Government Enforcement Actions

February 17, 2015

Alexander Lara, owner of Miami-based home health care company Longcare Home Health Corporation, pleaded guilty in connection with a $13M Medicare fraud scheme involving kickbacks and bribes to Medicare beneficiaries, doctors’ offices, medical clinics and others in exchange for patient referrals and fraudulent prescriptions to support fraudulent billings to Medicare.  DOJ

February 13, 2015

Illinois physician Dr. Michael J. Reinstein pleaded guilty to the crime of receiving illegal kickbacks and benefits totaling nearly $600,000 from pharmaceutical manufacturer Teva Pharmaceuticals USA Inc. and its subsidiary IVAX LLC in exchange for regularly prescribing the anti-psychotic drug clozapine to his patients.  Reinstein also agreed to pay $3.79M to settle a parallel civil lawsuit alleging he violated the False Claims Act for causing the submission of false claims to Medicare and Medicaid for the clozapine he prescribed for thousands of elderly and indigent patients in at least 30 Chicago-area nursing homes and other facilities.  In March 2014, Teva Pharmaceuticals and IVAX paid $27.6M million for their role in the kickback scheme. DOJ

February 12, 2015

Three importers agreed to pay more than $3M to resolve allegations they violated the False Claims Act by lying to US Customs and Border Protection agents to evade customs duties on imports of aluminum extrusions from China.  The companies, which included California-based C.R. Laurence Co. Inc., Florida-based Southeastern Aluminum Products Inc.and Texas-based Waterfall Group LLC, sell shower doors and shower enclosures made with the aluminum extrusions.  The charges were first raised in a whistleblower lawsuit brought by James F. Valenti Jr. under the qui tam provisions of the False Claims Act.  He will receive a whistleblower award of $555,000.  DOJ

February 11, 2015

Two US Army sergeants, James Edward Norris of Fort Irwin, California, and Seneca Darnell Hampton of Fort Benning, Georgia, pleaded guilty for accepting bribes from Afghan truck drivers at Forward Operating Base Gardez, Afghanistan in exchange for allowing the drivers to take thousands of gallons of fuel from the base for resale on the black market.  DOJ

February 11, 2015

Delaware-based pharmaceutical manufacturer AstraZeneca LP agreed to pay $7.9M to settle charges it violated the False Claims Act by engaging in an illegal kickback scheme with pharmacy benefit manager Medco Health Solutions.  The government alleged, among other things, that AstraZeneca agreed to provide remuneration to Medco in exchange for Medco maintaining for AstraZeneca’s Nexium drug “sole and exclusive” status on certain Medco formularies and through other marketing activities.  The charges originated with a whistleblower lawsuit filed by former AstraZeneca employees Paul DiMattia and F. Folger Tuggle under the qui tam provisions of the False Claims Act.  They will collectively receive a whistleblower award of $1,422,000.  Whistleblower Insider

February 10, 2015

The DOJ succeeded in entering a permanent injunction against San Francisco-based soy and tofu company Fong Kee Tofu Co. Inc., along with the firm’s co-owner and CEO, to prevent their  distribution of adulterated tofu and other soy food products.  DOJ

February 10, 2015

Iowa-based home healthcare company ResCare Iowa Inc. agreed to pay $5.63M to resolve allegations it violated the False Claims Act by submitting false home healthcare billings to the Medicare and Medicaid programs.  DOJ

February 10, 2015

Orelvis Olivera, the owner of Miami home health care agency Acclaim Home Healthcare Inc., pleaded guilty for his role in a $6.9M Medicare fraud scheme.  Olivera admitted he and his co-conspirators billed Medicare for expensive physical therapy and home health care services not medically necessary and paid kickbacks and bribes to patient recruiters in exchange for patient referrals.  DOJ

February 9, 2015

The DOJ announced that under its settlements with 5 of the nation’s largest mortgage servicers, 952 service members are eligible to receive over $123M for mortgage foreclosures that violated the Servicemembers Civil Relief Act.  The statute generally prohibits non-judicial foreclosures against service members who are in military service or within the applicable post-service period.  The five mortgage servicers are JPMorgan Chase; Wells Fargo Bank and Wells Fargo & Co.; Citi Residential Lending Inc., Citibank and CitiMortgage Inc.;GMAC Mortgage, Ally Financial Inc. and Residential Capital LLC; and BAC Home Loans Servicing LP (formerly known as Countrywide Home Loans Servicing LP).  DOJ

February 9, 2015

Wesley Harlan Kingsbury, general manager of California-based Alpha Ambulance Inc., was sentenced to 78 months in prison for his role in a $5.5M Medicare fraud scheme under which his company billed Medicare for ambulance transportation services for individuals that did not need them.  DOJ