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Government Enforcement Actions

Please also see our Recent Government Enforcement Actions page.

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November 3, 2022

Titan Medical Compliance, LLC, and its chiropractor owner Timothy Warren, have been ordered to pay over $15 million to resolve claims that they falsely marketed auricular electro-acupuncture devices as FDA-approved and Medicare-reimbursable, when in fact they are not.  The judgment against Warren and Titan is the latest in a federal investigation into the improper billing of these non-surgical devices.  USAO EDPA

November 1, 2022

Electronic health record technology vendor Modernizing Medicine, Inc. (“ModMed”) has agreed to pay $45 million to resolve allegations, including by its former VP of Product Management, that it both received and provided illegal kickbacks in exchange for referrals.  According to the government and whistleblower Amanda Long, ModMed engaged in schemes with Miraca Life Sciences, Inc. (now known as Inform Diagnostics) to receive kickbacks in exchange for recommending its users for Miraca’s lab services, and to provide its EHR technology free to healthcare providers to entice them to direct lab orders to Miraca and add to ModMed’s user base.  Long will receive about $9 million of the settlement with ModMed.  USAO NJ

November 1, 2022

Two Florida-based companies and their owners have been ordered to pay more than $24.8 million for violating the state Consumer Protection Act by sending 232,091 deceptive letters to more than 15,000 small business owners in Washington State, resulting in $1.3 million in payments to the fraudsters.  The letters by CA Certificate Service and Labor Poster Compliance appeared to originate from the government and demanded payment for certificates or posters that were implied to be mandatory, but were in fact available free of charge from state and federal agencies.  Although the nationwide fraud scheme resulted in $5.3 million in losses around the country, this is the first judgment against the defendants.  WA AG

October 31, 2022

The SEC has awarded more than $10 million to a whistleblower who provided critical information and assistance that contributed significantly to a successful enforcement action.  In addition to providing important documents, the whistleblower also met twice with agency staff, resulting in charges that closely mirrored the whistleblower’s allegations, as well as significant funds being returned to harmed investors.  SEC

October 26, 2022

Honeywell International Inc. has agreed to pay $3.35 million to settle a False Claims Act case involving the sale of defective bullet proof vests to the government.  Honeywell allegedly sold its patented Z Shield material to a bullet proof vest manufacturer, even though it knew the material was not cut out for ballistic use.  The vests were ultimately sold to multiple agencies through a GSA contract, as well as various state, local, and tribal law enforcement authorities through a DOJ program.  Their failures launched a 10-year investigation and litigation into the issue that ended with this settlement.  In total, the government recovered over $133 million from 17 entities and individuals.  DOJ

October 24, 2022

The nation’s largest chicken producer, Tyson Foods, has agreed to pay $10.5 million to settle a lawsuit that alleged the company, along with 18 other broiler chicken producers, had been conspiring since 2008 to drive up chicken prices.  Their actions allegedly caused consumers to overpay by millions of dollars, and violated the Washington Consumer Protection Act’s antitrust provisions.  Two other broiler chicken producers have settled thus far—Mar-Jac Poultry for $725,000, and Fieldale Farms Corp. for $475,000—bringing the total recovery in this matter to $11.7 million.  AG WA

October 21, 2022

Mattel Inc. has agreed to pay $3.5 million to settle charges of making material misstatements in its third and fourth quarter 2017 financial statements.  The toy manufacturer was found to have understated its third quarter tax valuation allowance by $109 million and overstated its fourth quarter tax expense by the same amount, resulting in a net loss and net loss per share that was understated by 15% and overstated by 63% respectively.  In connection with this action, the SEC launched an investigation into a former audit partner at Pricewaterhouse Coopers LLP, Joshua Abrahams, for the audit failure.  SEC

October 18, 2022

Carter Healthcare LLC, affiliates CHC Holdings and Carter-Florida, president Stanley Carter, and Chief Operations Officer Bradley Carter have agreed to pay $23 million and $7.2 million to settle two whistleblower cases alleging violations of the False Claims Act.  The first case, filed in the Western District of Oklahoma, alleged that the Oklahoma-based home health company paid illegal kickbacks to physicians under the guise of medical directorships in order to induce referrals.  The second case, filed in the Southern District of Florida by former therapists Sharon Mahaffey and Mark Brimer, alleged that Carter Healthcare billed Medicare for medically unnecessary therapy and upcoded patient diagnoses for higher reimbursements.  As part of the settlements, defendants Stanley and Bradley Carter have agreed to be excluded from participating in government healthcare programs for 5 years, and whistleblowers Mahaffey and Brimer will split a $1.3 million relator’s share.  USAO WDOK; USAO SDFL

October 17, 2022

A father and son, Mehdi and Saaed Moslem, have been sentenced to 3.3 years and 8 years in prison for concealing income from their lenders and the IRS, and evading taxes on their New York-based car dealership, Exclusive Motor Sports, and other businesses.  Along with the prison time, father Mehdi has been ordered to pay restitution of over $1 million and a $100,000 fine, and son Saaed has been ordered to pay restitution of nearly $2 million and a $200,000 fine.  USAO SDNY

October 17, 2022

Sutter Health has agreed to pay more than $13 million to settle claims of billing Medicare, Medicaid, TRICARE, and the Federal Employees Health Benefits Program for quantitative urine testing that were in fact performed by third-party labs.  The company has already paid more than $6.5 million and is due to pay the remaining $6.5 million in the next 30 days.  USAO NDCA
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