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Hedge-Fund-Office-BuildingOn Tuesday, the Court of Appeals of California revived Los Angeles County’s California False Claims Act case against Accent Builders, Inc. (“ABI”) and Superior Gunite Inc. (“SGI”), saying that the lower court should have ruled that the company’s requests for time extensions and change estimates constituted claims for $5 million in payments. The lower court had dismissed the complaint for failing to state a claim, maintaining that under the state’s statute, the requests did not qualify as claims for payment but instead were merely intermediate steps that had to be approved before the builders could actually bill Los Angeles County. In reaching its decision, the Court of Appeals relied on guidance from authority under the federal False Claims Act and concluded that the scope of the term “claim” encompassed the time extensions and change estimates requests as “requests or demands” for payment within the meaning of the California False Claims Act. Continue reading

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Loan-Application-199x300Moving Water Industries Corporation (“MWI”) has asked the D.C. Circuit to reverse a finding that it violated the False Claims Act in connection with its securing of $74.3 million in loans to fund Nigeria’s purchase of its pumping equipment. The violations were a result of the certifications made by the company to the U.S. Export-Import Bank that stated that MWI had only paid “regular commissions” in connection with the pump sales. In reality, however, MWI paid commissions exceeding 30% to its Nigerian sales agent. The company is now claiming that the trial court erred in finding that the Bank had provided fair notice of the government’s interpretation of “regular commissions.” On a cross appeal, the government is arguing that the trial court erred in finding that the borrowers repayment of the loans in an amount exceeding $22.5 million entirely discharged MWI’s liability for any damages. Continue reading

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Pill-Bottle-Money1-150x150CVS Caremark Corporation (“CVS”) allegedly used $5 discount coupons to attract Medicare and Medicaid beneficiaries to fill prescriptions at its stores in violation of the Anti-Kickback Statute. Relator Richard Carmel is arguing that the coupons do not fall under an exemption that allows providers to offer items of nominal value. According to Carmel, the nominal value safe harbor provision does not apply to this case because the safe harbor is only available under the Civil Monetary Penalty Act. The Anti-Kickback Statute has no such limitations or qualifiers. In addition, the safe harbor provision, which permits nominal incentives of $10 per item or $50 in the annual aggregate, does not apply because the prescription rewards can be added together to exceed the $10 per item threshold and ExtraBucks Rewards are considered to be cash equivalents. Finally, the aggregate value of the ExtraBucks received by Medicare and Medicaid beneficiaries at CVS’s more than 7,000 nationwide stores, far exceeds the $50 per year limit. The Anti-Kickback Statute is a federal criminal statute that prohibits any party from knowingly and willfully offering remuneration to induce someone to purchase a good or service reimbursable under a federal health care program. Violation of the Anti-Kickback Statute predicates liability under the False Claims Act. Continue reading

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WhistleTwo former employees of Dallas-based South Hampton Community Hospital were allegedly terminated for reporting violations of the False Claims Act to the U.S. Department of Health and Human Services’ Office of the Inspector General. The two were allegedly threatened, harassed, discharged, and otherwise discriminated against for reporting that the hospital changed diagnoses to bill government health care programs at improperly inflated rates and texted patients’ private medical information so that doctors could bill for visits that didn’t actually occur. In 2012, the hospital received an “F” for safety from the Leapfrog Group, a Washington-based nonprofit ratings service set up by major employers across the country to improve patient safety and value. The 111-bed acute care hospital was subsequently acquired by University General Health System and in early 2013 was re-branded as University General Hospital-Dallas. Continue reading

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Housing-Fr4aud2On Thursday, the Eleventh Circuit Court of Appeals denied Wells Fargo Bank N.A.’s (“Wells Fargo”) attempt to dismiss a complaint filed by two relators alleging that the company defrauded veterans with excessive fees on loans guaranteed by the U.S. Department of Veterans Affairs (“VA”). The relators brokered thousands of VA Interest Rate Reduction Refinancing Loan (“IRRRL”) loans. As brokers, the relators worked directly with veterans to take their applications, gather necessary documents, and connect them with a lender who actually originates the loan. During this time, the relators allegedly discovered that Wells Fargo “bundled” unallowable fees with allowable fees, fraudulently passing those unallowable fees on to veterans and concealing them from veterans and the VA. Following the government’s decision not to intervene in the case and after their complaint was unsealed, the relators began to vigorously pursue the claims against Wells Fargo and other lenders. To date, the relators have succeeded in recovering over $161 million for the federal government from six other lenders. Continue reading

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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