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October 24, 2016

Brazilian aircraft manufacturer Embraer S.A. agreed to pay a penalty of more than $107 million in connection with schemes involving the bribery of government officials in the Dominican Republic, Saudi Arabia and Mozambique, and to pay millions more in falsely recorded payments in India via a sham agency agreement.  According to the company’s admissions, Embraer executives and employees paid bribes to government officials and falsified books and records in connection with aircraft sales to foreign governments and state-owned entities in multiple countries.  In 2008, Embraer paid $3.52 million to an influential government official in the Dominican Republic via a false agency agreement to secure a contract to sell the Dominican Air Force eight military aircraft for approximately $92 million.  In 2010, Embraer paid $1.65 million to an official at a Saudi Arabian state-owned and -controlled company via a false agency agreement to secure that instrumentality’s agreement to purchase three aircraft from Embraer for approximately $93 million.  In 2008, Embraer paid $800,000 via a false agency agreement with an intermediary designated by a high-level official at Mozambique’s state-owned commercial airline, Linhas Aéreas de Moçambique S.A. (LAM), to secure LAM’s agreement to purchase two aircraft from Embraer for approximately $65 million.  In 2009, Embraer paid an agent $5.76 million pursuant to a false agency agreement with a shell company in connection with a contract it secured to sell the Indian Air Force three aircraft for approximately $208 million.  In total, Embraer earned profits of nearly $84 million on the foregoing aircraft sales.  DOJ

October 24, 2016

Daybreak Partners, LLC, a holding company for a number of subsidiaries that operate and manage skilled nursing facilities throughout Texas, agreed to pay $5.3 million to resolve allegations that they billed Medicare and Medicaid for materially substandard nursing services.  Specifically, the government alleged that skilled nursing services provided at four nursing facilities Daybreak owned and managed (Deerings Nursing and Rehabilitation, L.P., Mansfield Nursing and Rehabilitation, L.P., Marine Creek Nursing and Rehabilitation, L.P. and Mineral Wells Nursing and Rehabilitation, L.P.) were materially substandard and/or worthless because Daybreak: (i) failed to follow appropriate fall protocols; (ii) failed to follow appropriate pressure ulcer and infection control protocols; (iii) failed to properly administer medications; (iv) failed to follow doctors’ orders; (v) failed to provide appropriate mental health treatment; (vi) failed to answer several residents’ call lights promptly; (vii) failed to institute appropriate infection control measures; (viii) failed to provide a habitable living environment, adequate equipment, and needed capital expenditures; and (ix) failed to investigate and report serious incidents to appropriate authorities on several occasions.  DOJ (NDTX)  

October 21, 2016

New York-based hematology and oncology practice Hudson Valley Associates agreed to pay $5.31 million to settle charges of violating the False Claims Act by improperly waiving patient copayments and submitting claims for services it did not provide and/or were not permitted under the Medicare and Medicaid program rules.  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)

October 21, 2016

Mark Gilmore, owner of Florida compound pharmacy QMedRx, agreed to pay $4.25 million to settle charges that he violated the False Claims Act by billing the government for services that were not reimbursable.  Specifically, the government contends that QMedRx submitted to federal healthcare programs compounded prescriptions that were tainted within the meaning of the Anti-Kickback Statute. The government is still pursuing penalties and fines from other participants within QMedRx.  DOJ (MDFL)

October 21, 2016

Gallia Graeca Shipping Ltd. and Angelakos (Hellas) S.A., the companies that own and operate a Greek shipping vessel, were sentenced to a $1.3 million fine for the dumping of oily waste at sea.  In June, they were found guilty of violating the Act to Prevent Pollution from Ships, falsifying records in a federal investigation and engaging in a scheme to defraud the United States.  According to the evidence at trial, the defendants' cargo ship named the M/V Gallia Graeca travelled from China to Seattle with an inoperable pollution-control device and  discharged overboard approximately 5,000 gallons of oily bilge water.  The defendants then concealed it from the Coast Guard by making false statements to inspectors and making false statements and omissions in the ship’s oil record book.  DOJ

October 19, 2016

Karen L. Finley, former CEO of a traffic light enforcement camera vendor, was sentenced to 14 months in prison for her role in a multi-year bribery and fraud scheme under which her company made campaign contributions to elected public officials in Columbus and Cincinnati Ohio with the understanding that the officials would assist the company in obtaining or retaining municipal contracts.  DOJ

October 19, 2016

Elaine Davis and Pramela Ganji, the owner and medical director of New Orleans medical service company Christian Home Health Inc., were respectively sentenced to 96 months and 72 months in prison for their involvement in a $34 million Medicare fraud scheme.  According to evidence introduced at trial, Davis directed a massive fraud scheme through her company, using elderly and disabled Medicare recipients in New Orleans and adjacent communities to fraudulently bill Medicare for home health care services these patients did not require.  DOJ

October 17, 2016

Ohio-based nursing home pharmacy Omnicare, Inc. agreed to pay roughly $28 million to resolve charges of violating the False Claims Act by soliciting and receiving kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the prescription drug, Depakote, for nursing home patients.  The settlement follows the May 2012 settlement under which Abbott agreed to pay $1.5 billion to resolve Abbott’s liability under the False Claims Act for, among other things, alleged kickbacks to nursing home pharmacies, including Omnicare and PharMerica Corp.  In October 2015, PharMerica agreed to pay $9.25 million to settle its role in the alleged scheme.  The allegations underlying this settlement as well as the prior Abbott and PharMerica settlements originated in two whistleblower lawsuits filed by former Abbott employees Richard Spetter and Meredith McCoyd under the qui tam provisions of the False Claims Act.  Ms. McCoyd will receive a whistleblower award of $3 million from the proceeds of this settlement.  Whistleblower Insider

October 14, 2016

John Bertrand Beliveau II, a former Naval Criminal Investigative Service supervisory special agent, was sentenced to 144 months in prison and ordered to pay $20 million in restitution to the Navy for disclosing sensitive law enforcement reports to a defense contractor who was the target of a criminal fraud investigation in exchange for cash, luxury travel and the services of prostitutes.  According to admissions made as part of his plea agreement, Beliveau helped former Glenn Defense Marine Asia CEO Leonard Francis perpetrate a massive fraud scheme on the U.S. Navy by providing information that allowed Francis to avoid, stall and thwart criminal investigations into misconduct by GDMA.  DOJ

October 12, 2016

Fred Witmer and Gary Jury, the owners of Indiana biofuel producers Triton Energy LLC and Gen2 Renewable Diesel LLC, pleaded guilty to conspiracy, fraud and false statements for participating in a scheme that generated over $60 million in fraudulent tax credits and EPA renewable fuels credits at Triton.  Although the credits required that the fuel be used domestically for transportation, Witmer admitted selling it for uses that included the production of fire starter logs and asphalt and also for power generation.  As part of their pleas, Witmer and Jury agreed to serve a sentence of 57 months and 30 months, respectively.  DOJ
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