Posts Tagged With False Claims

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Deputy Associate Attorney General Stephen Cox Delivers Remarks at the Federal Bar Association Qui Tam Conference

On February 28, 2018, Deputy Associate Attorney General Stephen Cox delivered remarks on DOJ’s False Claims Act (“FCA”) enforcement efforts at the Federal Bar Association’s Qui Tam Conference.  Cox reported that the Department recovered more than $3.4 billion for the United States in Fiscal Year 2017 under the FCA and emphasized that while there are many FCA cases that DOJ can pursue, it is seeking to avoid “regulation by enforcement.”  Cox discussed recent DOJ regulatory ... Continue Reading

False Claims Act Complaint Charges Pharmacy, Two Pharmacy Executives, and Private Equity Firm with Participation in Kickback Scheme

On February 23, 2018, DOJ announced that it was intervening in an FCA suit brought by two former employees against a Florida pharmacy, Diabetic Care Rx LLC, doing business as Patient Care America.  DOJ’s complaint in intervention alleges that the pharmacy paid illegal kickbacks to induce prescriptions for drugs reimbursed by TRICARE, a federally funded health care program for members of the military and their families.  Two pharmacy executives were also named in the complaint, ... Continue Reading

Former CEO and Former Chief Loan Officer of Failed Sonoma Valley Bank Convicted After Trial of Bank Fraud and Other Crimes

On December 18, 2017, three individuals, including the former CEO and former Chief Loan Officer of defunct Sonoma Valley Bank (“SVB” or the “Bank”) were convicted by a federal jury of multiple criminal charges that stemmed from a series of schemes carried out between 2004 and the Bank’s collapse in August 2010.  Former SVB CEO Sean Clark Cutting and former CLO Brian Scott Melland were convicted following an eight-week trial in U.S. District Court for ... Continue Reading

SolarCity Agrees to Pay $29.5 Million to Resolve Alleged False Claims Act Violations

On September 22, 2017, DOJ announced that SolarCity Corporation has agreed to pay $29.5 million to resolve allegations that it violated the False Claims Act.  DOJ alleged that, beginning in 2009, SolarCity submitted inflated claims on behalf of itself and affiliated investment funds to the U.S. Department of the Treasury pursuant to Section 1603 of the American Recovery Reinvestment Act of 2009.  Through the Section 1603 Program, the Treasury paid a cash grant equal to ... Continue Reading

Judge Ordered Allied Home Mortgage Entities to Pay $296 Million for Civil Mortgage Fraud

On September 14, 2017, United States District Court Judge George C. Hanks Jr. of the Southern District of Texas ordered the Allied Home Mortgage Entities (“Allied”) to pay $296 million for FCA violations for which it had previously been held liable.  In November 30, 2016, a unanimous jury found Allied and Allied’s CEO Jim C. Hodge, liable for violating the False Claims Act (“FCA”) and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ... Continue Reading

New York-Based Hospital Operator Pays $4 Million for False Claims Act Violations Relating to Improper Payments to Doctors

On September 13, 2017, MediSys Health Network Inc., which operates two hospitals in Queens, New York, settled charges it violated the False Claims Act, agreeing to pay $4 million for submitting claims to the Medicare program for services provided to patients that had been referred by doctors who had improper financial relationships with the company.  MediSys provided compensation and advantageous office lease arrangements to physicians in violation of the Stark Law, which places limitations on ... Continue Reading

Galena Biopharma Inc. Will Pay Over $7.55 Million to Settle False Claims Allegations Relating to Opioid Drug

On September 8, 2017, Galena Biopharma Inc. settled with the DOJ for more than $7.55 million for paying kickbacks to doctors encouraging them to prescribe the fentanyl-based drug Abstral, in violation of the False Claims Act (“FCA”).  The government claims, among other infractions, that Galena provided more than 85 free meals to physicians and medical staff from one particular, high-prescribing practice; gave doctors and speakers $5,000 and $6,000, respectively, plus expenses, to participate in an ... Continue Reading

Novo Nordisk Will Pay $58 Million for Non-compliance with FDA-Mandated Risk Program

On September 5, 2017, Novo Nordisk Inc., a pharmaceutical manufacturer and subsidiary of Novo Nordisk U.S. Holdings Inc., itself a subsidiary of Danish Novo Nordisk A/S, agreed to pay $58.65 to settle claims it did not comply with the FDA-mandated Risk Evaluation and Mitigation Strategy (REMS) for the Type II diabetes drug Victoza.  The payment includes $12.15 million in disgorgement for Federal Food, Drug, and Cosmetic Act (“FDCA”) violations, as well as a $46.5 million ... Continue Reading

