DOJ Enforcement

July 17, 2014

William Pomponi, a former vice president of regional sales at Alstom Power Inc., the Connecticut-based power subsidiary of Alstom SA, the French power and transportation company, pleaded guilty for his participation in a scheme to pay bribes to foreign government officials in violation of the Foreign Corrupt Practices Act (FCPA). Three Alstom corporate executives and Marubeni, a major Japanese corporation, have now pleaded guilty to a seven-year scheme to pay bribes to Indonesian officials to secure the $118M Tarahan power contract there. DOJ

July 16, 2014

North Carolina based recycling business, P&W Waste Oil Services, was ordered to pay restitution of more than $21M for clean-up costs associated with the environmental contamination caused by the company’s unlawful handling and dilution of used oil contaminated with polychlorinated biphenyls (PCBs). DOJ

July 14, 2014

Citigroup agreed to pay $7B to resolve government claims related to the bank’s packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) which, according to the government, “contributed mightily to the financial crisis that devastated our economy in 2008.” The settlement includes a $4B civil penalty — the largest penalty to date under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). Whistleblower Insider

July 11, 2014

Luis Alberto Garcia Perojo of Florida was sentenced to serve 4 years in prison and ordered to pay $6.2M in connection with a $10.5M Medicare fraud scheme involving physical and occupational therapy services. From November 2007 through August 2009, Garcia submitted on behalf of Renew Therapy Center, an outpatient rehabilitation facility he helped operate, roughly $10.5M in fraudulent claims for reimbursement to Medicare for therapy services not legitimately prescribed or provided. DOJ

July 10, 2014

Four patient recruiters pleaded guilty in connection with a $20M health care fraud scheme involving the now defunct Miami-based home health care agency Trust Care Health Services. The defendants recruited patients for Trust Care and solicited and received kickbacks and bribes from the owners and operators of Trust Care in return for allowing the agency to bill the Medicare program on behalf of the recruited Medicare patients for home health care and therapy services that were not medically necessary and/or not provided. DOJ

July 8, 2014

Virginia-based move management company RE/MAX Allegiance Relocation Services agreed to pay roughly half a million dollars to resolve allegations it violated the False Claims Act by overbilling the government for transportation services. The government alleged RE/MAX charged the government for federal employee relocation services it never provided and charged inflated rates for relocation services it did provide by charging inapplicable tariff rates. Former RE/MAX employee Michael Angel will receive a whistleblower reward in an undisclosed amount under the qui tam provisions of the False Claims Act. DOJ

July 7, 2014

Vahe Tahmasian of Glendale, California was sentenced to 121 months in prison and ordered to pay roughly a million dollars for his role in a $1.5M Medicare fraud and identity theft scheme. Tahmasian and his co-conspirators purchased Orthomed Appliance Inc., a DME supply company, stole the personal identifying information of Medicare beneficiaries and doctors in the company’s patient files, and used that information to submit a large volume of fraudulent claims to Medicare. DOJ

July 3, 2014

SunTrust Mortgage Inc. agreed to pay $320M to resolve a criminal investigation of SunTrust’s administration of the Home Affordable Modification Program (HAMP). According to the government, SunTrust misled numerous customers who sought mortgage relief through HAMP by making material misrepresentations and omissions to borrowers in HAMP solicitations, and failing to process HAMP applications in a timely fashion. As a result of SunTrust’s mismanagement of HAMP, thousands of homeowners who applied for a HAMP modification with SunTrust suffered serious financial harms. DOJ

July 1, 2014

Detroit-area physician, Walayat Khan, pleaded guilty for his role in a $7M health care fraud scheme. According to court documents, beginning in January 2009, Dr. Khan and others agreed that he would refer Medicare beneficiaries to Advance Home Health Care Services, Inc., Perfect Home Health Care Services, LLP and other Detroit-area home health care agencies for medically unnecessary home health services. Dr. Khan signed medical documents for these beneficiaries, falsely certifying they required home health care and they were under his care. The complicit home health care agencies then used Dr. Khan’s false documents to support their claims to Medicare for home health services that were never rendered or not medically necessary. DOJ

July 1, 2014

Dietary supplement maker Mira Health Ltd. agreed to settle government charges it violated the Federal Food, Drug and Cosmetic Act (FDCA) by manufacturing and distributing dietary supplements that were adulterated. The government’s actions resulted from a series of inspections of Mira’s manufacturing facility, which revealed Mira’s failure to ensure that components, dietary supplements, packaging and labels were not mixed-up, contaminated or deteriorated. As part of the settlement, Mira agreed to a permanent injunction that requires it to cease all operations and to seek FDA approval before resuming operations. DOJ