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.

May 2, 2017 - 

North Carolina-based Piedmont Pathology agreed to pay $601,000 to settle allegations it violated the False Claims Act by submitting false claims to Medicare and Medicaid for medically unnecessary procedures. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Piedmont pathologist Dr. Kim Geisinger. She will receive a whistleblower award of roughly $120,000. DOJ (WDNC)

May 2, 2017 - 

Maine dentist Joseph W. Griffin agreed to pay $90,000 to resolve allegations he violated the False Claims Act by submitting submitted false claims to MaineCare (Maine’s Medicaid program) for dental services not rendered, were medically unnecessary, or were so inadequately documented in the patient’s medical record as to be unreviewable. DOJ (DME)

May 1, 2017 - 

Texas-based importer Import Merchandising Concepts L.P. agreed to pay $275,000 to resolve allegations it improperly evaded customs duties on imports of wooden bedroom furniture from China by misclassifying the furniture as non-bedroom furniture, which is not subject to any antidumping duties. DOJ

May 1, 2017 - 

Kansas City area chiropractor Brian Schnitta and his clinic, Natural Way Chiropractic Center, agreed to pay roughly $1 million to settle allegations they violated the False Claims Act by charging Medicare for treatments for peripheral neuropathy not medically necessary or not otherwise covered by the program. DOJ (DKS)

May 1, 2017 - 

Memphis-based Poplar Healthcare PLLC and Poplar Healthcare Management, LLC agreed to pay $897,640 to resolve allegations they violated the False Claims Act by billing the government directly and through a subsidiary known as GI Pathology for diagnostic tests not medically necessary. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Poplar pathologist Gordon Wang. He will receive a whistleblower award of roughly $206,000 from the proceeds of the government’s recovery. DOJ (DRI)

April 28, 2017 - 

New Jersey-based Quest Diagnostics Inc. agreed to pay $6 million to resolve charges that Berkeley HeartLab Inc., which Quest acquired in 2011, violated the False Claims Act by paying kickbacks to physicians and patients to induce the use of Berkeley for blood testing services and by charging for medically unnecessary tests. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Dr. Michael Mayes. He will receive a yet-to-be-determined whistleblower award from the proceeds of the government’s recovery. DOJ

April 27, 2017 - 

Indiana University Health Inc. (IU Health) and HealthNet Inc. agreed to pay a total of $18 million to resolve allegations they violated the False Claims Act by engaging in an illegal kickback scheme related to the referral of HealthNet’s OB/GYN patients to IU Health’s Methodist Hospital. According to the government, IU Health provided HealthNet with an interest-free line of credit, the balance of which consistently exceeded $10 million. The government further charged that HealthNet was not expected to repay a substantial portion of this loan and that this financial arrangement was intended to induce HealthNet to refer its OB/GYN patients to IU Health’s Methodist Hospital. DOJ

April 27, 2017 - 

Forrest S. Kuhn, Jr., M.D., a Kentucky physician specializing in allergy, asthma and immunology, agreed to pay roughly $750,000 to resolve allegations he violated the False Claims Act by submitting false claims to Medicare, Medicaid, and other government health care programs for allergy tests never performed. DOJ (WDKY)

April 25, 2017 - 

Braden Partners, L.P. (d/b/a Pacific Pulmonary Services) agreed to pay $11.4 million to resolve allegations against it and its general partner, Teijin Pharma USA LLC, for violating the False Claims Act by submitting claims for reimbursement to Medicare and other federal healthcare programs for oxygen and related equipment supplied in violation of program rules, and for sleep therapy equipment supplied as part of a cross-referral kickback scheme with sleep clinics. According to the government, Pacific Pulmonary submitted claims to the Medicare, TRICARE and Federal Employee Health Benefits programs for home oxygen and oxygen equipment without obtaining the required physician authorization. The government further charged that certain of the company’s patient care coordinators agreed to make patient referrals to sleep testing clinics in exchange for those clinics’ agreement to refer patients to Pacific Pulmonary for sleep therapy equipment in violation of the Anti-Kickback Act. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Manuel Alcaine, a former sales representative of Pacific Pulmonary. Mr. Alcaine will receive a whistleblower award of roughly $1.8 million from the proceeds of the government’s recovery. DOJ