Santa Fe-Based Christus St. Vincent Regional Medical Center and Partner Pay $12.24 Million to Resolve Medicaid False Claims Act Allegations

On September 1, 2017, Christus St. Vincent Regional Medical Center, along with its partner Christus Health (“Christus”), agreed to pay $12.24 million for violations of the False Claims Act (“FCA”) to settle DOJ charges that they made illegal donations to local county governments which then funded the state share of Medicaid payments to the hospital.  Santa Fe’s now-defunct Sole Community Provider (“SCP”) Program provided supplemental Medicaid funds to hospitals in underserved communities, and the federal ... Continue Reading

Cardiac Monitoring Companies and Executive Agree to Pay $13.45 Million to Resolve False Claims Act Allegations

On June 26, 2017, AMI Monitoring Inc. (aka “Spectocor”) and its owner, Joseph Bogdan, agreed to pay $10.56 million and Medi-Lynx Cardiac Monitoring LLC, and its current majority owner Medicalgorithmics SA, agreed to pay $2.89 million in order to resolve claims that they violated the False Claims Act by billing Medicare for more expensive levels of cardiac monitoring services than were actually requested by ordering physicians.  According to the government, the companies would only allow ... Continue Reading

Genesis Healthcare, Inc. Agrees to Pay Federal Government $53.6 Million to Resolve Allegations of Medically Unnecessary Rehabilitation Therapy and Hospice Services

On June 16, 2017, Genesis Healthcare, Inc. agreed to pay the Justice Department $53.6 million to resolve six lawsuits and a federal investigation concerning potential False Claims Act violations in more than four states.  The lawsuits centered on conduct by Sun Healthcare Group, Inc., which Genesis purchased in 2012, and Skilled Healthcare Group, Inc. which merged with Genesis in 2015.  Former employees of Sun Healthcare and Skilled Healthcare had brought suits against the Genesis-acquired entities ... Continue Reading

Electronic Health Records Vendor to Pay $155 Million to Settle False Claims Act Allegations

On May 31, 2017, eClinicalWorks (“ECW”), one of the largest vendors of electronic health records software, and its founders, Girish Navani, Rajesh Dharampuriya, and Mahesh Navani, agreed to pay $154.92 million to resolve a False Claims Act suit against ECW that alleged the company abused a federal incentive program by misrepresenting the quality of its electronic health record software.  The federal Electronic Health Records Incentive Program offers financial incentives to health-care providers that adopt certain ... Continue Reading

Acting U.S. Attorney Announces $54 Million Settlement of Civil Fraud Lawsuit Against Benefits Management Company for Improper Authorization of Medical Procedures

On May 11, 2017, a False Claims Act complaint was filed and settled against benefits management company CareCore National LLC (“CareCore”), now part of eviCore healthcare, for not properly assessing over a period of at least eight years whether medical diagnostic procedures paid for with Medicare and Medicaid funds were necessary or reasonable before approving them.  Under the settlement, CareCore must pay a penalty of $54 million, with $45 million being paid to the United ... Continue Reading

U.S. Intervenes in “Whistleblower” Case Alleging UnitedHealth Group Mischarged Medicare Advantage and Prescription Drug Programs; U.S. Intervenes in Second “Whistleblower” Lawsuit Alleging UnitedHealth Mischarged the Medicare Advantage and Prescription Drug Programs

On May 1, 2017, the United States intervened in a False Claims Act lawsuit against UnitedHealth Group, Inc. and filed a complaint alleging that UnitedHealth knowingly disregarded information about the medical conditions of beneficiaries in its largest Medicare Advantage Plan, which increased the risk adjustment payments it received from Medicare.  UnitedHealth, the nation’s largest Medicare Advantage Organization, receives monthly, per-beneficiary payments from Medicare that are significantly influenced by the health status of each beneficiary.  The ... Continue Reading

Blood Testing Laboratory to Pay $6 Million to Settle Allegations of Kickbacks and Unnecessary Testing

On April 28, 2017, Quest Diagnostics Inc. agreed to pay $6 million to resolve an alleged False Claims Act violation for paying kickbacks to physicians and patients to induce the use of Berkeley HeartLab Inc., a Quest subsidiary, for blood testing services and unnecessary medical tests.  According to the complaint, Berkeley allegedly paid kickbacks to referring physicians disguised as “processing and handling” fees and allegedly paid kickbacks to patients by waiving copayments that certain patients ... Continue Reading

Pacific Pulmonary Services Agrees to Pay $11.4 Million to Resolve False Claims Act Allegations

