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DOJ Enforcement Actions

The Department of Justice is the principal federal agency authorized to enforce the laws and defend the interests of the United States. As such, it oversees the enforcement of the False Claims Act, the foundation of the American whistleblower system, as well as numerous other laws.

The agency traces its origins to the Judiciary Act of 1789 which created the Office of the Attorney General, and the 1870 Act to Establish the Department of Justice, which established the agency as “an executive department of the government of the United States” with the Attorney General as its head.

The agency is comprised of numerous divisions with the Civil Division and in some instances, the Criminal Division, overseeing investigations and prosecutions under the False Claims Act. The U.S. Attorneys Office of the federal district where the False Claims Act case is filed also plays a key role in False Claims Act enforcement.

Below are summaries of recent DOJ settlements or successful resolutions under the False Claims Act as well as other successful prosecutions for fraud and misconduct. If you believe you have information about fraud which could give  rise to a claim for a whistleblower reward, please contact us to speak with one of our experienced whistleblower attorneys.

August 16, 2019

2d Chance PLLC, a Kentucky-based substance abuse center, will pay $200,494 to resolve allegations under the False Claims Act that it entered into an arrangement with Compliance Advantage, LLC, a toxicology lab, whereby 2d Chance referred patients to Compliance Advantage for complex drug testing, and Compliance Advantage provided a no-cost chemistry analyzer to 2d Chance, allowing 2d Chance to perform some urine testing at its site and bill Medicaid for those services.  The financial arrangement violated the Anti-Kickback Statute.  EDKY

August 16, 2019

Sunrise Systems of Brevard, Inc. will pay $500,000 to resolve charges that in a contract to perform demolition work for NASA, Sunrise claimed that it would partner with V&R Enterprises, making Sunrise eligible to receive Small Business Administration funding.  In fact, Sunrise performed nearly all of the work, violating SBA labor and work requirements.   USAO MD FL

August 16, 2019

Kentucky-based Ultimate Care Medical Services, LLC, doing business as Ultimate Treatment Center, and its principal, Dr. Rose O. Uradu, have agreed to pay $1.4 million to resolve allegations that they submitted false claims to Mediare and Kentucky's Medicaid program for services that were not provided.  Defendants billed for "evaluation & management" services when patients visited the clinic to receive methadone, visits which did not include a medical examination, which is required to bill for evaluation &  management.  In addition, defendants billed for complex urine drug testing when they lacked the equipment to perform such testing, and issued buprenorphine prescriptions at an rate greater than authorized.  USAO ED KY

August 15, 2019

ManTech Advanced Systems International, Inc., a subcontractor on a project with the Environmental Protection Agency, will pay $750,000 to resolve allegations that a project manager required to have top secret clearance had his clearance revoked during the term of the contract.  In addition, when the contract was extended, ManTech again represented that the project manager had top secret clearance.  Despite the revoked clearance, ManTech billed the EPA over $325,000 for the individual's services.  USAO ED VA.

August 15, 2019

Alabama-based Baldwin Bone & Joint, P.C. (BB&J) has settled a False Claims Act action for $1.2 million.  According to the whistleblower who initiated the action, former BB&J employee John Seddon, BB&J submitted claims to Medicare and TRICARE for physical therapy services performed by unauthorized providers, and compensated shareholder physicians based on the volume of physicians’ internal referrals.  As part of the settlement, Seddon will receive a $200,000 relator’s share.  USAO SDAL

August 15, 2019

North Carolina ambulance company Gate City Transportation has been ordered to pay $5.25 million in restitution for falsely billing the state's Medicaid program for convalescent ambulance services when, in fact, the company was providing only medical van service to ambulatory and wheelchair-bound patients.  During the investigation, agents confiscated more than $5 million in cash and property, which will be applied to the restitution.  USAO MD NC

August 13, 2019

Classic Site Solutions, Inc. (CSS), a Massachusetts-based construction management company, and owner Cheryl Sady, have agreed to pay $1.3 million to settle allegations that CSS’s conduct between 2009 and 2015 violated the False Claims Act.  In order to access government contracts set aside for companies located in Historically Underutilized Business Zones (HUBZones), CSS and Sady allegedly submitted false statements to the Small Business Administration (SBA) indicating their principal office was located in a HUBZone, which allowed them to fraudulently bid on and win contracts worth millions of dollars.  USAO CT

August 12, 2019

The CEO of a Colorado-based technology company has been sentenced to over 6 years in prison for defrauding the IRS, impeding the administration of tax laws, and stealing money from his employees’ healthcare and 401(K) plans.  As the head of Touchbase USA (TBUSA) and its successor company Touchbase Global Services, Inc. (TBGSI), Riordan Maynard allegedly stole over $50,000 from his employees’ healthcare plan and $68,000 from their 401(K) plans for use on company expenses.  He also caused TBUSA to be closed and TBGSI to be opened in order to avoid paying more than $2.5 million in unpaid payroll taxes.  After running up another $2.5 million in unpaid payroll taxes, Maynard also conspired to work around IRS levies sent to his customers.  USAO CO

August 8, 2019

Lee Elbaz was found guilty of orchestrating a scheme to defraud U.S. investors, wrongfully obtaining $145 million in investor funds.   Yukom Communications, Ltd., with Elbaz as the CEO, used the websites BinaryBook and BigOption to market "binary options" to investors.  Elbaz and Yukom falsely claimed to represent the interests of investors when, in fact, they profited when investors lost money, and made false statements about binary option suitability and expected returns, their identity and qualifications, and the ability of investors to withdraw funds.  Elbaz will be sentenced in December, 2019.  DOJ
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