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Government Enforcement Actions

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November 20, 2020

Information technology contractor Cognosante, LLC will pay $19 million to resolve allegations that it violated the False Claims Act by overcharging the government under two GSA Multiple Award Schedule contracts.  The settlement came after Cognosante disclosed to the U.S. that it provided false information concerning its commercial discounting practices during contract negotiations and, during contract performance, charged the government for labor that failed to meet the qualifications set forth in the contracts.  DOJ; USAO DC

November 16, 2020

Seattle’s Group Health Cooperative, now part of Kaiser, will pay $6.375 million to settle allegations in a whistleblower suit that it falsely reported unsupported diagnosis codes to Medicare in order to receive inflated payments.  The suit alleges that GHC utilized the services of a coding review company, DxID, that proposed unsupported diagnosis codes, which GHC knowingly submitted to CMS as part of seeking higher payment for the affected Medicare Advantage beneficiaries.  Whistleblower Teresa Ross, represented by Constantine Cannon, will receive approximately $1.5 million.  DOJ

November 5, 2020

Lawrence Gerrans, the former CEO of medical device start-up Sanovas, was sentenced to over 11 years in prison following his conviction at trial on charges arising from his diversion of funds from Sanovas to his personal use, including by transferring nearly $3 million to shell companies he controlled.  During the criminal investigation, Gerrans provided false documents to the FBI, tampered with a witness, and violated a court-ordered bond condition.  ND Cal

November 5, 2020

The SEC awarded a whistleblower $3.6 million, stating that the individual had provided information that alerted the Commission to misconduct that was occurring abroad, and further provided substantial and ongoing assistance during the course of the investigation, traveling abroad at the whistleblower’s own expense and providing extensive supporting documentation.  SEC

November 5, 2020

A whistleblower received a $750,000 SEC award, with the Commission stating that the individual provided significant information that uncovered an ongoing fraud and assisted the investigation. SEC

November 3, 2020

An SEC whistleblower was awarded $28 million following an undisclosed enforcement action.  The individual internally reported information that prompted the company to initiate an internal investigation, and provided significant information that aided the SEC, including by testifying and identifying a key witness.  SEC

November 3, 2020

Illinois-based charter school management company Concept Schools, NFP, will pay $4.5 million to settle allegations that it violated the False Claims Act by rigging the bidding process for E-Rate contracts with its network of charter schools between 2009 and 2012 so that its preferred technology vendors received contract awards, despite the fact that they provided equipment at higher prices than those approved by the FCC for equipment with the same functionality.  DOJ

November 2, 2020

Hospital system Memorial Health Services will pay a total of $31.5 million after self-disclosing that it overcharged California’s Medicaid program, Medi-Cal, for outpatient prescription drug reimbursements under the 340B Drug Pricing Program.  Memorial Health billed Medi-Cal for outpatient drugs at its usual and customary rate, rather than the lower “actual acquisition costs,” as required under the 340B Drug Pricing Program. California will receive $18.9 million of the settlement, and the federal government will receive $12.6 million.  Cal; CD Cal

October 30, 2020

Days and Towers, LLC will pay over $800,000 to resolve charges that it violated the False Claims Act between 2015 and 2019 through its submission of false tariff schedules to reduce its customs obligations on imported products.  USAO PR
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