On April 25, 2017, Branden Partners, L.P., doing business as Pacific Pulmonary Services, agreed to pay $11.4 million to resolve allegations that it and its general partner, Teijin Pharma USA LLC, violated the False Claims Act.  Pacific Pulmonary Services provides oxygen tanks and related supplies, and sleep therapy equipment, to patients’ homes.  The allegations were that, starting in 2004, Pacific Pulmonary Services began submitting claims for reimbursement to Medicare and other federal healthcare programs for ... Continue Reading

CA Inc. to Pay $45 Million for Alleged False Claims on Information Technology Contract

On March 10, 2017, CA Inc., an information technology management software and service company,  agreed to pay $45 million to resolve allegations that it made false statements and claims in the negotiation and administration of a General Services Administration (“GSA”) contract.  The agreement resolves claims that CA provided false information about commercial customer discounts for its software licenses and maintenance services to GSA contracting officers.  The allegations stemmed from a whistleblower lawsuit filed by a ... Continue Reading

Acting Assistant Attorney General Kenneth A. Blanco Speaks at the American Bar Association National Institute on White Collar Crime

On March 10, 2017, Acting Assistant Attorney General Kenneth A. Blanco addressed the 31st annual American Bar Association White Collar Crime conference about the Criminal Division, and in particular its efforts with respect to white collar crime and corruption in the international arena.  Blanco noted the Department’s success in its anti-money laundering and counter-terrorist financing efforts, as well as its continued efforts in preventing the abuse of shell companies.  Blanco then described the customer due ... Continue Reading

Shire PLC Subsidiaries Settle False Claims Act Allegations

On January 11, 2017, Subsidiaries of Shire PLC, a multinational pharmaceutical firm headquartered in Ireland, agreed to pay $350 million to settle federal and state False Claims Act allegations.  The allegations were that Shire and Advanced BioHealing (“ABH”), which Shire acquired in 2011, paid kickbacks in order to induce clinics and physicians to use a product for the treatment of diabetic foot ulcers called “Dermagraft.”  The kickbacks were alleged to be in a variety of ... Continue Reading

Forest Laboratories and Its Subsidiary Agree to Pay $38 Million to Resolve False Claims Act Allegations

On December 15, 2016, Forest Laboratories LLC and its subsidiary, Forest Pharmaceuticals Inc., agreed to pay $38 to resolve allegations that Forest violated the Anti-Kickback Statute of the False Claims Act.  The government contends that Forest provided improper inducements to a group of physicians in the form of payments and meals in connection with speaker programs, and that these benefits were provided for speaker programs that were cancelled or not attended by any licensed healthcare ... Continue Reading

Former Top Generic Pharmaceutical Executives Charged with Price-Fixing, Bid-Rigging and Customer Allocation Conspiracies

On December 14, 2016, Jeffrey Glazer and Jason Malek, the former CEO and President, respectively, of a generic pharmaceutical company were charged in the Eastern District of Pennsylvania for their roles in conspiracies to fix prices, rig bids, and allocate customers to particular generic drugs, including the antibiotic doxycycline hyclate and the diabetes medication glyburide.  The doxycycline hyclate conspiracy allegedly took place from as early as April 2013 until at least December 2015, while the ... Continue Reading

Jury Finds Allied Home Mortgage Entities and CEO Jim C. Hodge Liable for Civil Mortgage Fraud, Awards the United States over $92 Million in Damages

On November 30, 2016, a unanimous jury found Allied Home Mortgage entities (“Allied”) and Allied’s CEO Jim C. Hodge, liable for violating the False Claims Act (“FCA”) and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) in connection with fraudulent misconduct in connection with the Federal Housing Administration’s mortgage insurance program.  Allied  and Hodge were found liable for operating undisclosed branch offices that originated FHA loans that were then attributed to the ... Continue Reading

Medical Device Maker Biocompatibles Pleads Guilty to Misbranding and Agrees to Pay $36 Million to Resolve Criminal and Civil Liability

On November 7, 2016, medical device manufacturer Biocompatibles Inc., which is a subsidiary of BTG plc, pled guilty to a misdemeanor charge for misbranding its LC Bead device.    LC Bead is an embolic device used to treat liver cancer and other diseases.  LC Bead was cleared by the U.S. Food and Drug Administration (FDA) as an embolization device, which is inserted in blood vessels in order to stop or lessen blood flow to tumors and ... Continue Reading

Nursing Home Pharmacy to Pay over $28 Million to Settle Kickback Allegations

On October 17, 2016, Omnicare Inc. agreed to pay over $28 million to resolve allegations that it solicited and received kickbacks from Abbott Laboratories in exchange for promoting their drug to its nursing home patients.  According to the complaint, Omnicare accepted payments from Abbott in return for promoting one of Abbott’s drugs, and then described the payments as “grants” or “educational funding.”  A global civil and criminal resolution was reached with Abbott in 2012, in ... Continue Reading