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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.

July 1, 2020

Novartis Pharmaceuticals Corporation will pay a total of $678 million to resolve a case brought by a whistleblower, Oswald Bilotta, alleging that between 2002 and 2011 the pharmaceutical company violated the Anti-Kickback Statute and False Claims Act by providing doctors with cash payments and luxury travel and meals to induce them to prescribe Novartis cardiovascular and diabetes drugs reimbursed by federal healthcare programs.  The total settlement consists of $591.4 million as federal FCA damages, $48.2 million as state FCA damages for Medicaid false claims, and $38.4 million as forfeiture under the Anti-Kickback Statute.  The whistleblower award has not yet been determined.  In addition to the monetary settlement, Novartis entered into a Corporate Integrity Agreement obligating the company to, among other things, significantly reduce its volume and spending on paid speaker programs.  DOJ; USAO SDNY

July 1, 2020

Novartis Pharmaceuticals Corporation will pay $51.25 million to resolve claims that it unlawfully funneled money to three different foundations – The Assistance Fund, the National Organization for Rare Disorders, and the Chronic Disease Fund – so that those organizations could fund co-payments owed by Medicare beneficiary patients prescribed the Novartis drugs Gilenya (for multiple sclerosis) and Afinitor (for renal cell carcinoma and certain pancreatic cancers).  The payments were alleged to be in violation of the Anti-Kickback Statute and False Claims Act.  USAO Mass; DOJ

June 25, 2020

Novartis AG, a Switzerland-based pharmaceutical company, along with its Greek subsidiary, Novartis Hellas S.A.C.I. (Novartis Greece), have agreed to pay $233 million to the DOJ and $112 to the SEC, for a combined penalty of $345 million, in order to resolve charges of violating the Foreign Corrupt Practices Act.  A former subsidiary, Alcon Pte Ltd—now a subsidiary of multinational eyecare company, Alcon Ltd—has agreed to pay $8.9 million to resolve similar charges.  Between 2012 and 2016, the subsidiaries allegedly bribed employees of state-owned hospitals and clinics in Greece and Vietnam to use Novartis or Alcon-branded products while falsely recording the improper payments.  As part of the settlement, both Novartis Greece and Alcon Pte Ltd will also enter into deferred prosecution agreements with DOJ.  DOJ; USAO NJ; SEC

June 25, 2020

Georgia-based Piedmont Healthcare, Inc. has agreed to pay $16 million to resolve whistleblower-brought allegations that it violated the Anti-Kickback Statute and False Claims Act.  The relator in this case, a former Piedmont physician, alleged that between 2009 and 2013, Piedmont’s case managers overturned physician recommendations for outpatient care by submitting claims for more expensive inpatient care to Medicare and Medicaid.  Furthermore, when the healthcare system acquired the Atlanta Cardiology Group in 2007, it allegedly paid far above fair market value for a catherization lab that was partly owned by the practice group.  For bringing a successful enforcement action, the unnamed relator will receive a share of nearly $3 million of the settlement proceeds. USAO SDGA

June 24, 2020

Augusta University Medical Center (AUMC) has agreed to pay $2.6 million to resolve fraud allegations by the United States, State of Georgia, and State of South Carolina under state and federal False Claims Acts.  According to the government, AUMC knowingly submitted claims to Medicare and Medicaid for a medically unnecessary procedure that was billed as a covered procedure.  USAO SDGA

June 22, 2020

A former employee of Schneider Electric Buildings America, Bhaskar Patel, has been sentenced to three years of probation and ordered to forfeit over $2.5 million in connection with a five-year bribery scheme involving several federal energy savings performance contracts.  Patel had pleaded guilty to soliciting and receiving over $2.5 million in bribes from eight Schneider subcontractors on the contracts, which included a $24.7 million project for the USDA in California, two projects amounting to $34.4 million for the GSA in Puerto Rico and the Virgin Islands, a $42.4 million project for the VA in the Northeast, a $70 million project for the Coast Guard in Puerto Rico, and a $114.3 million project for the Navy in California.  USAO VT

June 16, 2020

A doctor in Mississippi has been sentenced to four years in prison and ordered to pay nearly $5 million in restitution and judgment for committing healthcare fraud against multiple insurers, including TRICARE.  In exchange for a 35% cut of reimbursements, Dr. Shahjahan Sultan had agreed to enter into a contract with a local pharmacy to prescribe expensive compound medications to insured patients, which he did without regard to medical necessity, and which resulted in over $8 million in losses to insurers.  USAO SDMS

June 16, 2020

The U.S. Navy’s leading supplier of high-yield steel for submarines, Bradken Inc., has agreed to pay $10.8 million and comply with a three-year deferred prosecution agreement in order to settle allegations it violated the False Claims Act through its Tacoma foundry producing and selling steel that failed to meet certain strength standards required by the Navy.  In 2017, the defense contractor discovered and self-disclosed that test results for a substantial portion of its steel productions, spanning thirty years, had been improperly altered by then director of metallurgy, Elaine Thomas, causing shipbuilders to submit false claims to the Navy.  DOJ; USAO WDWA

June 12, 2020

A major Virginia-based defense contractor, Science Applications International Corporation (SAIC), has paid $5.98 million to settle claims arising from a self-disclosure that it violated the False Claims Act on a contract to provide IT support to the U.S. Army.  According to SAIC, employees working on newer projects that were not yet funded had billed their time to older projects that were funded.  When funding became available on the newer projects, employees working on the older projects then billed their time to the newer project.  USAO SDCA

June 10, 2020

Alutiiq International Solutions LLC (AIS), an Alaskan Native Corporation and government contractor, has agreed to pay $1.25 million and enter into a non-prosecution agreement to settle allegations of violating the Anti-Kickback Act in connection with a multi-million dollar General Services Administration (GSA) contract to modernize the Harry S. Truman Federal Building in Washington, D.C.  Beginning in 2010, a project manager formerly employed by AIS allegedly accepted kickbacks from a subcontractor in exchange for steering more work to the subcontractor, while also fraudulently billing GSA for a non-existent on-site supervisor and overinflating costs from its subcontractor.  AIS and its parent company, Afognak Native Corporation, cooperated fully with the investigation and have since engaged in extensive remedial actions.  DOJ
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