April 24, 2017 - 

Georgia-based Energy & Process Corporation agreed to pay $4.6 million to settle charges of violating the False Claims Act by failing to perform required quality assurance procedures and for supplying defective steel reinforcing bars in connection with a contract to construct a Department of Energy nuclear waste treatment facility. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Deborah Cook, a former employee of the prime contractor that subcontracted with E&P in the course of building the DOE facility. She will receive a yet-to-be-determined whistleblower award from the proceeds of the government’s recovery. DOJ

April 24, 2017 - 

Crittenton Hospital Medical Center and the Crittenton Cancer Center, together with their current owners Ascension Michigan and Ascension Health agreed to pay roughly $790,000 to resolve allegations they violated the False Claims Act by billing for medically unnecessary laboratory testing for patients who had been referred to Crittenton by Dr. Farid Fata and physicians in his office. In an earlier unrelated criminal matter, Fata pleaded guilty to health care fraud, conspiracy to pay and receive kickbacks, and promotional money laundering, and was sentenced to a term of 45 years in prison. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by an office administrator in Fata’s medical practice, Michigan Hematology-Oncology P.C. The whistleblower will receive a whistleblower award from the proceeds of the government’s recovery. DOJ (EDMI)

April 20, 2017 - 

Illinois-based drugstore giant Walgreen Co. agreed to pay $9.86 million to resolve allegations it violated the False Claims Act by submitting claims for reimbursement to California’s Medi-Cal program that were not supported by applicable diagnosis and documentation requirements. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by a former Walgreens pharmacist and a former pharmacy technician. They will receive a whistleblower award of roughly $2.3 million from the proceeds of the government’s recovery. DOJ (EDCA)

April 20, 2017 - 

Dr. Norman A. Brooks, a dermatologist and surgeon and owner of Skin Cancer Medical Center in Encino, agreed to pay roughly $2.7 million to resolve allegations he submitted bills to Medicare for Mohs micrographic surgeries for skin cancers that were medically unnecessary. The government alleged that Brooks falsely diagnosed skin cancer in some of his patients so that he could perform, and bill for, Mohs surgeries. The allegations originated in a whistleblower lawsuit by former employee Janet Burke. She will receive a whistleblower award of roughly $483,000 from the proceeds of the government’s recovery. DOJ (CDCA)

April 19, 2017 - 

Princess Cruise Lines Ltd. was sentenced to pay a $40 million penalty related to illegal dumping of oil contaminated waste and falsification of official logs in order to conceal the discharges.  It was the largest-ever penalty for crimes involving deliberate vessel pollution.  The court also ordered that a $1 million whistleblower reward be awarded to the British engineer who first reported the illegal discharges to the British Maritime and Coastguard Agency, which in turn provided the evidence to the U.S. Coast Guard. DOJ

April 18, 2017 - 

International Tutoring Services, LLC (d/b/a Hospice Plus; Goodwin Hospice, LLC; Phoenix Hospice, LP; Hospice Plus, L.P.; and Curo Health Services, LLC) agreed to pay $12.21 million to resolve allegations they violated the False Claims Act by paying kickbacks in exchange for patient referrals. The alleged kickbacks took the form of cash, gift cards, sham loans, a free equity interest in another entity, stock dividends, and free rental space. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. The whistleblowers will receive a whistleblower award from the proceeds of the government’s recovery. DOJ (NDTX)

April 14, 2017 - 

HSBC Bank agreed to pay roughly $2.1 million to resolve charges it violated the False Claims Act for misconduct in connection with HSBC’s participation in the Small Business Administration (SBA) Express loan program.  According to the government, HSBC sought reimbursement from the SBA without revealing facts suggesting that borrowers submitted false information to HSBC to obtain many of the loans, or the fact that HSBC had included the loans on an internal list of fraudulent or potentially fraudulent loans.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-determined whistleblower award from the proceeds of the government’s recovery. DOJ (SDNY)

