Published on:

StethoscopeThe Lexington County Health Services District (“Lexington Medical Center” or “LMC”) located in West Columbia, South Carolina, has agreed to pay $17 million dollars to resolve allegations that it violated the Physician Self-Referral Law (the “Stark Law”) and the False Claims Act (“FCA”) by maintaining improper financial arrangements with 28 physicians.

The FCA is a federal statute that allows whistleblowers, or “relators,” to bring qui tam lawsuits on behalf of the United States government and against their employers who commit fraud against the government.

The action was initiated by Dr. David Hammett, a former physician at Lexington Medical Center. He filed his FCA lawsuit in 2013. FCA suits are filed “under seal,” and the government has 60 days to elect to intervene. If the lawsuit is successful, no matter if the government chose to intervene, and the government recovers money from a fraudulent contractor, the whistleblower who is the source of the information stands to take-home a considerable portion of the government’s recovery.

Published on:

Govt-Health-Insurance-PolicyOnce a start-up, now a Johnson & Johnson subsidiary, Acclarent Medical will pay $18 million to settle a False Claims Act (“FCA”) suit that alleged its medical sales division promoted its devices to physicians for “off-label” uses and provided those physicians “kick-backs” in exchange for their business. Acclarent Medical describes itself as a medical device company “dedicated to the development of innovative devices providing new technologies to meet the needs of ENT patients.” The company is based in Menlo Park, California and markets products throughout the United States.

The False Claims Act is a federal statute that allows “whistleblowers” to bring lawsuits against government contractors who fraudulently overbill the government for goods or services.

False Claims Act lawsuits are brought under seal, and the Department of Justice has the opportunity to intervene and prosecute the action on behalf of the whistleblower if it so chooses. If the suit is successful, and funds are recovered for the government, regardless of the if the government decides to intervene, the whistleblower receives a substantial portion of the government’s recovery.

Published on:

New-York-City2-300x200Columbia University will pay $9.5 million dollars to settle a False Claims Act suit that alleged the university routinely overcharged federal agencies for medical research.

The False Claims Act (“FCA”) allows whistleblowers to bring allegations under seal against companies and institutions that fraudulently bill the federal government. After filing, the government has the option to “intervene” and control the suit itself. If the whistleblower’s suit is successful, as it was here, the whistleblower is entitled to a portion of the government’s recovery. Whistleblowers typically receive 15-30% of the government’s take.

The government’s complaint alleges that Columbia impermissibly applied its “on-campus” research cost rate instead of the substantially lower “off-campus” rate when seeking federal reimbursement for 423 National Institutes of Health (“NIH”) grants where the research was primarily performed at  facilities owned by the state of New York or other academic institutions.

Posted in:
Published on:
Updated:
Published on:

The-Pentagon-150x150 2The United States Department of Justice filed a False Claims Act (“FCA”) complaint against DynCorp, International alleging that the company overcharged the federal government to train Iraqi police forces.  DynCorp, which is headquartered in McLean, Virginia, is a large logistics, transportation, and military-services subcontractor and is used extensively by the U.S. government and foreign governments to transport and provide goods and services to combat zones.

In an FCA suit, individuals (“whistleblowers”), file lawsuits on behalf of the government with allegations that fraud has been committed against a federal government program.  Whistleblowers, if successful, are entitled to share in any recovery received by the government.  Here, the government filed a suit on its own behalf.

In April 2004, the State Department’s Bureau for International Narcotics and Law Enforcement Affairs awarded a contract to DynCorp to provide training for local police in Iraq.  The contract included appropriations for other services needed to support the recruitment of officers—trainers, guards, translators, vehicles, and living quarters for contractor personnel.

Published on:

Supreme-Court-Pillars-Exterior-150x150The government has elected to intervene in a False Claims Act (“FCA”) suit filed by West Virginia internet provider, Citynet, against competitor Frontier Communications.  The suit alleges that Frontier misused $40.5 million dollars in federal stimulus funds to build a high-speed internet network designed solely to rig the West Virginia market in its favor.

