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Government Enforcement Actions

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November 6, 2014

Medical device maker Biotronik Inc. agreed to pay $4.9M to resolve allegations it violated the False Claims Act by paying kickbacks to induce physicians to use its products. Specifically, the government charged that Biotronik induced electrophysiologists and cardiologists practicing in Nevada and Arizona to use Biotronik pacemakers, defibrillators and cardiac resynchronization therapy devices by paying them in the form of repeated meals at expensive restaurants and inflated payments for membership on a physician advisory board. The allegations first arose in a whistleblower lawsuit filed by a former Biotronik employee, Brian Sant, under the qui tam provisions of the False Claims Act. Sant will receive a whistleblower award of $840,000. DOJ

November 5, 2014

Elsa Ruiz, the owner and administrator of the Miami home health care companies Professional Home Care Solutions Inc. and LTC Professional Consultants Inc., was sentenced to serve 80 months in prison and pay $45M in restitution for her participation in a $74M Medicare fraud scheme. According to admissions during her plea hearing, Ruiz and her co-conspirators operated LTC and Professional Home Care for the purpose of billing the Medicare program for expensive physical therapy and home health care services that were not medically necessary or were not provided. Ruiz’s primary role in the scheme was to negotiate and pay kickbacks to patient recruiters and to otherwise oversee the schemes. DOJ

November 3, 2014

California-based medical diagnostics and life sciences manufacturing company Bio-Rad Laboratories Inc. agreed to pay $55M million to settle allegations it violated the Foreign Corrupt Practices Act (FCPA) by falsifying its books and records and failing to implement adequate internal controls in connection with sales it made in Russia and for making illegal bribes in connection with sales it made in Russia, Thailand and Vietnam. The company will pay $14.35M to the DOJ and $40.7M to the SEC.Whistleblower Insider

November 3, 2014

South Korea’s top two automakers Hyundai Motor Company and Kia Motors Corporation agreed to pay a $100 million civil penalty to settle charges they violated the Clean Air Act by selling more than one million vehicles that will emit roughly 4.75 million metric tons of greenhouse gases in excess of what they certified to the Environmental Protection Agency (EPA). It is the largest civil penalty in Clean Air Act history.Whistleblower Insider

October 31, 2014

Tokyo-based automotive parts manufacturer Hitachi Metals Ltd. pleaded guilty and agreed to pay a $1.25M criminal fine for its role in a conspiracy to fix prices and rig bids for automotive brake hoses sold to Toyota Motor Corporation and certain of its affiliates and suppliers in the US and elsewhere. The charges against Hitachi are the latest in the department’s on-going investigation into anticompetitive conduct in the automotive parts industry. To date, 44 individuals have been charged and including Hitachi, 30 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of nearly $2.4B in fines. DOJ

October 30, 2014

San Francisco based hospital system Dignity Health (formerly known as Catholic Healthcare West) agreed to pay $37M to settle False Claim Act charges that 13 of its hospitals in California, Nevada and Arizona submitted false claims to Medicare and TRICARE by admitting patients for inpatient services who could have been treated on a less costly, outpatient basis. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Kathleen Hawkins, a former employee of Dignity. She will receive a whistleblower award of $6.25M. DOJ

October 29, 2014

Jigar Patel, a physical therapist assistant was sentenced to serve 50 months in prison and pay $1.9M in restitution for his role in a $14.9M scheme through which he and others billed Medicare for home health services they never provided, and provided beneficiaries with prescriptions for unnecessary painkillers and other narcotics to induce them to sign false medical documents to support the fraudulent billings. Patel and his co-conspirators carried out their scheme using five home health care companies – Physicians Choice Home Health Care LLC, Quantum Home Care Inc., First Care Home Health Care LLC, Moonlite Home Care Inc., and Phoenix Visiting Physicians. DOJ

October 29, 2014

North Florida Shipyards and its president, Matt Self, agreed to pay $1M to resolve allegations they violated the False Claims Act by creating a front company, Ind-Mar Services Inc., to improperly secure Coast Guard contracts that were designated for Service Disabled Veteran Owned Small Businesses (SDVOSBs). The allegations originated in a whistleblower lawsuit filed by Robert Hallstein and Earle Yerger under the qui tam provisions of the False Claims Act. They will receive a whistleblower award of $180,000.DOJ

October 29, 2014

Medical device maker EBI LLC, doing business as Biomet Spine and Bone Healing Technologies and Biomet Inc., agreed to pay $6M to resolve allegations it violated the False Claims Act by paying kickbacks to induce use of its bone growth stimulators, which are used to repair fractures that are slow to heal. Specifically, the government alleged that from 2001 to 2008 EBI paid staff at doctors’ offices (through personal service agreements) to influence doctors to order its bone growth stimulators. The allegations originated in a whistleblower lawsuit filed by former EBI product manager Yu Yue under the qui tam provisions of the False Claims Act, who will receive an undisclosed whistleblower award. DOJ

October 28, 2014

Columbia University agreed to pay $9M to settle allegations it defrauded the government of grant funding for AIDS and HIV related work. Specifically, the government charged that as the grant administrator for ICAP (formerly known as International Center for AIDS Care and Treatment Programs), Columbia was required but failed to verify for nearly 200 ICAP employees that they performed the work for which they received grant funding. This resulted in Columbia obtaining grants for work that was not actually performed on the project being funded. Whistleblower Insider
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