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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.

				

			

			
						
					
			

	
		
		

			

				
				
January 17, 2017

				 McKesson Corporation, one of the country’s largest distributors of pharmaceutical drugs, agreed to pay a record $150 million civil penalty for alleged violations of the Controlled Substances Act. The settlement requires McKesson to suspend sales of controlled substances from distribution centers in Colorado, Ohio, Michigan and Florida for several years and according to the government is among the most severe sanctions ever agreed to by a Drug Enforcement Administration registered distributor. According to the government, McKesson failed to design and implement an effective system to detect and report “suspicious orders” for controlled substances distributed to its independent and small chain pharmacy customers and supplied various U.S. pharmacies an increasing amount of oxycodone and hydrocodone pills, frequently misused products that are part of the current opioid epidemic. DOJ				 					 

						
Tagged in:
													  Pharma Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 17, 2017

				 United Kingdom-based manufacturer and distributor of power systems for the aerospace, defense, marine and energy sectors Rolls-Royce plc agreed to pay nearly $170 million as part of an $800 million global resolution to investigations by DOJ and U.K. and Brazilian authorities into a long-running scheme to bribe government officials in exchange for government contracts in violation of the Foreign Corrupt Practices Act. According to company admissions, Rolls-Royce paid more than $35 million in bribes through third parties to foreign officials in various countries including Thailand, Brazil, Kazakhstan, Azerbaijan, Angola and Iraq in exchange for those officials’ assistance in providing confidential information and awarding contracts to Rolls-Royce and affiliated entities. DOJ				 					 

						
Tagged in:
													  Defense Contract Fraud, 
													  FCPA, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 17, 2017

				 Freeport-McMoRan, Inc. subsidiaries Cyprus Amax Minerals Company and Western Nuclear, Inc. agreed to the cleanup of 94 abandoned uranium mines on the Navajo Nation in a settlement valued at over $600 million. DOJ				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 17, 2017

				 NCR Corporation agreed to complete one of the nation’s largest Superfund cleanup projects at Wisconsin’s Lower Fox River and Green Bay Site. An enormous amount of cleanup and natural resource restoration work has already been done in the area under a set of partial settlements, an EPA administrative cleanup order, and court orders in a federal lawsuit brought by the United States and the State of Wisconsin. The final phase of cleanup taken on by NCR will cost up to $200 million or more over the next few years. The total cleanup costs for the Fox River Site will exceed $1 billion. DOJ				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 13, 2017

				 The Department of Justice, 21 states, and the District of Columbia reached a nearly $864 million settlement agreement with Moody’s Investors Service Inc., Moody’s Analytics Inc., and their parent, Moody’s Corporation to resolve allegations arising from Moody’s role in providing credit ratings for Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDO), contributing to the worst financial crisis since the Great Depression. According to the government, "Moody’s failed to adhere to its own credit rating standards and fell short on its pledge of transparency in the run-up to the Great Recession [and] . . . used a more lenient standard than it had itself published." The settlement includes a $437.5 million federal civil penalty, which is the second largest payment of this type ever made to the federal government by a ratings agency. DOJ				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Financial Institution Fraud, 
													  Housing and Mortgage Fraud, 
													  Misrepresentations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 13, 2017

				 Massachusetts-based ambulance company Medstar Ambulance Inc., including four subsidiary companies and its two owners, Nicholas and Gregory Melehov, agreed to pay $12.7 million to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for ambulance transport services. According to the government, Medstar routinely billed for services that did not qualify for reimbursement because the transports were not medically reasonable and necessary, billed for higher levels of services than were required by patients’ conditions, and billed for higher levels of services than were actually provided. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Dale Meehan, a former employee in Medstar’s billing office. Mr. Meehan will receive a whistleblower award of roughly $3.5 million. DOJ				 					 

						
Tagged in:
													  FCA Federal, 
													  Lack of Medical Necessity, 
													  Medical Billing Fraud, 
													  Medicare, 
													  Upcoding, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 13, 2017

				 Chilean chemicals and mining company Sociedad Química y Minera de Chile (SQM) agreed to pay a criminal penalty of more than $15 million in connection with payments to politically-connected individuals in Chile in violation of the Foreign Corrupt Practices Act. According to the government, SQM made donations to dozens of foundations controlled by or closely tied to Chilean politicians with influence over the government’s mining plans in Chile, a key segment of SQM’s business. SQM also admitted to falsifying its books and records to conceal payments to vendors associated with politicians, logging them as consulting and professional services SQM never received. In total, SQM admitted having paid nearly $15 million between 2008 and 2015 to vendors despite having no evidence any goods or services were actually received. SQM also agreed to pay $15 million to settle related charges with the Securities and Exchange Commission, for a total payment of $30 million. DOJ				 					 

						
Tagged in:
													  FCPA, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 13, 2017

				 Potomac Electric Power Company (Pepco) agreed to pay a civil penalty of $1.6 million for alleged violations of Pepco’s Clean Water Act permit at its service center located in Anacostia. It also agreed to implement a number of measures to reduce metals in stormwater entering into its drainage system and will install an in-pipe treatment system to further treat the stormwater, which discharges into the Anacostia River. DOJ				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 12, 2017

				 Baxter International Inc. subsidiary Baxter Healthcare Corporation agreed to pay roughly $18 million to settle charges of violating the False Claims Act arising from the company's failure to follow current Good Manufacturing Practices when manufacturing sterile drug products in North Carolina. Baxter admitted that it distributed products in interstate commerce that were adulterated in violation of the Federal Food, Drug, and Cosmetic Act FDCA. It will pay a total of $16 million in monetary penalties and forfeiture. It will also pay roughly $2 million to resolve allegations it violated the False Claims Act by submitting false claims to the Department of Veterans Affairs based upon Baxter’s failure to follow cGMPs. The allegations originated in a whistleblower lawsuit under the qui tam provisions of the False Claims Act by Baxter employee Christopher Wall. He will receive a whistleblower award of roughly $432,000 from the proceeds of the government's False Claims Act recovery. DOJ				 					 

						
Tagged in:
													  CGMP Violation, 
													  FCA Federal, 
													  Pharma Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 12, 2017

				 Idia Oriakhi, the administrator of five Houston-area home health agencies, pleaded guilty to conspiring to defraud the State of Texas’ Medicaid-funded Home and Community-Based Service and the Primary Home Care Programs of more than $7.8 million. Oriakhi’s parents owned and operated Aabraham Blessings, LLC; Baptist Home Care Providers, Inc.; Community Wide Home Health, Inc.; Four Seasons Home Healthcare, Inc. and Kis Med Concepts, Inc. and admitted that she, her father Godwin Oriakhi and others obtained patients for her family’s home health agencies by paying illegal kickback payments to patient recruiters and physicians for referring and certifying Medicaid patients for services not medically necessary and often not provided. DOJ				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  Healthcare Fraud, 
													  Lack of Medical Necessity, 
													  Medicaid, 
													  Medical Billing Fraud, 
													  Medicare, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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