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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.

				

			

			
						
					
			

	
		
		

			

				
				
September 15, 2017

				 Valentina Kovalienko, the owner of Brooklyn medical clinics Prime Care on the Bay LLC and Bensonhurst Mega Medical Care P.C. was sentenced to 84 months in prison and ordered to forfeit roughly $29 million for her role in a $55 million health care fraud scheme.  As part of her guilty plea, Kovalienko acknowledged that her co-conspirators paid cash kickbacks to patients to induce them to attend her two clinics.  She also admitted submitting false and fraudulent claims to Medicare and Medicaid for services that were induced by prohibited kickback payments to patients or that were unlawfully rendered by unlicensed staff. DOJ				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  Healthcare Fraud, 
													  Improper Medical Personnel, 
													  Provider Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 13, 2017

				 MediSys Health Network Inc., which owns and operates the two Queens hospitals Jamaica Hospital Medical Center and Flushing Hospital and Medical Center agreed to pay $4 million to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians.  These relationships took the form of compensation and office lease arrangements that did not comply with the requirements of the Stark Law, which restricts the financial relationships that hospitals may have with doctors who refer patients to them.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Dr. Satish Deshpande.  Dr. Deshpande will receive a whistleblower award of $600,000 from the proceeds of the government's recovery. DOJ				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  FCA Federal, 
													  Hospital Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 13, 2017

				 Virginia-based contractor Pacific Architects and Engineers, LLC agreed to pay $5 million to settle charges of violating the False Claims Act by failing to follow vetting requirements for personnel working in Afghanistan under a State Department contract for labor services.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former PAE manager Robert J. Palombo.  Mr. Palombo will receive a whistleblower award of $875,000 from the proceeds of the government's recovery. DOJ (DDC)				 					 

						
Tagged in:
													  Contract Non-Compliance, 
													  FCA Federal, 
													  Government Procurement Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 13, 2017

				 Virginia-based government contractor Calnet, Inc. and its CEO Kaleem Shah agreed to pay $300,000 to settle charges they violated the False Claims Act by submitting false information in Calnet’s bid proposal to the Federal Aviation Administration to win an FAA contract for IT help desk services.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The whistleblower will receive an award from the proceeds of the government's recovery. DOJ (EDVA)				 					 

						
Tagged in:
													  FCA Federal, 
													  Government Procurement Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 11, 2017

				 Family Medicine Centers of South Carolina LLC agreed to pay $1.56 million, and the company's principal owner and former CEO Dr. Stephen F. Serbin and its former Laboratory Director Victoria Serbin, agreed to pay $443,000 to settle charges they violated the False Claims Act and Stark Law.  Specifically, the government alleged FMC’s incentive compensation plan improperly paid FMC’s physicians a percentage of the value of laboratory and other diagnostic tests that they personally ordered through FMC.  Dr. Serbin allegedly initiated this program and reminded FMC’s physicians that they needed to order tests and other services through FMC in order to increase FMC’s profits and to ensure that their take-home pay remained in the upper level nationwide for family practice doctors.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former FMC physician Dr. Catherine A. Schaefer.  She will receive a whistleblower award of $340,510 from the proceeds of the government's recovery. DOJ				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  FCA Federal, 
													  Laboratory and IDTF, 
													  Provider Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 8, 2017

				 Galena Biopharma Inc. agreed to pay more than $7.55 million to resolve allegations it violated the False Claims Act by paying kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral.  These included providing more than 85 free meals to doctors and staff from a single, high-prescribing practice; paying doctors thousands of dollars to attend an “advisory board,” and paying roughly $92,000 to a physician-owned pharmacy under a performance-based rebate agreement.  Two of the doctors who received remuneration from Galena were convicted and later sentenced to prison.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Lynne Dougherty.  She will receive a whistleblower award of more than $1.2 million from the proceeds of the government's recovery. DOJ				 					 

						
Tagged in:
													  FCA Federal, 
													  Lack of Medical Necessity, 
													  Pharma Fraud, 
													  Provider Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 7, 2017

				 Connecticut substance abuse treatment provider the Hartford Dispensary and the Hartford Dispensary Endowment Corporation and its former CEO Paul McLaughlin agreed to pay $627,000 to resolve allegations they violated the False Claims Acts by falsely representing and certifying to federal and state authorities that Hartford Dispensary had a medical director, as defined by relevant regulations, who was performing the duties and responsibilities required by federal and state law.  The allegations originated in a whistleblower lawsuit filed by former Hartford Dispensary employees Russell Buchner and Charles Hatheway under the qui tam provisions of the False Claims Act.  They will receive a whistleblower award of roughly $113,000 from the proceeds of the government's recovery.  DOJ (DCT)				 					 

						
Tagged in:
													  FCA Federal, 
													  Improper Medical Personnel, 
													  Medical Billing Fraud, 
													  Provider Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 7, 2017

				 CEO of New York-based Global Metallurgy, LLC Erdal Kuyumcu was sentenced to 57 months in prison following his guilty plea to conspiracy to violate the International Emergency Economic Powers Act by exporting specialty metals from the U.S. to Iran. DOJ				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 5, 2017

				 Novo Nordisk Inc. agreed to pay $58.65 million to settle charges it violated the False Claims Act and Food, Drug, and Cosmetic Act by failing to comply with the FDA-mandated Risk Evaluation and Mitigation Strategy (REMS) for its Type II diabetes medication Victoza.  The New Jersey based pharmaceutical manufacturer is a subsidiary of Denmark’s Novo Nordisk A/S.  At the time of Victoza’s FDA approval in 2010, the FDA required a REMS to mitigate the potential risk in humans of a rare form of cancer called Medullary Thyroid Carcinoma (MTC) associated with the drug. Under the REMS, Novo Nordisk was required to disclose to physicians the potential risk. If it failed to comply with these disclosure requirements, including requirements to communicate accurate risk information, the drug would be considered misbranded under the law.  According to the government, Novo Nordisk failed to comply with the REMS requirements, providing information to physicians that created the false or misleading impression that the Victoza REMS-required message was erroneous, irrelevant, or unimportant.  The allegations originated in several whistleblower lawsuits filed under the qui tam provisions of the False Claims Act. The whistleblowers who brought these actions will receive a yet-to-be-determined whistleblower award from the proceeds of the government’s recovery. Whistleblower Insider				 					 

						
Tagged in:
													  FCA Federal, 
													  FDA Fraud, 
													  Off-Label and Unapproved Use, 
													  Pharma Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 5, 2017

				 Tennessee-based affiliated home health entities Home Health Care of East Tennessee, Inc.; Home Health Care of West Tennessee, Inc.; Home Health Care Services, Inc.; Home Health Care Services II, Inc.; Health Care Staffing of Tennessee, Inc.; and Home Health Care Support Services, Inc. agreed to pay $1.8 million to settle charges of violating the False Claims Act and Stark Law for billing Medicare for home health and hospice services not properly payable due to compensation or other financial arrangements with certain referring physicians. DOJ (EDTN)				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  FCA Federal, 
													  Home Health and Hospice, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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