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MassachusettsThe Attorney General of Massachusetts announced today that Canton-based environmental services company National Water Main Cleaning Co. (“NWMC”) has agreed to pay more than $650,000 to settle allegations that it submitted fraudulent bills and records on multiple public contracts for sewer, storage tank, and catch basin cleaning, maintenance, and repair in violation of the Massachusetts False Claims Act. The company also allegedly illegally discharged sewage and wastewater in violation of the Massachusetts Clean Waters Act. Under the terms of the settlement, NWMC will pay $405,000 to resolve the allegations it violated the state’s False Claims Act and $250,000 in civil penalties to resolve allegations that it violated the Massachusetts Clean Waters Act, of which $75,000 will be paid to the Massachusetts Natural Resource Damages Trust. NWMC will also be required to impose revised protocols regarding proper waste disposal and to provide comprehensive environmental compliance training for its employees. Continue reading

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Whistle-300x225On Wednesday, an Alabama federal court judge refused to dismiss a whistleblower’s complaint filed against Safety-Kleen Systems Inc. (“Safety-Kleen”) under the False Claims Act. The Texas-based provider of environmental services, oil re-refining, and responsible cleaning solutions allegedly overbilled the federal government for cleaning solvents used by a military depot. More specifically, the suit alleges that Safety-Kleen repeatedly billed Northeast Alabama’s Anniston Army Depot for the total potential amount of solvent used each week to clean military equipment, including unused non-spent solvent that the government had already paid for. Safety-Kleen earned nearly $635,000 over the life of the contract at issue, which covered a period extending from August 1, 2008 through July 31, 2013. The PD680II solvent was used at the Army Depot to degrease tanks, vehicles and small arms returning from overseas combat. Continue reading

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internal-auditOn Monday, the U.S. Department of Justice announced that the Research Foundation for the State University of New York (“SUNY”) has agreed to pay $3.75 million to settle allegations made by a number of relators that its Center for Development of Human Services (“CDHS”) violated the False Claims Act by manipulating the audits that it performed of federally funded health care programs in the state. The Research Foundation is a nonprofit educational corporation that administers grants and contracts that are awarded to university research projects by federal, state, and private entities. CDHS is a Research Foundation program headquartered at Buffalo State College, with offices in Albany, Buffalo, Syracuse, Rochester, and New York City. The complaint against the Research Foundation was filed in April 2010 by five of its former employees. The federal government then elected to intervene in the case. The relators will collectively receive $825,000, or 22%, of the total settlement for their role in uncovering the fraud. Continue reading

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Food-Safety-300x200On Monday, overseas military contractors pled guilty in federal court to criminal fraud in connection with overcharging the federal government for food and water supplied to soldiers in Afghanistan. Supreme Foodservice GmbH, a privately-held Swiss company, and Supreme Foodservice FZE, a privately-held United Arab Emirates company, (collectively “Supreme Foodservice”) will pay the government over $288 million, the maximum criminal fines allowed. In addition, the companies have agreed to pay $101 million to resolve a relator’s allegations of fraud pursuant to the False Claims Act. The relator will receive $16.16 million of the civil settlement for his role in uncovering the fraud. The companies fraudulently inflated the price charged for Local Market Ready goods and bottled water sold to the government under an $8.8 billion Subsistence Prime Vendor Contract for services through 2013. Continue reading

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College-classroomThe federal government and the state of Florida have filed a civil complaint under the False Claims Act, intervening in a relator’s case against FastTrain College (“FastTrain”). The now defunct Miami-based for profit chain of schools allegedly submitted fraudulent documents to the U.S. Department of Education on behalf of students in order to gain access to federal financial aid programs. The conduct allegedly occurred from at least January 1, 2009 through June 22, 2012 when the schools were closed. Over this period, the school and its students received $4.34 million in student loans and $2.2 million in federal Pell Grants. In October, the school, its owner, and three other employees were charged in a 15-count indictment for conspiring to steal government money. Continue reading