In an unusual twist, the suit names West Virginia state officials – Homeland Security Chief Jimmy Gianato, Chief Technology Officer Gale Given, and former Commerce Secretary Kelly Goes – as defendants, alleging they were complicit with Frontier’s scheme to defraud the federal government and suppress competition within the state.

The False Claims Act allows individuals (“whistleblowers”) to file lawsuits with allegations that fraud has been committed against the federal government.  Whistleblowers can be people, or businesses, like Citynet, and are entitled to share in any recovery received by the government.

Published on:

dollar-billThe U.S. Attorney for the Central District of California recently settled a False Claims Act (“FCA”) lawsuit with the information technology company En Pointe Gov. for $5.8 million dollars.

The lawsuit alleged that En Pointe Gov. fraudulently represented itself as a small business in order to bid on government contracts that were specifically set-aside for small businesses.  En Pointe Gov. did not meet small business qualifications.

The case was filed in 2014 in the Central District of California by Minburn Technology Group, LLC and whistleblower Anthony Colangelo, who is the managing member of Minburn. Minburn subcontracted with EnPointe to provide database IT-services.

Published on:

Healthcare-Shredder-150x150Evercare Hospice and Palliative Care will pay $18 million dollars to resolve False Claims Act allegations brought by two whistleblowers.  The plaintiffs in the qui tam case were former employees of the company.  Evercare, now known as Optum Palliative and Hospice Care, is a Minnesota-based provider of hospice care in Arizona, Colorado, and other states across the United States.

The False Claims Act (“FCA”) allows the government to recover damages and penalties of three times those damages. The fraudulent government contractor is also hit with an $11,000 penalty per false claim.  In November, those penalties per claim will raise to nearly $22,000.

In an FCA suit, individuals (“whistleblowers”), file lawsuits on behalf of the government with allegations that fraud has been committed against a federal government program.  Whistleblowers, if successful, are entitled to share in any recovery received by the government.

Published on:

Doctor-with-Checklist-150x150United States Attorney Beth Drake announced today that the U.S. Attorney’s Office for the District of South Carolina has settled claims of health care fraud with Drayer Physical Therapy Institute, LLC (“Drayer”) for $7.1 million dollars.  Drayer has physical therapy centers in South Carolina and 14 other states from Pennsylvania to Oklahoma.

Former employees alleged that Drayer submitted claims to Medicare and Federal Employee Health Programs for services provided to multiple patients simultaneously, and “up-charged” the programs as though the services were being provided by a physical therapist to one patient at a time.

The investigation into Drayer’s questionable billing practices began because whistleblowers filed a qui tam law suit under the False Claims Act. The suit was filed by former Drayer physical therapists.

Published on:

Stethoscope-300x199 2Martin E. Cutler, M.D., an ophthalmologist with offices in Woburn and Gloucester, Massachusetts, has agreed to pay $55,000 to resolve allegations that his company submitted false claims to Medicare.  Medicare pays only for services that are “reasonable and necessary for the diagnosis or treatment of illness or injury.” The program covers specific eye procedures only when they are medically necessary.

Since ophthalmologists are physicians under Massachusetts law, and are regulated by the Massachusetts Board of Registration in Medicine, Cutler is regulated as a physician under the Medicare reimbursement rules.

Brian Sachs, a Boston-based medical consultant, “blew the whistle” on his former client and filed his qui tam False Claims Act lawsuit in Federal District Court in 2013.

Published on:

Bank-ManagerA West Palm Beach, Florida-based mortgage company has agreed to a $30 million settlement to rid itself of False Claims Act violation allegations. Ocwen Financial Corp will pay $15 million to the federal government and $15 million to cover the attorneys’ fees and costs incurred by whistleblowers who brought the False Claims Act case.

Ocwen Financial, formed in 1988, has been servicing residential mortgage loans since that year, and has serviced “subprime” mortgages since 1994. The company holds 671,623 residential loans worth more than $102.2 billion. The company also owns commercial assets totaling $290.9 million.

The False Claims Act (“FCA”) is a federal statute that allows whistleblowers, or “relators,” to bring qui tam lawsuits on behalf of the United States government and against their employers who are committing frauds against the government.