Government Enforcement Actions

March 18, 2016

Alex Wisidagama, the former global manager for government contracts of Singapore-based defense contracting firm Glenn Defense Marine Asia, was sentenced to 63 months in prison and to pay $34.8 million in restitution for his participation in a fraud scheme that over-billed the U.S. Navy by more than $34 million for ship husbanding services.  To date, 10 individuals have been charged in connection with this scheme with nine pleading guilty so far including Commander Michael Vannak Khem Misiewicz, Captain Daniel Dusek, Naval Criminal Investigative Service Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug.  DOJ

March 17, 2016

Carlos Medina, owner of Miami-area medical clinics Doral Community Clinic Inc. and Advanced Medical of Doral Inc. was sentenced to 82 months in prison for his role in a Medicare fraud scheme that caused more than $3 million in losses.  The clinics purportedly provided medically necessary services to Medicare beneficiaries, but in reality charged cash kickbacks in exchange for prescriptions for home health care services.  Some of the beneficiaries who frequented the clinics did not meet Medicare’s criteria for the prescribed services and some of the services prescribed by the medical professionals at Doral and Advanced Medical were never provided by the home health agencies to which the patients were referred.  DOJ

March 16, 2016

John Bennett, the former founder and CEO of Canada-based Bennett Environmental Inc. was convicted of conspiring to pay kickbacks to guarantee the award of soil treatment contracts to his company for work at Federal Creosote, a Superfund site located in Manville, New Jersey.  Specifically, in exchange for gifts and cash payments, the project manager at Federal Creosote provided Bennett with “last looks” at confidential competitor bids, allowing Bennett to outbid its competitors without independently determining its price, thereby guaranteeing an award to the company and undermining the competitive bid process on this federally-funded project.  DOJ

March 15, 2016

Tennessee-based Southern Tennessee Medical Center agreed to pay roughly $2.5 million to settle charges it violated the False Claims Act by submitting Medicare claims for medically unnecessary days of in-patient geriatric psychiatric services and in-patient geriatric psychiatric services for which a Physician Certification or Recertification was not obtained.  DOJ (MDTN)

March 15, 2016

The German shipping companies Briese Schiffahrts GmbH & Co. KG and Briese Schiffahrts GmbH & Co. KG who owned and operated the cargo ship M/V BBC Magellan, pleaded guilty to failure to maintain an accurate oil record book, in violation of the Act to Prevent Pollution from Ships and tampering with witnesses by persuading them to provide false statements to the U.S. Coast Guard concerning a bypass hose on the vessel that was being used to discharge oil into the sea.  The companies were sentenced to pay a total of $1.25 million in fines and a $250,000 community service payment to the National Fish and Wildlife Foundation to fund projects that enhance coastal habitats of the Gulf of Mexico and bolster priority fish and wildlife populations.  In addition, the ship M/V BBC Magellan is banned from doing business in the United States for the next five years.  DOJ

March 15, 2016

Geoffrey Alexander Ramer was sentenced to 108 months in prison and to pay $2.9 million in restitution and forfeit $1.9 million for his role in a sweepstakes fraud scheme that victimized hundreds of elderly U.S. residents.  According to his guilty plea, Ramer owned and operated call centers located in Costa Rica which called U.S. residents, many of whom were elderly, and falsely informed them they had won a substantial cash prize in a sweepstakes but needed to pay purportedly refundable insurance fees to obtain the money.  Ramer and his co-conspirators kept the victims’ funds, never provided any winnings to the victims and used the funds to continue the call centers’ operations.  DOJ

March 14, 2016

Syracuse-based government contractor Hayner Hoyt Corporation agreed to pay $5 million to settle charges that its chairman and chief executive officer Gary Thurston, its president Jeremy Thurston, and its affiliate companies LeMoyne Interiors and Doyner Inc., violated the False Claims Act by exploiting contracting opportunities reserved for service-disabled veterans.  According to the government, “by diverting contracts and benefits intended for our nation’s service-disabled veterans . . . , the defendants undercut Congress’s intent of encouraging contract awards to legitimate service-disabled veteran-owned small businesses.” The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Hayner Hoyt subsidiary employee John Rubar.  He will receive a whistleblower award of $875,000 from the proceeds of the government’s recovery.  Whistleblower Insider

March 25, 2016

The CFTC has filed charges against Virginia resident Tracy Lee Thomas and his firm based in the Cayman Islands Marbury Advisors Inc. with allegations of fraudulently soliciting more than $1.2 million in a commodity futures scheme.  CFTC

March 24, 2016

New York announced a groundbreaking $3.1 million agreement with Focused Technologies Imaging Services, LLC (“FTIS”), its sole owner Charles “Chuck” Tobin, and its former co-owner Julie Benware, for unlawfully outsourcing government-funded work to a subcontractor based in Mumbai, India in 2008 and 2009. The outsourcing was illegal because even though FTIS was required to perform the work at a warehouse in Albany, New York, FTIS unlawfully sent personal information of over 16 million people to a foreign business that was unauthorized to receive this information. The outsourcing also resulted in the failure of FTIS to adhere to a requirement that over 50% of the labor hours of the contract be performed by individuals with disabilities. NY

March 24, 2016

A Montgomery County, Alabama, resident pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft. According to court documents, between January 2013 and August 2015, Wendy Huff, worked at two loan companies in Montgomery, Alabama, and had access to the means of identification of customers, including their names, social security numbers and dates of birth. Huff agreed to steal names from her employers and provide them to James Vernon Battle, identified as a co-conspirator in the indictment. The government alleges that Battle used those names to file over 335 returns claiming more than $400,000 in fraudulent refunds and that he directed the Internal Revenue Service (IRS) to issue the anticipated tax refunds in the form of prepaid debit cards and U.S. Treasury checks, which were mailed to addresses in Montgomery including Huff’s residence. Huff subsequently delivered the prepaid debit cards to Battle. DOJ