Government Enforcement Actions

March 10, 2015

CommerceWest Bank agreed to pay $4.9 million to settle civil and criminal charges it violated the Bank Secrecy Act by facilitating consumer fraud by permitting third-party payment processor V Internet Corp LLC to make millions of dollars of unauthorized withdrawals from consumer bank accounts on behalf of fraudulent merchants.  DOJ

March 10, 2015

Johnson & Johnson subsidiary McNeil-PPC Inc. pleaded guilty to selling adulterated infants’ and children’s over-the-counter liquid medicines, including Infants’ and Children’s Tylenol Motrin.  As part of the criminal resolution, McNeil agreed to pay a criminal fine of $20 million and forfeit $5 million.  DOJ

March 9, 2015

Florida home health care companies Recovery Home Care Inc., Recovery Home Care Services Inc. and National Home Care Holdings LLC have agreed to pay $1.1 million to resolve allegations that Recovery Home Care violated the False Claims Act by improperly paying doctors for referrals of home health care services provided to Medicare patients.  According to the government, the physicians were over-compensated for any actual work they performed and, in reality, they were paid to induce them to refer their patients to Recovery Home Care in violation of the Anti-Kickback Statute and the Stark Law.  The allegations originated in a whistleblower lawsuit filed by former Recovery Home Care employee Gregory Simony under the qui tam provisions of the False Claims Act.  Simony will receive a whistleblower award of $198,000.  DOJ

March 6, 2015

New York physician Roman Johnson pleaded guilty for his involvement in a scheme to fraudulently bill Medicare for $14.2 million in claims for medically unnecessary treatments.  Johnson admitted that he and other medical providers at his clinic submitted claims to Medicare for medically unnecessary vitamin infusions, physical therapy, and occupational therapy that did not qualify for reimbursement by Medicare.  Johnson agreed to pay $5,386,363 in restitution which represents the total amount of money Medicare paid as the result of the fraudulent claims.  DOJ

March 6, 2015

Italian shipping company Carbofin S.p.A. (which owns and operates the M/T Marigola) was sentenced to pay an overall criminal penalty of $2.75 million for knowingly falsifying the vessel’s oil record book in violation of the Act to Prevent Pollution from Ships (APPS).  During 2013 and 2014, on numerous international voyages, senior members of the crew of the M/T Marigola directed the installation and use of a so-called “magic hose” to dispose of sludge, waste oil and oil-contaminated bilge water directly into the sea bypassing required pollution prevention equipment.  US Coast Guard inspectors learned of the violations from two junior engineering crew members of the ship.  DOJ March

March 3, 2015

The DOJ US Trustee Program entered into a national settlement agreement with JPMorgan Chase Bank N.A. requiring Chase to pay more than $50 million (including cash payments, mortgage loan credits and loan forgiveness) to over 25,000 homeowners who are or were in bankruptcy.  As part of the settlement, Chase acknowledges it filed in bankruptcy courts around the country more than 50,000 payment change notices that were improperly signed by persons who had not reviewed the accuracy of the notices.  DOJ

March 2, 2015

Patient safety consultant Dr. Charles Denham and his consulting company Health Care Concepts Inc. and his research organization Texas Medical Institute of Technology agreed to pay $1 million to settle allegations they violated the False Claims Act by soliciting and accepting kickbacks.  According to the government, Denham received monthly payments from CareFusion Corporation while serving as the co-chair of the Safe Practices Committee of the National Quality Forum which reviews, endorses and recommends standardized healthcare performance measures and practices, and Denham received these payments in exchange for recommending, promoting and/or arranging for the purchase of CareFusion’s product, ChloraPrep, in violation of the Federal Anti-Kickback Statute.  DOJ

March 1, 2015

Mark Bryan, owner of Delaware-based seafood wholesale business Harbor House Seafood, was sentenced to serve 26 months in prison pay more than $200,000 in fines for trafficking in illegally possessed oysters, and creating false health and safety records.  Harbor House was also ordered to pay a $250,000 fine.  DOJ

February 27, 2015

Miami residents Blanca Ruiz and Alina Fonts were sentenced to serve 72 months in prison for their roles in a $63M Medicare fraud scheme involving intensive mental health treatment programs.  According to the evidence, Ruiz and Fonts were employed at Health Care Solutions Network Inc. which purported to provide intensive treatment for severe mental illness but instead billed Medicare and Medicaid for treatment not medically necessary and often not provided at all.  DOJ

February 27, 2015

Gerald R. Funderburg Jr., owner of Funderburg Clinical & Community Services, was sentenced to 87 months in prison and to pay $1.45M in restitution for violating the False Claims Act through his submission of false claims to Medicare for purported psychotherapy services.  Specifically, Funderburg admitted he used the Medicare information and identities of hundreds of Medicare beneficiaries without their consent to submit claims for psychotherapy services not actually provided.  DOJ