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Ricky Howard, a former employee of a California construction company that did work on domestic military bases, will receive $1.48 million dollars for his information regarding fraudulent billing practices. Howard has worked in the masonry trade his entire career, and was employed by Harper Construction Company (“Harper”) when he discovered the company’s frauds on the government.

Earlier this month, the U.S. Attorney for the District of Southern California announced that Harper has paid $5.4 million dollars to resolve allegations that it “up-charged” the U.S. government for its work on Camp Pendleton and Camp Lejeune and fraudulently created “sham” companies to fulfill government contracting requirements.

Harper Construction is ranked among the Top 400 construction companies, the Top 100 Design Build Firms, and the Top 100 Green contractors in the United States. It is the second largest privately-held company in San Diego, California. It reported revenues in 2010 of approximately $360 million.

Supreme Court ColumnsThe U.S. Supreme Court ruled today that Greene LLP’s theory of liability in a False Claims Act suit against a Massachusetts health care provider was, and will remain a viable theory for recovery under the statute. The case, argued before the Supreme Court in Washington, DC on April 19, 2016, centered on the so-called “implied certification” theory of False Claims Act liability. As a result of the decision, claims for payment to the United States may be considered “false” for failure to comply with applicable regulations, even if the claim itself does not expressly certify compliance with those regulations.

Greene LLP’s clients were spurred to file the False Claims Act suit under that statute’s qui tam provision by the death of their daughter, Yarushka Rivera, a Massachusetts teenager who died from complications with a medication originally prescribed by a nurse at a satellite mental health facility run by Universal Health Services. Under Massachusetts Medicaid (“MassHealth”) regulations, certain unlicensed health care professionals may provide services reimbursed by the government – but only with specified restrictions, such as a requirement that such unlicensed providers be supervised by licensed providers.

Rivera was treated by mental health care providers at a Universal facility in Lawrence, Massachusetts facility, first by two unlicensed counselors who were not supervised as required by MassHealth regulations. When her condition worsened, her care was transferred by the facility’s Clinical Director to a person held out to Greene LLP’s clients as a very experienced therapist, a licensed psychologist with a Ph.D. When Rivera’s condition continued to deteriorate, Greene LLP’s clients asked that their daughter’s care be transferred to a psychiatrist. Her care was transferred to a fifth Universal provider, who prescribed Trileptal for Rivera.

Hedge-Fund-Manager-Holding-MoneyOn Monday, June 6, 2016, a False Claims Act (FCA) lawsuit brought against a Kentucky ambulance company was unsealed. The whistleblower, Darrell McIntosh, is the owner of McIntosh Ambulance Services. During the course of conducting business in Breathitt County, Kentucky, McIntosh became aware of a competitor ambulance company, Arrow-Med, and their allegedly fraudulent Medicare billing practices.

The False Claims Act, originally enacted in 1863 during the civil war to combat rampant fraud in government contracting, was amended by Congress in 1986 to enhance the federal government’s ability to recover losses from fraud against the United States. Violations of the False Claims Act are subject to civil penalties plus three times the amount of the loss that the government incurred as a result of the defendant’s actions.

McIntosh’s qui tam complaint alleges that Arrow-Med violated three provisions of the False Claims Act: (1) billing Medicare for “medically unnecessary” non-emergency ambulance transport, (2) billing for “non-reimbursable” transport, and (3) providing kickbacks to referral sources.

BU009443In a far ranging decision, the Ninth Circuit held that whistleblowers need only meet two requirements to be considered an “original source” under the False Claims Act (FCA). First, the whistleblower must inform the government of the alleged fraud voluntarily. Second, the whistleblower must have “direct and independent knowledge” of the alleged fraud. The courts restatement of the original source requirement means that whistleblowers who have participated in the public disclosure of fraud are not automatically barred from bringing a FCA suit. This decision reversed the district court’s earlier ruling in United States ex rel. Hartpence v. Kinetic Concepts, Inc., which had dismissed the plaintiffs claim under the public disclosure bar. In a less surprising ruling, the Ninth Circuit also held that the district court erred when finding that the plaintiff would have also been dismissed under the first to file bar. Continue reading ›

VMware aHedge-Fund-Manager-Holding-Moneynd Carahsoft Technology Corp. reached a settlement of $75.5 million with the General Services Administration (GSA) on Tuesday, June 30. This settlement resolves allegations made by a former Vice President at VMware that the companies violated the False Claims Act (FCA). The whistleblower alleged that the cloud service providers overcharged the federal government for software products and related services from 2007 through 2013. Although VMware still asserts that the allegations are false, they have agreed to pay the settlement money in order to put an end to the lawsuit. Continue reading ›

Supreme-Court-Pillars-150x150 3The Sixth Circuit has held that a construction contractor’s violation of the Davis-Bacon Act can also create liability under the False Claims Act (FCA). U.S District Judge Kevin H. Sharp issued a judgment ordering Circle C Construction, LLC to pay the United States a total of $762,894 for violation of the FCA. These Davis-Bacon Act and FCA violations were connected to Circle C’s construction project on the Fort Campbell military base. Continue reading ›


A judgment against Trinity Industries for $663.4 million was made on June 9, 2015 for violations of the False Claims Act. According to whistleblower Joshua Harman, Trinity Industries failed to report a change made to highway guardrails to the Federal Highway Administration (FHWA). The change that Trinity Industries failed to report has caused the guardrails to malfunction. Instead of operating to absorb the impact of a crash, the guardrail heads, or end terminals, have worked almost as spears, piercing through the car and causing several fatalities.

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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 ›

AA049539The 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 ›

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