DOJ Enforcement

October 7, 2015

Kentucky-based nursing home pharmacy PharMerica Corp. agreed to pay $9.25 million to resolve allegations it violated the False Claims Act by soliciting and receiving kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the anti-epileptic prescription drug Depakote for nursing home patients.  The settlement is part of the continuing fallout of the $1.5 billion settlement Abbott entered into with the government in May 2012 to resolve Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including PharMerica.  The settlement partially resolves allegations raised in two whistleblower lawsuits brought 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 $1 million from the federal share of the settlement amount. Whistleblower Insider

October 7, 2015

Phoenix-based Serenity Hospice and Palliative Care agreed to pay $2.2 million to resolve allegations it violated the False Claims Act by submitting false bills to Medicare for hospice services.  In addition, Ruth Siegel, a former nurse and the founder and former president of Serenity, agreed to be excluded from Medicare, Medicaid, and all other federal health care programs for five years.  The allegations originated in a whistleblower lawsuit filed by Cheryl Sifford under the qui tam provisions of the False Claims Act.  She will receive a yet-to-be-determined whistleblower award from the government’s recovery.  DOJ (AZ)

October 6, 2015

Fifth Third Bank agreed to pay $85 million to resolve civil fraud claims arising from the bank’s origination of residential mortgage loans insured by the Federal Housing Administration.  FTB made a voluntary disclosure of approximately 1,400 mortgage loans it had certified as eligible for FHA insurance, later determined were materially defective and thus ineligible for FHA insurance, but never self-reported to HUD, resulting in millions of dollars in HUD losses.  This matter arose, in part, from the filing of a whistleblower complaint under the qui tam provisions of the False Claims Act.  DOJ (NY)

October 5, 2015

BP agreed to a settlement with the US and the five Gulf states worth $20.8 billion to resolve civil claims arising from the April 2010 Macondo well blowout and the massive oil spill that followed in the Gulf of Mexico.  The global settlement resolves the governments’ civil claims under the Clean Water Act and natural resources damage claims under the Oil Pollution Act, as well as economic damage claims of the five Gulf states and local governments.  It is the largest settlement with a single entity in the DOJ’s history.  The destruction of the Deepwater Horizon drilling rig sent more than three million barrels of oil into the Gulf of Mexico over a 3 month period, resulting in oil slicks that extended across more than 43,000 square miles, affecting water quality and exposing aquatic plants and wildlife to harmful chemicals.  Oil was deposited onto at least 400 square miles of the sea floor and washed up onto more than 1,300 miles of shoreline from Texas to Florida.  DOJ

October 2, 2015

Guardian Hospice of Georgia LLC, Guardian Home Care Holdings Inc.and AccentCare Inc. agreed to pay $3 million to resolve allegations they knowingly submitted false claims to Medicare for hospice patients who were not terminally ill.  The allegations originated in a whistleblower lawsuit filed by former Guardian employees Rose Betts and Jennifer Williams under the qui tam provisions of the False Claims Act.  Ms. Betts and Ms. Williams will receive a whistleblower award of approximately $510,000.  DOJ

October 1, 2015

Nurses’ Registry and Home Health Corporation and the Estate of its former owner, the deceased Lennie House, agreed to pay $16 million to resolve allegations that Nurses’ Registry, at the direction of Lennie House, violated the False Claims Act by fraudulently billing Medicare for medically unnecessary home health services and for services tainted by kickbacks provided by the company and House to local physicians and others who referred patients to Nurses’ Registry.  According to the government, Nurses’ Registry falsified medical records to make it appear as if patients had a medical need for skilled nursing or therapy services, or appear as if the patients were homebound.  In addition to billing Medicare for unnecessary or non-reimbursable home health services, Nurses’ Registry and House provided tickets to athletic events and concerts, and provided other things of value, to doctors and referral sources in order to induce or reward patient referrals.  The allegations originated in a whistleblower lawsuit filed by former employees Alisia Robinson-Hill and David Price under thequi tam provisions of the False Claims Act.  They will receive a yet-to-be-determined whistleblower award from the settlement proceeds.  DOJ (KY)

October 1, 2015

Strata Pathology Laboratory, Inc. (known as StrataDx) agreed to pay $558,793 to resolve allegations it violated the False Claims Act by inducing physicians to refer Medicare and Medicaid patients to Strata by paying kickbacks in the form of sham consulting fees and providing unlawful discounts to physicians.  According to the settlement agreement, Strata acknowledged paying consulting fees to two referring physician practices that did not provide consulting services in exchange.  Strata also acknowledged entering into “account billing” arrangements with seven referring physician practices that facilitated fee-splitting between the parties.  The allegations originated in a whistleblower lawsuit filed by a former Strata employee under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-determined whistleblower award from a portion of the government’s recovery.  DOJ (MA)

September 30, 2015

Former chief financial officer of Siemens S.A. – Argentina Andres Truppel pleaded guilty to conspiring to pay tens of millions of dollars in bribes to Argentine government officials to secure, implement and enforce a $1 billion contract to create national identity cards.  In connection with his guilty plea, Truppel admitted he engaged in the decade-long scheme which involved concealing the illicit payments through various means, including using shell companies associated with intermediaries to disguise and launder the funds and by paying $7.4 million as part of a hedging contract with a foreign currency company incorporated in the Bahamas.  Truppel also admitted he used a $27 million contract between a Siemens entity and a company called MFast Consulting AG that purported to be for consulting services to conceal bribes to Argentine officials.  DOJ.

September 30, 2015

Tractor Supply Company Inc. and Tractor Supply Company of Texas L.P. agreed to pay a $775,000 penalty and implement a compliance program to resolves EPA allegations they imported and sold more than 28,000 all-terrain vehicles, off-highway motorcycles and engines that did not comply with federal Clean Air Act certification and emission information labeling requirements.  DOJ

September 29, 2015

Juan Carlos Delgado and Nereyda Infante, who owned and operated several Orlando-based health care clinics under variations of the name Prestige Medical, were sentenced to five years in prison and to pay $1,520,850 in restitution and forfeit $1,520,850 for their role in a $2.4 million health care fraud scheme.  According to admissions made in connection with their guilty pleas, between February 2012 and September 2014, the defendants fraudulently billed Medicare on behalf of the Prestige clinics for services never provided and for medications not prescribed or administered.  In particular, Delgado and Infante admitted to billing Medicare for pentostatin, an expensive anticancer chemotherapeutic medication used to treat Leukemia, despite never administering the drug.  DOJ