DOJ Fraud Settlements

The Department of Justice is the principal federal agency authorized to enforce the laws and defend the interests of the United States. As such, it oversees the enforcement of the False Claims Act, the foundation of the American whistleblower system, and by far the most widely used statute by whistleblowers to report corporate fraud and misconduct.

The agency traces its origins to the Judiciary Act of 1789 which created the Office of the Attorney General, and the 1870 Act to Establish the Department of Justice, which established the agency as "an executive department of the government of the United States" with the Attorney General as its head.

The agency is comprised of numerous divisions with the Civil Division and in some instances, the Criminal Division, overseeing investigations and prosecutions under the False Claims Act. The U.S. Attorneys Office of the federal district where the False Claims Act case is filed also plays a key role in False Claims Act enforcement.

Below are summaries of the most recent DOJ settlements or successful resolutions under the False Claims Act as well as other successful prosecutions for fraud and misconduct. If you believe you have information about fraud against the government, including against the Medicare or Medicaid systems, please contact us to speak with one of our experienced whistleblower attorneys.

March 17, 2017 - 

Houston-Area nurse Charles Esechie pleaded guilty today for his role in a Medicare fraud scheme that resulted in losses to Medicare of more than $5 million.  According to the plea, Esechie worked as a nurse for both Harris County, Texas Hospital District and Baptist Home Care Providers Inc., one of five Houston-area home healthcare agencies owned by Godwin Oriakhi.  Esechie admitted that while he worked at Baptist, he knew that Oriakhi obtained Medicare patients by paying illegal kickback payments to patient recruiters for referring patients to Baptist for home healthcare services that Esechie knew were medically unnecessary and often not provided. DOJ

March 13, 2017 - 

Massachusetts-based Charles River Laboratories International Inc. agreed to pay $1.8 million to settle claims it violated the False Claims Act by improperly charging for labor and other associated costs not actually provided on certain National Institutes of Health contracts relating to the provision of laboratory animals to the NIH. DOJ

March 10, 2017 - 

New York based information technology management software company CA Inc. agreed to pay $45 million to resolve allegations it violated the False Claims Act by making false claims in the negotiation and administration of a General Services Administration contract.  According to the government, CA provided false information about the discounts it gave commercial customers for its software licenses and maintenance services at the time the contract was negotiated and also violated the price reduction clause in the contract by not providing government customers with additional discounts when commercial discounts improved.  The allegations originated a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Dani Shemesh, a former employee of CA Software Israel LTD.  Shemesh will receive a whistleblower award of roughly $10.2 million from the proceeds of the government’s recovery. DOJ

March 10, 2017 - 

Volkswagen AG pleaded guilty to three felony counts charging: (1) conspiracy to defraud the United States, engage in wire fraud, and violate the Clean Air Act; (2) obstruction of justice; and (3) importation of merchandise by means of false statements.  As part of the plea, the company agreed to pay a $2.8 billion penalty as a result of the company’s decade-long scheme to sell diesel vehicles containing software designed to cheat on U.S. emissions tests. DOJ

March 7, 2017 - 

German auto parts maker Kiekert AG agreed to plead guilty and pay a $6.1 million criminal fine for its role in a conspiracy to rig bids of side-door latches and latch minimodules. DOJ

March 7, 2017 - 

Chinese telecom equipment maker ZTE Corporation agreed to enter a guilty plea and pay a $430 million penalty for conspiring to violate the International Emergency Economic Powers Act by illegally shipping U.S.-origin items to Iran.  ZTE simultaneously reached settlements with the Department of Commerce’s Bureau of Industry and Security (BIS) and the Department of the Treasury’s Office of Foreign Assets Control for a total government payout of $892 million.  In addition, the BIS suspended an additional $300 million which ZTE will pay if it violates the settlement.  See DOJ Press Release.  The settlements relate to ZTE’s shipment of roughly $32 million worth of U.S.-origin items to Iran without obtaining the proper export licenses from the U.S. government.  The products were supplied in connection with two Iranian contracts for the installation of cellular and landline network infrastructure. Whistleblower Insider