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Doctor-with-ChecklistThe U.S. Department of Justice announced today that North Atlantic Medical Services Inc. (“NAMS”), doing business as Regional Home Care Inc., has agreed to pay $852,378 to settle the allegations of two relators realtor’s that it had violated the federal False Claims Act and the Massachusetts False Claims Act by submitting claims to Medicare and Medicaid for respiratory therapy services provided by unlicensed personnel. From September 2010 through January 2013, NAMS had allegedly used unlicensed employees to set up and provide instructions for sleep apnea masks and oxygen therapy equipment for patients in Massachusetts, even after the state’s Department of Public Health informed the company that the practice was illegal. NAMS is a Massachusetts-based medical device company that provides equipment and services for the treatment of respiratory ailments, such as oxygen deficiency and sleep apnea. Continue reading

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Hospital_billingOn Tuesday, the state of Nevada and the federal government announced that they had elected to intervene in a complaint filed by two relators under the False Claims Act against Creekside Hospice II LLC (“Creekside”) that alleges that it aggressively lured non-terminally ill patients into its care in order to fraudulently seek reimbursement from Medicare and Medicaid since at least 2010. Creekside allegedly paid bonuses to employees who sold its inpatient services to people who did not have the requisite prognoses of six months or less to live and falsified patient medical records accordingly. The hospice received $66.56 million in payments from Medicare between April 2010 and March 2013, and an additional $4.73 million from the Nevada Medicaid program throughout the same period. Creekside’s hospice operations are primarily financed through the receipt of Medicare and Medicaid dollars, with approximately 90% of its revenue is derived from government health care programs. Continue reading

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EarthNew York-based Sevenson Environmental Services Inc. (“Sevenson”), an environmental remediation firm, has agreed to pay $2.7 million to settle allegations of kickbacks, bid-rigging, and rate inflations in connection with its contracts with the Environmental Protection Agency (“EPA”). The alleged violations of the False Claims Act more specifically stem from the prime contractor’s responsibility to clean up of the Federal Creosote Superfund Site in Manville, New Jersey. The EPA is an agency of the federal government created for the purpose of protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress. The agency also conducts environmental assessment, research, and education and is responsible for maintaining and enforcing national environmental standards. The settlement resolves allegations that Sevenson solicited and accepted kickbacks in exchange for the award of subcontracts, that it conspired with the subcontractors to pass the majority of those kickbacks onto the EPA, and that it conspired with one subcontractor to pass onto the EPA additional inflated charges for soil disposal.  Continue reading

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Department-of-Justice-200x300 3The U.S. Department of Justice announced today that it has recovered a record $5.69 billion in settlements and judgments from civil cases involving fraud and false claims against the government during the 2014 fiscal year, ending September 30. Historically, this is the first time the department has exceeded $5 billion in recoveries for cases brought under the False Claims Act, and brings total recoveries over the past five years to $22.75 billion. This total accounts for more than half of all recoveries since Congress amended the False Claims Act 28 years ago in order to strengthen the statute and increase the incentives for whistleblowers to file suit. Most false claims actions are filed under the statute’s qui tam provisions that allow individuals (known as whistleblowers or relators) to file suits on behalf of the government alleging fraud. The number of qui tam suits filed in fiscal year 2014 exceeded 700 for the second year in a row with whistleblowers receiving $435 million in rewards from the $3 billion recovered in cases that they initiated. Continue reading

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Hospital_billingA federal judge in California denied Prime Healthcare Services, Inc.’s (“Prime”) motion to dismiss a relator’s False Claims Act case alleging that the hospital group overcharged Medicare and Medicaid by more than $50 million. Prime was founded in 2001 by Dr. Prem Reddy. Thereafter, Prime engaged in a strategy of acquiring hospitals in financial distress and transforming them into financially stable businesses. Prime claims to have “saved” 29 hospitals. It operates 14 hospitals throughout California. In order to achieve some of these successes, Prime allegedly required hospital personnel to charge government health care programs the highest possible rates for patient admissions by falsely including comorbidities and complications including encephalopathy, septicemia, and malnutrition. Additionally, Prime allegedly eliminated less costly observation stays and refused to discharge patients to post-acute care centers in order to fraudulently increase its payments. Continue reading