The Department of Justice announced a settlement in unique case advancing a uncommon theory of recovery for False Claims Act (“FCA”) lawsuits. CA Inc., (“CA”), agreed to padollar-billy $45 million to resolve allegations brought by a whistleblower under the FCA.

CA’s settlement further cements the government’s commitment to routing out fraud with the help of “whistleblowing” employees. People with information about frauds against the government stand to benefit significantly financially, and may disrupt immoral and dishonest practices. Dani Shemesh, the former employee of CA Software LTD that filed the suit in 2014, will receive $10,195,000 for the information she provided.

Shemesh alleged that CA Software made false representations and claims in the negotiation and performance of a General Services Administration (“GSA”) software and licensing contract.

doctor_talking_with_patient-729412-300x290A False Claims Act lawsuit unsealed last year in Southern California U.S. Attorney for the Central District of California announced that her office elected to intervene in a False Claims Act lawsuit alleging rampant Medicare fraud at a group of Southern California hospitals. The suit was first “unsealed” in late 2016.

The whistleblower (or “relator”) in this case, the former Director of Quality and Risk Management at Prime Healthcare Services, Inc., alleges that her employer defrauded the federal government of nearly $50 million dollars by billing for “medically unnecessary” inpatient short-stay admissions.

Prime Health owns and operates 14 hospitals throughout Central and Southern California. The whistleblower alleges that fraudulent billing practices occur across the Prime Health system.

Red-Line-300x199A New Hampshire contractor and Haverhill, Massachusetts subcontractors will pay $420,000 after settling allegations of submitting false and inflated payment requests for MBTA renovations. The case indicates that crackdowns on illegal practices in construction for the government are on the rise. S&R Construction, its president Stephen Early, subcontractor A&S Electrical, and its manager Gregory Lane, will be collectively responsible for repaying the Commonwealth.

The False Claims Act, a law that provides protections for “whistleblowers” who come forward with information not previously known to the government about waste or financial fraud on taxpayers, has become the primary statutory remedy for the government to recover ill-gotten funds. In 2016, the government prosecuted healthcare, defense, and contracting frauds through the FCA, collecting $4.7 billion.

Though the FCA has been law since after the American Civil War, and was passed after rampant frauds on the government enraged citizens, its use as changed throughout its existence. Originally, businessmen with lucrative contracts were dubbed “war hogs” by the American press, and the contracts that made them rich amounted to agreements with the union army to supply goods and services that were oftentimes nonexistent or subpar, despite being paid handily.

Recently, the U.S. Department of Justice announced the resolution of its claims of healthcare fraud against Physical Therapy Institute, LLC for $7.1 million dollars.

The lawsuit was commenced by two former employees turned whistleblowers, whose identities were kept secret, as a result of protections afforded to corporate “do-gooders” under the Civil War-era law.

The False Claims Act is a federal statute, enacted to “clean-up” government contracting in the wake of the U.S. Civil War, that allows whistleblowers, or “relators,” to bring qui tam lawsuits on behalf of the United States government and against businesses who commit fraud against the government.

Blowing-the-Whistle-2-3-300x199A U.S. hospital chain, TeamHealth, agreed to settle allegations that a recently acquired subsidiary, IPC, violated the False Claims Act by “up-coding” Medicare and Medicaid for services that were not performed, or were exaggerated. The lawsuit settled by TeamHealth was initiated by Dr. Bijan Oughatiyan, a physician formerly employed by a subsidiary acquired by the company.

False Claims Act (“FCA”) cases often hinge around information gathered from corporate whistleblowers who file lawsuits against their employers who allegedly commit fraud against the government. The Act was passed in response to rampant fraud on President Abraham Lincoln’s Union army. The army, Lincoln’s government, and taxpayers alike were outraged by businesses and “pork-barrel” businessmen that profited greatly from selling American civil war soldiers rotten food, boots with holes in the soles, and guns that could not fire.

The statute is unique amongst civil fraud remedies, as it empowers individuals with “inside” information about fraud on the government to share in any recovery the government may make. These individuals, referred to as “relators” in legalese, and who are often referred to as corporate “whistleblowers” frequently obtain 15-30% of recoveries made because of their FCA lawsuits.

Stethoscope-2-300x199A midwest healthcare provider agreed to resolve False Claims Act allegations brought by two whistleblowers for $18 million dollars.

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.  Last November, those penalties per claim will raise to nearly $22,000.

MedStar Ambulance Inc., a large Massachusetts ambulance company, will pay $12,700,000 dollars to settle False Claims Act (“FCA”) allegations brought by a corporate “whistleblower.”

The False Claims Act allows individuals with information about fraud on the government to bring suits on behalf of the United States to recover ill-gotten funds from contractors. If an individual’s suit proves successful, the “whistleblower” is generally entitled to 15-30% of the recovered funds. Congress adopted the law in the 19th century to expose fraud among contractors.

The case leading to MedStar’s settlement, filed by Dale Meehan, a former MedStar “Patient Account Representative” working in Worcester, Massachusetts, alleged various fraudulent schemes the company employed to bilk funds from federal healthcare programs.

This month, the Department of Justice (“DOJ”) announced that Shire Pharmaceuticals will pay $350 million to settle False Claims Act (“FCA”) allegations that Shire and the company it acquired in 2011, Advanced BioHealing (“ABH”), used kickbacks and other prohibited sales methods to compel hospitals, Doctors, and their firms to overuse its product “Dermagraft.”

Shire is a pharmaceutical company headquartered in Ireland. Its United States headquarters are located in Lexington, Massachusetts.

The allegations resolved by the settlement were brought in six lawsuits filed under the qui tam whistleblower provisions of the FCA. Those provisions permit private parties to sue on behalf of U.S. and state governments for false claims.

A Michigan mortgage services company settled a protracted $48 million dollar False Claims Act (“FCA”) lawsuit this week. The U.S. Attorney for the Eastern District of Michigan announced, “the settlement announced today holds United Shore accountable for its endorsement of ineligible loans for FHA mortgage insurance.”

United Shore Financial Services LLC (“USFS”) agreed to pay the U.S. government $48 million to resolve allegations that it violated the FCA by underwriting and originating “bad” mortgage loans that were insured by the U.S. Department of Housing and Urban Development (“HUD”). The loans USFS originated were disproportionality soured by borrowers’ inability to pay, in part, the Government alleged, because of the company’s improper process of approving hundreds of loans that HUD would not normally insure.

The False Claims Act was passed following the American Civil war, after widespread fraud on the Union army frustrated citizens, soldiers, and lawmakers alike. Sometimes dubbed “[President] Lincoln’s Law,” the FCA has become one of the U.S. government’s most effective tools in combating frauds on government-funded programs.

A physician practicing in Townshend, Vermont, paid $76,000 to the U.S. government to resolve allegations that she violated the federal False Claims Act (“FCA”) by submitting “false claims” for reimbursement to Medicare for unnecessary and unapproved “pain management” injection procedures.

The False Claims Act, passed in the aftermath of the American Civil War, and signed into law by President Abraham Lincoln, is a legal vehicle for people with knowledge about fraud on the government to recover money on behalf of the United States and to which they are entitled to a portion. If the case proves successful, the FCA plaintiff, called a “relator” or a “whistleblower,” is generally entitled to 15-30% of the recovered money.

In 2015 alone, the U.S. government recovered over $3.6 billion in either settlements or judgments in cases brought under the False Claims Act.

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