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Model-House-on-MoneyA former human resources director of American International Group, Inc. (“AIG”) has asked a New York federal judge for permission to amend his False Claims Act complaint against the multinational insurance company, alleging that it defrauded the federal government in connection with the restructuring of the debt that it owed as a result of the bailout. Relator Alex Grabcheski claims that, as a result of AIG’s misrepresentations, the interests in American Life Insurance Co. (“ALICO”) and American International Assurance Limited (“AIA”) that the government acquired were allegedly worth at least $100 million less than what the government had “paid” for them in debt reduction. The amount of debt reduction was based on the valuations of the two subsidiaries, and the valuations were inflated because they were based on the assumption that the facts regarding ALICO and AIA’s business and operations were accurate. Continue reading

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Stethoscope1-300x199Three relators are alleging that AIDS Healthcare Foundation Inc. (“AHF”) violated the federal False Claims Act, the Florida False Claims Act, and the Anti-Kickback Statute through a fraudulent scheme to generate consumer demand for its programs. It was allegedly designed to defraud Medicare, Medicaid, and HIV/AIDS grant programs sponsored by the Health Resources and Services Administration and the Centers for Disease Control and Prevention—two agencies located within the U.S. Department of Health & Human Services. AHF allegedly conducted an organization-wide effort across at least twelve states to enhance funding from the government by paying financial inducements to employees and patients in order to generate referrals to AHF’s various service centers, including clinical services, insurance services, pharmacy services, and testing services. According to the complaint, improper billing in just a single year was estimated to exceed $20 million. AHF is a California corporation headquartered in Los Angeles, California. In addition to Florida and California, AHF conducts operations in at least ten other states. The company describes itself as a global organization providing cutting-edge medicine and advocacy to more than 200,000 patients in 28 countries. AHF is also the largest provider of HIV/AIDS medical care in the U.S. Continue reading

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Billing1-300x200 2Frontier Home Health and Hospice LLC (“Frontier”) filed a complaint yesterday against Amedisys Holding, L.L.C. and Amedisys, Inc. (collectively, “Amedisys”), alleging that the company lied about its fraudulent billing of Medicare in the sale of a group of Wyoming hospices to Frontier. Frontier allegedly learned after it acquired the business that Amedisys had routinely billed Medicare, contrary to law, for patients who were not eligible for hospice care coverage. Frontier purchased the hospices on an expedited timeline and had to rely on Amedisys’ representations about the company. Upon conducting further review, Froniter allegedly discovered that Amedisys had effectively implemented a bonus system incentivizing employees to keep ineligible patients in hospice care and that half of the Medicare hospice patients it inherited from Amedisys didn’t meet the six-month prognosis requirements for receiving such care. Continue reading

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Shipping-ContainersToday, a federal judge in Florida granted a joint motion to dismiss a case filed under the False Claims Act against Southeastern Aluminum Products Inc. (“Southeastern”) following its settlement with the federal government and the relator that filed the complaint. The Florida-headquartered manufacturer of bath enclosures and shower doors agreed to pay a $650,000 settlement after it allegedly conspired with other companies to avoid anti-dumping and countervailing duties on aluminum products from the People’s Republic of China (“PRC”). Southeastern, C.R. Laurence Co. Inc. (“CRL”), and Waterfall Group LLC (“Waterfall”) allegedly tried to avoid the duties by shipping aluminum extrusions manufactured by Tai Shan Golden Gain Aluminum Products Ltd. (“Tai Shan”) though Malaysia, a practice known as “transshipping.” In February, the U.S. Department of Justice announced that CRL had agreed to pay $2.3 million to settle the allegations and Waterfall had agreed to pay $100,000. The relator received more than $555,000 as his share of the aggregate settlement amounts. Continue reading

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Hedge-Fund-Manager-Holding-MoneyA qui tam complaint unsealed in New York federal court this week alleges that Commerzbank AG (“CBK”) violated the False Claims Act in connection with a $350 million loan that it secured from the Federal Reserve Bank as a result of the 2007 financial crisis. In response to the crisis, the Bank introduced the Term Discount Window program, allowing banks to borrow from the discount window for longer periods. CBK was the first foreign bank to take advantage of this money. The bank allegedly failed to disclose that they had traded gold on behalf of the Central Bank of Iran. CBK had, however, impliedly and expressly certified compliance with the rules and regulations regarding sanctions on Iran as well as other statutes that prohibited its activities. CBK therefore fraudulently received the benefits of a loan from the federal government of the United States. CBK is a German global banking and financial services company headquartered in Frankfurt, Germany. Its three main businesses are retail banking, commercial and mortgage banking, and investment banking. Continue reading

