Government Enforcement Actions

April 13, 2016

Nery Cowan, a former health care clinic consultant and Medicare biller for partial hospitalization program Greater Miami Behavioral Healthcare Center Inc. was sentenced to 135 months in prison and ordered to pay a $100,000 fine for her role in laundering money in connection with a $63 million health care fraud scheme.  As part of her guilty plea, Cowan admitted to directing and authorizing the payment of kickbacks and bribes to patient brokers and others in exchange for Medicare beneficiary referrals.  Cowan also admitted that Greater Miami personnel routinely falsified medical records affiliated with these recruited Medicare beneficiaries to support false claims to Medicare.  Cowan also admitted that she, along with co-defendants Dean Butler and Irina Mora, took great lengths to conceal kickback payments to shell companies owned by “patient brokers” who, on behalf of Greater Miami, solicited Medicare beneficiaries from assisted living facilities, halfway houses and drug courts located throughout the Southern District of Florida.  Judge Bloom previously sentenced Butler and Mora to 16 years and nine years in prison, respectively, following their guilty pleas.  DOJ

April 13, 2016

Florida Pain Medicine Associates, Inc. and its owners, Drs. Bart Gatz, Alexis Renta, and Albert Rodriguez, agreed to pay $1.1 million to resolve allegations they violated the False Claims Act by billing Medicare for medically unnecessary nerve conduction studies.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Rosa Gomez, who had worked in Florida Pain Medicine’s billing department.  She will receive a whistleblower award of $242,000 from the proceeds of the government's recovery.  DOJ (SDFL)

April 12, 2016

Cecil Alexander Kent Jr. pleaded guilty to fraud charges for his role in a scheme to defraud Medicare out of approximately $6.2 million while he acted as an unlicensed physician at a Detroit in-home physician services company.  Kent admitted that while he was employed at B&M Visiting Doctors PLC and while he was unlicensed, he saw patients and falsified related patient records, including medical documents and billing documents, all under the name of a licensed medical doctor.  He admitted that among those documents falsified were prescriptions for controlled substances.  DOJ

April 11, 2016

Tennessee-based drug urine screening company PremierTox 2.0, Inc. (previously called Nexus) agreed to pay $2.5 million to resolve allegations it violated the False Claims Act by submitting false claims when billing Medicare, TennCare and Kentucky Medicaid for drug urine screening services.  According to the government, PremierTox had a swapping arrangement under which Nexus gave below cost discounts on its urine drug screen tests to patients in Tennessee without insurance, in exchange for physicians’ referring their patients with Medicare or TennCare coverage to Nexus. The government also contended that in Tennessee Nexus submitted excessive claims to Medicare and TennCare for laboratory testing that was beyond what was medically reasonable and necessary.  The allegations originated in two whistleblower lawsuits filed under the qui tam provisions of the False Claims Act by a former office manager of a pain clinic and the former CEO of PremierTox.  The office manager will receive a whistleblower award of $361,250, and the former CEO will receive a whistleblower award of $56,250.  DOJ (MDTN)

April 11, 2016

Goldman Sachs agreed to pay $5.06 billion to settle charges relating to alleged misconduct in the sale of its residential mortgage-backed securities or what the government described as "serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail."  Whistleblower Insider

April 11, 2016

Naseem Minhas, the owner and operator of Detroit-area home health care agency TriCounty Home Care Services Inc. pleaded guilty today for his participation in a $4 million health care fraud scheme.  According to admissions made as part of his plea agreement, Minhas paid a physician and recruiters to refer Medicare beneficiaries to TriCounty and sign medical documents falsely certifying that they required home health care.  Minhas, a licensed physical therapist, also admitted that he assisted in creating fake patient files to make it appear as though the patients needed and received services that were unnecessary or not provided.  DOJ

May 6, 2016

New York announced the sentencing of the remaining three defendants in an elaborate bid-rigging conspiracy that illegally steered multi-million dollar public works contracts for Monroe County to favored and connected companies, resulting in the restraint of competition. The four defendants were originally indicted in November 2013 and charged with a scheme to rig the bidding processes for a number of multi-million dollar public works contracts in Monroe County. Those contracts included a $99 million contract to provide upgrades and maintenance for the County’s IT infrastructure (the “IT project”), and a $212 million contract to provide upgrades and maintenance for the County’s public safety and security systems (the “Public Safety project”). NY

May 4, 2016

A Brooklyn, New York, business owner pleaded guilty to two counts of filing false tax returns. According to court documents and information presented in court, Michael Stern, 48, was the founder and operator of Prestige Optical, a retailer of sunglasses and eyeglasses. For the 2006 and 2007 tax years, Stern filed false federal income tax returns with the Internal Revenue Service (IRS) on which he failed to report approximately $656,780 of income from online retail sales. Stern faces a statutory maximum sentence of three years in prison and a fine of $250,000 for each count of filing a false tax return. As part of his plea agreement, Stern also agreed to pay restitution to the IRS in the amount of $190,781. DOJ

May 3, 2016

Pennsylvania joined with other states and the federal government in a $306 million civil settlement that resolves allegations that Olympus America, Inc. and some of its subsidiaries paid illegal kickbacks to healthcare providers. The settlement was the result of a whistleblower lawsuit – United States et al., ex rel. John Slowik v. Olympus America, Inc., et al – filed in New Jersey. The lawsuit alleged that Olympus used improper financial incentives to induce doctors and hospital executives to buy a wide ranging array of its endoscopes and other surgical equipment, and to thereby unlawfully increase sales and gain market share. PA, NY

May 3, 2016

New York announced a settlement with Aby J. Rosen, a major contemporary art collector, for failing to pay millions in sales and use taxes on art acquisitions made by his companies. Rosen will pay $7 million following the Attorney General’s investigation into the use of resale certificates. The Attorney General alleges that beginning in 2002, Mr. Rosen bought or commissioned more than $80 million worth of contemporary art, but did not pay applicable State and City sales and use taxes on the purchases. Between 2002 and 2015, Mr. Rosen used two companies, known as 22nd Century Acquisitions LLC and Lever House Artwork LLC, to purchase and, in Lever House Artwork’s case, commission artwork, claiming an exclusion from sales tax on the basis that the purchases and commissions were for resale. NY