March 6, 2017 - 

Simon Hong, owner of Los Angeles-based JH Physical Therapy Inc., was sentenced to 63 months in prison and to pay roughly $2.4 million in restitution, for his role in a $3.4 million Medicare fraud scheme that involved billing for occupational therapy services that were not medically necessary and not provided.   Hong admitted billing Medicare for occupational therapy services when what were provided instead were acupuncture and massage services, not reimbursable by Medicare.  Hong further admitted directing co-conspirator therapists to falsify medical records to make it appear as if the services billed actually had been provided. DOJ

March 6, 2017 - 

New Jersey family doctor Bernard Greenspan was convicted for accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLCDOJ (DNJ)

March 3, 2017 - 

Rex Duruji, an unlicensed medical professional posing as a physician, was convicted for his participation in a $1.3 million Medicare fraud scheme.  The evidence presented at trial showed that Duruji posed as a physician to induce Medicare beneficiaries to sign up for fraudulent home-health services with Koby Home Health that were not actually provided and paid illegal cash kickbacks to the beneficiaries for those claims. DOJ

March 2, 2017 - 

Detroit-area physician Aaron Goldfein pleaded guilty for his role in a $5.4 million Medicare fraud scheme involving phony physician visits and drug prescriptions.  As part of his plea, Goldfein admitted to being part of a scheme in which his co-conspirators would hold themselves out as licensed physicians and purport to perform physician home visits and other services for Medicare beneficiaries, although these co-conspirators were not licensed to practice medicine in Michigan.  Goldfein would then bill Medicare through Tri-City Medical Center as if he himself had completed these visits.  Goldfein also admitted to being part of a scheme in which he received kickbacks in exchange for writing home health prescriptions. DOJ

March 2, 2017 - 

Miami residents Mildrey Gonzalez and Milka Alfaro pleaded guilty to fraud charges stemming from their roles in a $20 million home health care fraud scheme.  Gonzalez and Alfaro were co-owners of seven home health care agencies:  Inar Home Care Service Corp., MA Home Health Inc., Golden Home Health Care Inc., Nova Home Health Care Inc., Finetech Home Health Inc., Homestead Home Health Care LLC and Metro Dade Home Health Inc.  Gonzalez and Alfaro admitted paying bribes and kickbacks to medical professionals in return for the provision of prescriptions for home health care services and referrals of Medicare beneficiaries to their home health care agencies. DOJ

March 1, 2017 - 

ATCH, LLC (d/b/a G-MART) and ALI ASGHAR KHAN agreed to pay $65,000 to settle allegations they violated the False Claims Act by submitting false claims under the Supplemental Nutrition Assistance Program to the Department of Agriculture, Food and Nutrition Service which was established to provide food to low-income individuals through approved retail food stores. DOJ (WDOK)

March 1, 2017 - 

Florida-based information technology company People, Technology and Processes, LLC and the company’s CEO and CFO, Victor Buonamia and Nicole Buonamia, agreed to pay $320,000 to resolve allegations they violated the False Claims Act by submitting improper invoices for work allegedly performed for the United States in support of the U.S. Army in Afghanistan.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former company employee Aidan Tamer Toprakci.  He will receive a whistleblower award of roughly $64,000 from the proceeds of the government’s recovery. DOJ (MDFL)

February 28, 2017 - 

CH2M Hill, Inc. agreed to pay $1.5 million to settle charges of violating the False Claims Act by overbilling the government under a Joint Venture Project Management Oversight Agreement with Amtrak. DOJ

February 27, 2017 - 

Tokyo-based Takata Corporation pleaded guilty and was sentenced to pay a total of $1 billion in criminal penalties stemming from the company’s conduct in relation to sales of defective airbag inflators.  According to admissions made during the course of the guilty plea, Takata carried out a scheme to defraud its customers and auto manufacturers by providing false and manipulated airbag inflator test data that made the performance of the company’s airbag inflators appear better than it actually was.  Even after the inflators began to experience repeated problems in the field, Takata executives continued to withhold the true and accurate inflator test information and data from their customers. DOJ

February 24, 2017 - 

Raciel Leon, manager of Mercy Home Care Inc. and a billing employee for D&D&D Home Health Care Inc., two Miami-area home health agencies, was sentenced to a 126 month prison term for his role in a $2.5 million Medicare fraud scheme.  The evidence at trial showed that Leon and his co-conspirators used the companies to submit false claims to Medicare based on services not medically necessary, not actually provided, and for patients procured through the payment of illegal kickbacks to doctors and patient recruiters.  DOJ