April 12, 2017 - 

The Wisconsin Department of Health Services agreed to pay roughly $7 million to resolve allegations it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP). DOJ

April 12, 2017 - 

Peter Novajosky and Kathy Novajosky, doing business as P&K Realty, agreed to pay roughly $35,000 to settle charges of violating the False Claims Act by making false statements to obtain federal funds through the United States Department of Housing and Urban Development (HUD) housing assistance program.  According to the government, the Novajoskys applied for HUD funding without disclosing the tenant to which the requested funding related was their daughter. DOJ (MDPA)

April 11, 2017 - 

Argentine information technology and consulting firm Sistemas Globales S.A. agreed to pay $1 million to settle charges that it and its corporate affiliates, including U.S. affiliate Globant LLC, violated the False Claims Act and the Program Fraud Civil Remedies Act relating to Globant’s use of B-1 visas for certain of its foreign national employees. DOJ (NDTX)

April 11, 2017 - 

Norman Regional Hospital Authority (d/b/a Norman Regional Health System) and certain employees and physicians of Norman Regional agreed to pay roughly $1.6 million to settle charges of violating the False Claims Act by submitting false claims to Medicare for radiological services performed without the proper supervision by a physician.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Norman Regional radiologist Dr. Lance Garber.  He will receive a yet-to-be-identified whistleblower award from the proceeds of the government’s recovery. DOJ (WDOK)

April 10, 2017 - 

Kentucky based nursing home operator Prestige Healthcare agreed to pay $995,500 to resolve allegations it violated the False Claims Act with regard to its role in an alleged scheme to falsely bill Medicare for unnecessary genetic testing.  According to the government, Prestige provided genetic testing company Genomix LLC with information on and access to Prestige nursing home patients without ensuring physician orders were obtained for the testing and where Prestige physicians were not aware of and did not agree with the medical necessity of the testing. DOJ (WDWI)

April 10, 2017 - 

The Virginia Department of Social Services agreed to pay roughly $7.1 million to resolve allegations it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP). DOJ

April 2, 2017 - 

Sanofi-Pasteur agreed to pay roughly $20 million to resolve claims it incorrectly calculated drug prices and thereby overcharged the U.S. Department of Veterans Affairs for drugs under two contracts between 2002 and 2011. DOJ

March 31, 2017 - 

Tennessee based Exemplary Behavior, LLC and its principal, Andre Anderson, agreed to pay $20,000 to settle allegations they violated the False Claims Act by submitting false claims for payment to the Defense Health Agency’s TRICARE program for the provision of therapy services, including Applied Behavior Analysis (“ABA”) to children with Autism Spectrum Disorder (“ASD”).  Specifically, the settlement resolves charges that Exemplary Behavior submitted false claims to TRICARE as a result of their (1) double billing for services rendered; (2) billing for services not rendered by the billing provider; (3) providing group therapy while billing for individual therapy; and (4) billing for services, including ABA therapy, that were not actually provided. DOJ (MDTN)

March 30, 2017 - 

Godwin Oriakhi, owner of five Houston-area home health agencies pleaded guilty to conspiring to defraud Medicare and the State of Texas’s Medicaid-funded Home and Community-Based Service and Primary Home Care programs of more than $17 million.  According to his plea, Oriakhi admitted that he, his daughter and co-defendant Idia Oriakhi, and other members of his family owned and operated: Aabraham Blessings LLC, Baptist Home Care Providers Inc., Community Wide Home Health Inc., Four Seasons Home Healthcare Inc. and Kis Med Concepts Inc., and that they obtained patients for these home health agencies by paying illegal kickback payments to patient recruiters and his office employees for hundreds of patient referrals.  Oriakhi also admitted that they paid Medicare and Medicaid patients by cash, check, Western Union and Moneygram for receiving services from his family’s home health agencies in exchange for the ability to use their Medicare and Medicaid numbers to bill the programs for home healthcare. DOJ