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Government Enforcement Actions

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February 19, 2020

The SEC has awarded two whistleblowers a total of almost $3 million for alerting the agency to misconduct.  The first award of over $2.2 million went to an individual whose information helped bring a successful enforcement action to an open investigation.  The second award of almost $700,000 went to an individual whose tip about a fraudulent reporting scheme helped launch an investigation.  SEC

February 19, 2020

Information Innovators Inc. (Triple I), a federal technology contractor in Virginia, has agreed to pay over $6 million to settle claims that a predecessor company knowingly overbilled the Department of Homeland Security (DHS) on an Enterprise Acquisition Gateway for Leading Edge Solutions Contract (EAGLE contract) from 2007 to 2014.  The alleged False Claims Act violations by Creative Computing Solutions Inc. (CCSi) involved billing DHS for work performed by under-qualified CCSi employees at rates reserved for more qualified employees.  DOJ; USAO MD

February 19, 2020

Antonio Olivera, a hospice administrator in Southern California, has been sentenced to 2.5 years in prison and ordered to pay nearly $2.2 million in restitution for his role in a multimillion dollar fraud scheme that ran from 2011 to 2018.  Together with three co-conspirators, Olivera paid illegal kickbacks to patient recruiters for referrals of Medicare beneficiaries to the hospice, Mhiramarc Management LLC.  When Mhiramarc staffers realized the referrals did not qualify for hospice, Olivera overruled them and caused the referrals to be put on hospice, ultimately causing Medicare to pay over $17 million in false claims.  DOJ

February 17, 2021

French contractor COLAS Djibouti SARL will pay a total of $14.5 million to resolve claims that it supplied substandard concrete under a contract with the U.S. Navy for construction of Navy airfields in the Republic of Djibouti.  Colas Djibouti was required to certify that concrete supplied met contractual specifications for composition and characteristics, but made fraudulent misrepresentations and created fictitious testing results regarding the concrete’s composition and characteristics.  Defendant entered into a deferred prosecution agreement on criminal claims, paying $12.5 million ($10 million in forfeiture and restitution, and $2.5 million as a criminal penalty).  Defendant also entered into a civil settlement for  $3.9 million, receiving a credit of $1.96 million for its payment under the DPA.  DOJ; USAO SD Cal

February 12, 2020

The operator of Georgia-based durable medical equipment company Wilmington Island Medical Inc. has been sentenced to two years in prison and ordered to pay about $550,000 in restitution for paying kickbacks to doctors and nurse practitioners in exchange for signed orders and then billing those orders to Medicare.  The judgment against Patrick Wolfe is part of an ongoing investigation by the Southern District of Georgia to crack down on more than $1.5 billion in losses to Medicare and Medicaid originating from the district.  So far a total of thirty-one individuals and companies have been charged.  USAO SDGA

February 12, 2020

General Motors (GM) has agreed to a $5.75 million settlement with the State of California to resolve allegations of making false and misleading statements to investors, including the state’s largest pension system, California Public Employees’ Retirement System (CalPERS).  According to Attorney General Xavier Becerra, GM cheated California twice—first by failing to disclose a faulty ignition-switch issue to the National Highway and Traffic Safety Administration (NHTSA) that it had been aware of for almost ten years, and which ultimately led to 124 fatalities and 274 injuries, and second by concealing the problem from investors and failing to build reserves for losses it knew was coming.  The company’s actions artificially inflated its stock price, causing CalPERS to lose millions of dollars.  CA AG

February 9, 2020

India-based cancer drug manufacturer Fresenius Kabi Oncology Limited (FKOL) has agreed to pay $50 million in fines and forfeiture for failing to provide certain records to FDA investigators.  In violation of the Federal Food, Drug and Cosmetic Act, which helps ensure the purity and potency of drugs sold in the United States, FKOL actively obstructed a 2013 FDA inspection of one of its plants by removing and deleting manufacturing records.  As part of the settlement, FKOL has also agreed to implement a compliance and ethics program to prevent, detect, and correct any further violations of U.S. laws.  DOJ; USAO NV

February 3, 2020

The former CEO of Texas hospice and home health chain the Merida Group, Henry McInnis, has been sentenced to 15 years in prison following his conviction for healthcare fraud and alleged charges.  McInnis and his co-conspirator Rondey Mesquias, who was previously sentenced to 20 years in prison, submitted over $150 million in fraudulent Medicare bills between 2009 and 2018 by falsifying medical records and telling thousands of patients with long-term incurable diseases they had less than six months to live in order to enroll the patients in hospice programs for which they were otherwise unqualified.  In addition, McInnis directed Merida’s practice of paying physicians bogus “medical director” fees in exchange for those doctors falsely certifying unqualified patients for hospice and home health, as well as paying improper kickbacks to patient recruiters.  DOJ

January 28, 2021

Electronic health records vendor athenahealth Inc. will pay $18.25 million to resolve claims brought in two separate whistleblower actions alleging that certain Athena marketing programs provided unlawful remuneration to healthcare providers and others to induce providers to purchase Athena’s EHR systems.  Remuneration to current and prospective customers included all-expenses paid trips to sporting, entertainment, and recreational events, as well as cash payments to customers who referred others to Athena.  In addition, Athena paid other EHR vendors who referred clients to Athena when they were discontinuing their own EHR products and services. The kickbacks allegedly improperly generated sales for Athena while causing healthcare providers to submit false claims to the federal government for incentive payments related to the adoption and “meaningful use” of Athena’s EHR technology. The whistleblowers, Geordie Sanborn, Cheryl Lovell, and William McKusick, will receive a share of the total settlement that remains to be determined.  DOJ; USAO Mass

January 27, 2021

One of the largest marketing companies in the world, Epsilon Data Management LLC, has agreed to pay $150 million to settle claims that its Direct to Consumer (DTC) Unit knowingly sold the data of more than 30 million consumers—which the company had identified as most likely to respond to marketing solicitations—to clients it knew were engaged in fraud schemes against the elderly and other vulnerable individuals.  In addition to the monetary settlement, $127.5 million of which will be set aside for victim restitution, Epsilon has entered into a deferred prosecution agreement with the government, agreed to implement significant compliance measures to safeguard consumer data, and agreed to maintain a procedure for consumers to request that their data not be sold.  USAO CO
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