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Govt-Health-Insurance-Policy-300x200 3Yesterday the Court of Appeals for the First Circuit revived the False Claims Act case against Universal Health Services Inc. (“Universal Health”) filed by two relators that alleges that the company improperly billed the government for mental health services provided by unsupervised and unqualified staff. Universal Health owns and operates Arbour Counseling Services (“Arbour clinic”), a provider of mental-health services in Lawrence, Massachusetts. The Arbour clinic participates in MassHealth, the Medicaid program of the state of Massachusetts, and bills MassHealth for services rendered to individuals insured by the program. United States ex rel. Escobar et al. v. Universal Health Services Inc. was filed in 2011 by the parents of Yarushka Rivera who died in 2009 after suffering seizures allegedly caused by a reaction to the medication she received from unlicensed counselors and nurses at the Arbour clinic. The decision almost entirely reverses the district court’s dismissal of the suit, the Court of Appeals finding that the cost of staff supervision is automatically built into MassHealth reimbursement rates. Continue reading

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BU009443Miami, Florida-based lender and financial services company Hencorp Becstone Capital LC (“Hencorp”) has agreed to pay $3.8 million to settle allegations that it violated the False Claims Act in connection with an elaborate scheme to defraud the Export-Import Bank of the United States. The Export-Import Bank, founded in 1934, is the official export credit agency of the federal government that guarantees loans made by approved lenders to foreign companies for use in purchasing American-made products. Hencorp, acting through its regional director Ricardo Maza, procured candidates in Latin America for participation in the loan guarantee program of the Bank. Hencorp allegedly approached business in Latin America and offered to help them make an application to the Bank for inclusion in the program, and then offered to make a the loan to such businesses if the Export-Import Bank approved them for the loan guarantee. The applications were false because Hencorp did not intend to provide a loan but instead planned to divert the loan funds. Continue reading

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Govt-Health-Insurance-Policy-300x200 3Century Ambulance Service Inc. (“Century Ambulance”) of Jacksonville, Florida allegedly defrauded Medicare and Medicaid out of $5 million by submitting claims for ambulance services that were unnecessary or inflated. With the help of local hospitals, Century Ambulance allegedly falsified documents and records on a daily basis regarding patients transported either to or from hospitals owned by Southern Baptist Hospital of Florida Inc., Memorial Medical Care Group Inc., Orange Park Medical Center Inc., and Shands Jacksonville Medical Center Inc. (now UF Health Jacksonville). Relator Shawn Pelletier, a former emergency medical technician (“EMT”) employed by Century Ambulance, claims that the conduct has occurred since at least 2005 in his amended complaint filed today under the federal False Claims Act and the Florida False Claims Act. Pelletier has been an EMT since 1998 and worked for Century Ambulance from 2004 through 2006. Century Ambulance is a provider of both emergency and non-emergency medical transport services. Continue reading

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College-classroom2The former president of Concorde Career Colleges Inc. (“Concorde”) is alleging that the concerns he raised regarding the recruitment policies of the for-profit school resulted in his termination in violation of the federal False Claims Act. The complaint also alleges breach of contract, and violations of Delaware Whistleblower’s Protection Act and Oregon Whistleblower Protection Statute. According to relator John L. Hopkins, the network of schools was risking defauding the U.S. Department of Education based on its recruitment policies. The network of schools allegedly requires its recruiters to get a set number of students to enroll every week in addition to developing a program that tries to steer potential nursing students into less popular careers in order to increase enrollment in its other programs. Continue reading

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Red-Line-300x199 2Cause of Action, a Washington-based, independent, non-profit, public interest group, asked the Seventh Circuit today to revive its False Claims Act suit against the Chicago Transit Authority (“CTA”) for allegedly overbilling the government up to $55 million for bus usage. From at least 2001 through 2010, CTA allegedly fraudulently billed and collected approximately $2.6 million to $5.5 million per year in federal funds from the U.S. Department of Transportation under the Urbanized Area Formula Program, paid through and administered by, the Federal Transit Administration (“FTA”). In general, the program provides federal grant monies to fund the capital and operating expenses of transit programs in urbanized areas, such as Chicago. The program’s funds are disbursed using a grant formula that pays for vehicle revenue miles (“VRMs”). By charging “non-revenue” bus miles as “revenue” miles, CTA allegedly charged federal taxpayers for approximately 98.2% of its bus miles, while the nation’s eighteen other large bus operators charged for only approximately 83.5%. Continue reading