DOJ Enforcement

December 16, 2015

Louisiana doctors Barbara Smith and Roy Berkowitz and registered nurse Beverley Breaux were sentenced to 80 months, 64 months and 50 months in prison, and to pay $9,484,939, $4,952,816 and $2,057,179 in restitution, respectively, for their roles at the center of a $50 million health care fraud scheme.  Specifically, Smith and Berkowitz falsely certified that thousands of Medicare recipients were homebound and required nursing or therapy services to be provided in their homes, and Breaux falsely certified that these patients were homebound and falsely claimed to have treated patients she had not seen.  DOJ

December 16, 2015

Qualitest Pharmaceuticals, the company’s corporate shell, Vintage Pharmaceuticals, its parent Endo Pharmaceuticals, and seven of their affiliates, agreed to pay $39 million to 48 states and the federal government to settle charges they violated federal and state False Claims Acts by selling understrength chewable fluoride tablets.  As part of the settlement, Qualitest admitted the drug labeling for its chewable fluoride tablets represented fluoride amounts in line with guidelines of the American Dental Association and the American Academy of Pediatrics when in reality it used less than half of these represented amounts.  The allegations were first raised in a whistleblower lawsuit brought Dr. Stephan Porter under the qui tam provisions of the False Claims Act.  He will receive a whistleblower award of roughly $4.71 million from the proceeds of the government’s recovery.  Whistleblower Insider, NY, NH

December 10, 2015

Tishman Construction Corporation agreed to pay more than $20 million to settle charges of overbilling customers over a ten-year period.  Starting from at least 1999, Tishman Construction allegedly billed clients for large construction projects for hours never worked or for rates not agreed upon.  Tishman Construction carried out the scheme by, among other things, padding hours of unworked or unnecessary “guaranteed” overtime; and submitting time for certain foremen who were actually absent for sick days, major holidays and vacation days.  The government claims the company also billed clients at wage rates that exceeded those specified in the governing contracts.  Whistleblower Insider

December 9, 2015

Louisiana-based Bollinger Shipyards agreed to pay $8.5 million and release the government from contract claims to settle False Claims Act charges it misrepresented the longitudinal strength of patrol boats it delivered to the Coast Guard that resulted in the boats buckling and failing once they were put into service.  Bollinger was the subcontractor that performed design and conversion work on the Coast Guard’s existing fleet of 110-foot patrol boats.  According to the government, Bollinger provided the Coast Guard with engineering calculations that falsely represented the longitudinal strength of the boats and was two times greater than their actual longitudinal strength. The government further alleged Bollinger failed to follow the quality control procedures that were mandated by the contract that would have ensured against such engineering miscalculations.  DOJ

December 8, 2015

Vermont-based dairy farm Correia Farm Limited Partnership (d/b/a Wynsum Holsteins) and its co-owners Anthony and Barbara Correia and their son and limited partner Stephen Correia, agreed to a permanent injunction to prevent violations of the federal Food, Drug and Cosmetic Act (FDCA).  According to the government, the farm and its owners violated the FDCA by unlawfully administering new animal drugs for uses not approved by the FDA and unlawfully selling livestock for slaughter and human consumption despite the presence of unsafe drug residues in the animals’ edible tissues. DOJ

December 8, 2015

Three former civilian employees at the Marine Corps Logistics Base (MCLB) and one former employee of Georgia-based trucking company United Logistics were sentenced to prison following their guilty pleas to bribery and conspiracy offenses arising from their handling of military trucking contracts and theft of surplus military equipment.  Mitchell Potts, the former head of the Defense Logistics Agency (DLA) Transportation Office at the MCLB was sentenced to 10 years; Jeffrey Philpot, the former lead transportation assistant under Potts in the DLA Transportation Office, was sentenced to seven years; Shelby Janes, the former inventory control manager of the Distribution Management Center’s Fleet Support Division (FSD) at the MCLB, was sentenced to two years; and Kelli Durham, the former manager of United Logistics, was sentenced to six months.  In addition, they collectively were ordered to pay more than $2 million in forfeiture and restitution.  According to court documents, between 2008 and 2012, Potts and Philpot accepted hundreds of thousands of dollars in bribes from Christopher Whitman, United Logistics co-owner, to assure the company was awarded commercial trucking contracts from the base.  DOJ

December 8, 2015

A federal jury in Las Vegas convicted Anthony Brandel and James Warras of conspiracy, wire fraud and securities fraud for their roles in an approximately $10 million international investment fraud scheme involving numerous victims.  According to evidence presented at trial, Brandel and Warras conspired with others in the US and Switzerland to promote investments and loan instruments they knew to be fraudulent.  Specifically, they misrepresented to victims using fabricated bank documents that, for an up-front payment, a Swiss company known as the Malom (Make A Lot of Money) Group AG would provide access to lucrative investment opportunities and substantial cash loans.  DOJ

December 7, 2015

The former owner, operator and managers of Southern California ambulance company ProMed Medical Transportation were sentenced to prison for their role in a fraud scheme that resulted in more than $1.5 million in fraudulent claims to Medicare.  Yaroslav Proshak (aka Steven Proshak) was sentenced to serve 108 months in prison.  On December 2, Emilia Zverev and Sharetta Michelle Wallace were sentenced to serve 36 and 24 months, respectively.  In addition, Zverev and Wallace were ordered to pay restitution jointly and severally with Proshak in the amount of $804,755.  The evidence at trial showed that the defendants conspired to bill Medicare for ambulance transportation services for individuals that did not need such services.  The defendants also instructed ProMed EMTs to conceal the patients’ true medical conditions by altering paperwork and creating fraudulent documents to justify the services.  DOJ

December 7, 2015

Electrolux and General Electric Company announced the termination of the agreement under which Electrolux was to purchase General Electric’s appliance business.  The DOJ sued to block the $3.3 billion acquisition because it would combine two of the leading manufacturers of ranges, cooktops and wall ovens sold in the US, eliminating competition that benefits American consumers and home builders through lower prices and more options.  DOJ

December 3, 2015

The General Electric Company agreed to pay a $2.25 million civil penalty to resolve a complaint alleging violations of federal and state environmental laws in connection with GE’s use of an incinerator at a manufacturing facility it once owned and operated in Waterford, New York.  DOJ