Whistleblower Group

January 8, 2016

Dr. David G. Bostwick, owner of Virginia-based pathology lab Bostwick Laboratories Inc., agreed to pay up to $3.75 million to resolve charges of violating the False Claims Act for billing Medicare and Medicaid for medically unnecessary cancer detection tests and offering incentives to physicians to obtain Medicare and Medicaid business.  Specifically, Dr. Bostwick allegedly directed Bostwick Laboratories to bill Medicare and Medicaid for expensive cancer detection tests known as Fluorescent In Situ Hybridization (FISH) tests, as well as other tests, that were not medically necessary and were performed without the treating physicians’ consent or order.  FISH tests are used to detect bladder cancer.  Bostwick also allegedly offered various discounts and billing arrangements to treating physicians to induce them to refer business in violation of the Anti-Kickback Statute.  On Aug. 28, 2014, Bostwick Laboratories previously agreed to pay over $6.5 million to resolve the allegations in this lawsuit.  The allegations were originally raised in a whistleblower lawsuit brought by Michael Daugherty, who works in the industry, under the qui tam provisions of the False Claims Act.  Daugherty will receive a whistleblower award of over $2.5 million from the government’s settlements.  DOJ

January 8, 2016

Damian Mayol, the president of Miami-based transportation company Transportation Services Providers Inc., was convicted for his role in a health care fraud scheme involving three mental health centers based in Miami that resulted in the submission of approximately $70 million in false and fraudulent claims to Medicare.  According to evidence presented at trial, Mayol used his company to coordinate the payment of illegal health care kickbacks to recruiters, who in return referred patients to three now-defunct clinics in the Miami area:  R&S Community Mental Health Inc., St. Theresa Community Mental Health Center Inc. and New Day Community Mental Health Center LLC.  On behalf of the recruited beneficiaries, the centers billed Medicare for costly partial hospitalization program services that were not medically necessary or not provided to patients.  DOJ

January 8, 2016

Joseph Furando was sentenced to 20 years in prison and to pay more than $56 million in restitution for his role in a scheme to fraudulently sell biodiesel incentives.  Furando admitted he and his companies, New Jersey-based Caravan Trading Company and CIMA Green, supplied Indiana-based E‑biofuels with biodiesel that was actually made by other companies and had already been used to claim government tax credits.  Furando realized his profits through the prices he charged E‑biofuels.  Over the course of approximately two years, the defendants fraudulently sold more than 35 million gallons of fuel for a total cost of over $145.5 million.  The defendants realized more than $55 million in gross profits, at the expense of their customers and U.S. taxpayers.  DOJ

January 6, 2016

URS E & C Holdings Inc., a successor in interest to the global design and construction company Washington Group International Inc. (WGI), agreed to pay $9 million to settle allegations that WGI submitted false claims in connection with United States Agency for International Development (USAID) contracts.  Specifically, the settlement concerns USAID-funded contracts for the construction of water and wastewater infrastructure projects in Egypt in the 1990s.  The contracts were awarded to a joint venture partnership between WGI, Contrack International Inc. and Misr Sons Development S.A.E., an Egyptian company.  The government alleged the joint venture partners concealed from USAID that Contrack and Misr Sons were partners in the venture, thus preventing USAID from evaluating their qualifications and eligibility, which was a precondition to contract award.  The government previously settled with Contrack and is continuing to pursue its claims against Misr Sons.  DOJ

January 5, 2016

Wisconsin-based Novum Structures LLC agreed to enter a guilty plea and pay $3 million to resolve its criminal and civil liability arising from its improper use of foreign materials in federally funded construction projects which had “Buy America” requirements.  Novum specializes in the design and construction of glass space frames often used in roofs and atrium enclosures.  The allegations originated in a whistleblower lawsuit filed by Brenda King under the qui tam provisions of the False Claims Act.  She will receive a whistleblower award of approximately $400,000 from the government’s recovery.  DOJ

January 5, 2016

Nashville Pharmacy Services, LLC, and its majority owner Kevin Hartman, agreed to pay up to $7.8 million to settle charges they violated the False Claims Act by overbilling Medicare and TennCare for pharmacy services.  Specifically, the government claimed the Nashville-based pharmacy that specializes in dispensing HIV and AIDS-related medications automatically refilled medications without a request from the beneficiary or their physician; improperly waived TennCare and Medicare co-payments without an individualized assessment of ability to pay; improperly used pharmaceutical manufacturers’ co-payment cards to pay the co-payments of Medicare beneficiaries; billed for medications dispensed after the deaths of certain beneficiaries; and billed for medications that lacked a valid prescription.  The allegations originated in a whistleblower lawsuit filed by Marsha McCullough, a former Nashville Pharmacy order entry technician, under the qui tamprovisions of the False Claims Act.  She will receive a whistleblower award of 18 percent of the government’s recovery which could amount to $1.4 million.  Whistleblower Insider

January 4, 2016

Hovik Simitian, the former owner and operator of three medical clinics located in Los Angeles — Columbia Medical Group Inc., Life Care Medical Clinic and Safe Health Medical Clinic — was sentenced to 78 months in prison for his role in submitting more than $4.5 million in fraudulent claims to Medicare.  Simitian admitted paying illegal cash kickbacks to patient recruiters who brought Medicare beneficiaries to the clinics and for billing Medicare for lab tests and other services that were not medically necessary or actually provided, which he supported with false documentation.  DOJ

December 23, 2015

Memorial Health, Inc., Memorial Health University Medical Center, Inc., Provident Health Services, Inc., and MPPG, Inc. (d/b/a Memorial Health University Physicians) agreed to pay roughly $10 million to settle charges they violated the False Claims Act by submitting claims to the Government in violation of the Stark Law which prohibits hospitals from entering into improper financial relationships with referring physicians.  The settlement is the largest civil health care fraud recovery in the history of the United States Attorney’s Office for the Southern District of Georgia.  The allegations first arose in a whistleblower lawsuit filed by former Memorial Health CEO Phillip Schaengold under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-disclosed whistleblower reward from the proceeds of the government’s recovery. DOJ (SDGA)

December 23, 2015

Pennsylvania-based Genesis HealthCare LLC agreed to pay $600,000 to resolve charges it violated the False Claims Act in connection with its operation of a skilled nursing facility known as the Potomac Center.  Specifically, the government alleged that employees of Potomac/Genesis failed to provide patient care activities as recorded in the resident medical record of a patient and failed to provide certain care activities consistent with standing physician orders. DOJ (EDVA)

December 23, 2015

Aria Health Systems, Inc. agreed to pay more than $3 million to settle two False Claims Act matters which Aria self-disclosed.  Aria agreed to pay $564,700 to resolve claims that a cardiologist performed unnecessary invasive procedures at their Torresdale Campus between October 2012 and April 2013.  Aria also agreed to pay $2.5 million to resolve claims of compensation to physicians that were in excess of fair market value and in violation of the Stark Act. DOJ (EDPA)