February 23, 2017 - 

Houston-based Wood Group PSN Inc. was ordered to pay $7 million for falsely reporting over several years that personnel had performed safety inspections on offshore facilities in the Gulf of Mexico in the Western District of Louisiana, and $1.8 million for negligently discharging oil into the Gulf of Mexico in violation of the Clean Water Act after an explosion on an offshore facility.  The company was also ordered to pay $700,000 for community service projects in the areas where the criminal conduct took place.  DOJ

February 17, 2017 - 

Pharmacia LLC (formerly known as Monsanto), Solutia Inc., ExxonMobil Oil Corp. and Cerro Flow Products have agreed as responsible parties to spend roughly $14.8 million to clean up six former waste disposal sites that comprise the Sauget Area 1 Superfund Site in Sauget, St. Clair County, Illinois.  DOJ

February 16, 2017 - 

New Jersey doctor Kenneth D. Nahmu, his wife Ann Walsh and their oncology practice agreed to pay $1.7 million to resolve allegations they violated the False Claims Act by billing Medicare for illegally importing and using unapproved chemotherapy drugs from foreign distributors.  DOJ (DNJ)

February 15, 2017 - 

Nevada-based Sierra Nevada Corporation agreed to pay $14.9 million to resolve allegations it violated the False Claims Act by misclassifying certain costs, resulting in inflated overhead rates paid to the company under various government contracts.  DOJ (EDCA)

February 10, 2017 - 

Dr. Paul B. Tartell, an ENT physician practicing in Plantation, Florida and his practice Paul B. Tartell, M.D., P.L., have agreed to pay $750,000 to resolve allegations that he violated the False Claims Act by billing for surgical endoscopies with debridement and laryngeal stroboscopies that were not provided or not medically necessary.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Theodore Duay, a former patient of Dr. Tartell.  Mr. Duay will receive a whistleblower award of $135,000 from the proceeds of the government’s recovery.  DOJ (SDFL)

February 9, 2017 - 

University Behavioral Health of El Paso agreed to pay $860,000 to resolve allegations it violated the False Claims Act by submitting false claims to Medicare tainted by the payment of kickbacks to a physician under the guise of a professional services agreement in return for the physician’s referral of patients to the hospital.  Specifically, the physician received payments above fair market value, or for services not rendered, and made improper referrals to the hospital for Medicare-reimbursed services.  DOJ (WDTX)

February 9, 2017 - 

General Production Service of California, Inc. agreed to pay $300,000 to settle charges of violating the False Claims Act by failing to pay money owed on oil produced from a federal lease.  DOJ (DCO)

February 8, 2017 - 

Florida-based Comprehensive Health Services, Inc., one of the country’s largest providers of workforce medical services, agreed to pay roughly $3.8 million to settle charges it violated the False Claims Act by double-billing and mischarging the government for medical services in connection with work it performed on an Internal Revenue Service contract.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by James J. Kerr, Jr.  He will receive a whistleblower reward of roughly $645,000 from the proceeds of the government’s recovery.  Whistleblower Insider

February 7, 2017 - 

Florida physician Gary L. Marder, and the owner of the Allergy, Dermatology & Skin Cancer Centers in Port St. Lucie and Okeechobee, stipulated to a consent final judgment of over $18 million to settle False Claims Act allegations that Dr. Marder submitted claims to federal healthcare programs for medically unnecessary biopsies and radiation therapy services, radiation therapy services performed in contravention of standard practice regarding the amount of time between radiation treatments, and radiation therapy services performed without direct supervision and by unlicensed and/or unqualified physician assistants.  Dr. Kendall also allegedly submitted false claims to federal and state healthcare programs for laboratory services tainted by kickbacks to, and improper financial relationships with, Dr. Marder.  The allegations originated in a whistleblower lawsuit filed by Dr. Theodore A. Schiff under the qui tam provisions of the False Claims Act.  He will receive a yet-to-be-determined whistleblower award from the proceeds of the government’s recovery.  DOJ (SDFL)