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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.

October 22, 2014

Tayyab Aziz, founder of three Detroit-area home health agencies Prestige Home Health Services Inc., Royal Home Health Care Inc., and Platinum Home Health Services Inc. pleaded guilty for his role in a $22M home health care fraud scheme. Specifically, Aziz admitted he and his co-conspirators submitted fraudulent claims to Medicare for services that were medically unnecessary or never performed. They also submitted claims for services purportedly provided to Medicare beneficiaries who were recruited through illegal kickbacks paid to the patients and recruiters. DOJ

October 21, 2014

Kentucky-based cardiologists Satyabrata Chatterjee and Ashwini Anand, who jointly owned cardiologist physician group Cumberland Clinic, agreed to pay $380,000 to resolve allegations they violated the False Claims Act by entering into sham management agreements with Saint Joseph Hospital in exchange for the referral of cardiology procedures and other healthcare services to Saint Joseph. The government alleged that St. Joseph Hospital entered into sham agreements with Chatterjee and Anand, under which the physicians were paid to provide management services but did not in fact do so and that in exchange Chatterjee and Anand agreed to enter into an exclusive agreement with Saint Joseph to refer Cumberland Clinic patients to the hospital for cardiology and other services in violation of the Stark Law and the Anti-Kickback Statute. The government previously entered into a $16.5M settlement with Saint Joseph for the allegedly sham management contracts for unnecessary and excessive cardiology procedures. The allegations originated from a whistleblower lawsuit filed by three Lexington, Kentucky cardiologists under the qui tam provisions of the False Claims Act. The three whistleblowers, Drs. Michael Jones, Paula Hollingsworth and Michael Rukavina, will collectively receive a whistleblower award of $68,400. DOJ

October 21, 2014

Science Applications International Corporation(SAIC), now known as Leidos Holdings Inc., agreed to pay $1.5M to resolve False Claims Act allegations that it knowingly engaged in prohibited conflicts of interest as a contractor for the U.S. Nuclear Regulatory Commission (NRC) between 1992 and 2000. SAIC provides scientific, engineering and other technical services for government and commercial customers. Between 1992 and 2000, SAIC held two contracts with the NRC to provide scientific and technical services, including assisting the NRC in its consideration of a rule that could have permitted the release or recycling of certain types and quantities of material with very low levels of radioactivity below regulatory safety limits. According to the government, SAIC repeatedly and falsely certified it had no conflicting business relationships when in fact it actually engaged in multiple business relationships with entities that had a financial interest in the outcome of the NRC’s rulemaking effort. DOJ

October 20, 2014

A federal jury in Houston convicted Earnest Gibson III, the president of Riverside General Hospital, his son, and two others for their participation in a $158M Medicare fraud scheme involving false claims for mental health treatment. Ten defendants have now been convicted in connection with the Riverside fraud scheme. DOJ

October 17, 2014

Two groups of Houston-based diagnostic centers agreed to pay more than $2.6M to settle allegations they violated the False Claims Act by engaging in improper financial relationships with referring physicians in violation of the Stark Statute. One group of centers, which operates under the name One Step Diagnostic, agreed to pay $1.2M. The other group of centers, consisting of Complete Imaging Solutions LLC doing business asHouston Diagnostics, Deerbrook Diagnostics & Imaging Center LLC,Elite Diagnostic Inc., Galleria MRI & Diagnostic LLC, Spring Imaging Center Inc. and West Houston MRI & Diagnostics LLC agreed to pay about $1.5M. The allegations originated from a whistleblower lawsuit filed by three whistleblowers under the qui tam provisions of the False Claims Act, who will receive an undisclosed award. DOJ

October 14, 2014

Gregory J. Sylvestri, a managing member of the shell company BONB LLC, aka BioScan, pleaded guilty to two charges related to money laundering of health care fraud proceeds. According to his plea agreement, from June 2010 through April 2014, Sylvestri’s co-conspirators submitted over $12M in fraudulent claims to Medicare through three purported Florida health clinics, Cornerstone Health Specialists, Summit Health Specialists P.L. and Coastal Health Specialists LLC. These fraudulent claims included claims resulting from illegal kickback arrangements and claims for radiology, audiology, neurology and cardiology services that were never rendered. DOJ

October 10, 2014

Extendicare Health Services Inc., an operator of a chain of skilled nursing facilities, and its subsidiary Progressive Step Corporation (ProStep), agreed to pay $38 million that Extendicare billed Medicare and Medicaid for materially substandard nursing services that were so deficient they were effectively worthless and billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services. It is the largest failure of care settlement with a chain-wide skilled nursing facility in the Justice Department’s history. The government’s charges originated from two whistleblower lawsuits filed by Tracy Lovvron and Donald Gallick under the qui tam provisions of the False Claim Act. They will receive whistleblower awards of more than $1.8 million and $250,000, respectively. DOJ

October 8, 2014

Usman Butt, a former owner and manager of two Detroit-area home health care agencies, Home Health Services Inc. and Royal Home Health Care Inc., pleaded guilty for his role in a $22 million Medicare fraud conspiracy. Specifically, Butt admitted that beginning in 2008 and continuing through January 2013, he conspired with others to bill Medicare for home health care services that were not actually rendered, not medically necessary, and procured through paying illegal kickbacks. He also admitted that he fabricated patient files to give the false appearance that the services were medically necessary and actually provided. DOJ

October 7, 2014

Virginia based telecommunications services provider DRS Technical Services Inc. agreed to pay $13.7 million to settle charges it violated the False Claims Act by overbilling the government for work performed by DRS personnel who lacked the job qualifications required by the company’s government contract. The charges related to services and supplies DRS provided to the US Army’s Communication and Electronics Command (CECOM) in Iraq and Afghanistan, and to the US Coast Guard for aircraft maintenance. Whistleblower Insider

October 2, 2014

Steven B. Jones, former deputy director of the Arkansas Department of Human Services pleaded guilty for providing official assistance in exchange for bribes from the owner of two mental health companies. DOJ
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