Programs (“ICAP”). The complaint served as notice of the government’s election to intervene in a relator’s case that alleged that, Columbia University, as the grand administrator on behalf of ICAP, received millions of dollars in federal grants and, pursuant to the rules applicable to such grants, was required to use adequate procedures to verify that the employees had actually performed the work charged to a particular grant. The university, however, while allegedly aware that this verification was not being done, charged federal grants for work not devoted to the grant’s corresponding project. Continue reading
Yesterday, a federal judge in Illinois refused to dismiss the majority of a relator’s allegations brought under the False Claims Act against Northrop Grumman Corporation (“Northrop”). The complaint alleges that the global security company and one of the largest defense contractors in the world defrauded the federal government in connection with a program designed to create technology to protect commercial aircraft from missile attacks. The program was initiated after two shoulder-fired missiles almost hit an Israeli commercial airline taking off from Kenya. The Counter-Man Portable Air Defense System Development and Demonstration Program (“Counter-MANPADS”) would allegedly be used to as a way to protect civilian airplanes from terrorist attacks. But, under its “best efforts” contract with the government, Northrop allegedly fraudulently represented that it was doing its best to complete tasks in order to falsely collect payments for project milestones.
The U.S. Department of Justice announced today that DaVita Healthcare Partners, Inc. (“DaVita”) has agreed to pay nearly $400 million to resolve allegations that it violated the False Claims Act by paying kickbacks to induce the referral of patients to its dialysis clinics. DaVita is headquartered in Denver, Colorado and is one of the leading providers of dialysis services in the United States with dialysis clinics across 46 states and the District of Columbia. DaVita had allegedly identified physicians or physician groups that had significant patient populations suffering from renal disease and offered them lucrative opportunities to partner with the company by acquiring or selling an interest in the dialysis clinics to which their patients would be referred to for treatment. DaVita also allegedly ensured referrals of these patients to the clinics using a series of secondary agreements with the physicians.
On Monday, the False Claims Act trial against Trinity Industries (“Trinity”) was scheduled to restart in federal court in Texas after a mistrial was declared in July, attributed in part to the judge’s “serious concerns” over a company official’s truthfulness while under oath. The case was initiated on behalf of the government in 2012 by relator Joshua Harman, who is alleging that the Texas-based company failed to disclose to the Federal Highway Administration that it made a small change in the design of the guardrails that it sells to state highway departments across the United States. This failure to receive pre-approval has allegedly led to Trinity’s fraudulent receipt of hundreds of millions of dollars in reimbursements, predicating liability under the False Claims Act. According to the company’s 2013 annual report, its sales of highway products, including guardrails, amounted to $336 million. If liable, Trinity could be forced to pay close to $1 billion in damages and penalties.
The U.S. Department of Justice announced on Friday that the Boeing Company (“Boeing”) has agreed to pay $23 million to the federal government to settle allegations made by a number of relators that the aerospace and defense industry giant submitted false claims for labor charges in connection with its contracts with the U.S. Air Force to maintain, repair, and modify the C-17 Globemaster aircraft. Boeing is the world’s largest combined manufacturer of commercial jetliners and military aircraft and the world’s second largest defense company. The C-17 Globemaster aircraft, which is both manufactured and maintained by Boeing, is one of the military’s major systems for transporting troops and cargo throughout the world. The whistleblowers will collectively receive $3.9 million for their role in the litigation. The settlement came as a result of the unsealing of the complaint and the government’s election to intervene in the case. Continue reading
This week, Bristol-Myers Squibb Co. (“BMS”) and Otsuka America Pharmaceutical Inc. (“Otsuka”) asked a federal court judge in Ohio to dismiss a complaint filed against them by two relators that alleges that the pharmaceutical companies offered illegal kickbacks to physicians in order to induce them to promote off-label uses of the antipsychotic drug Abilify. Induced prescriptions for off-label uses are not eligible for reimbursement by government health care programs. The kickbacks allegedly violated the Anti-Kickback Statute. Both allegations predicate liability under the False Claims Act. Two former sales representatives employed by BMS are specifically alleging that, beginning in 2005, the companies engaged in a nationwide scheme to fraudulently promote Abilify to doctors of pediatric and geriatric patients. Aripiprazole, marketed jointly by BMS and Otsuka as Abilify, generated sales of over $6 billion in 2013. Such sales make it one of the highest-grossing prescription drugs worldwide. Continue reading