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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 8, 2016

Houston-based Goodman Company L.P. agreed to pay a $5.55 million civil penalty to settle allegations that it violated the Consumer Product Safety Act by failing to timely inform the Consumer Product Safety Commission of a fire risk posed by certain air conditioning and heating units, many of which were installed in hotels, schools and hospitals.  The settlement also resolves allegations that when Goodman ultimately reported the fire risk, it misrepresented the number of fires that had occurred.  DOJ

September 7, 2016

Medical equipment supply companies U.S. Healthcare Supply LLC and Oxford Diabetic Supply Inc., along with their owners and presidents, agreed to pay more than $12.2 million to resolve allegations that they violated the False Claims Act by making unsolicited calls to Medicare beneficiaries to sell them durable medical equipment.  According to the government, the two companies created a fictitious company called Diabetic Experts Inc., which they used to make the unsolicited calls, and then submitted claims to Medicare for the equipment they sold in violation of the Medicare Anti-Solicitation Statute.  Whistleblower Insider

September 7, 2016

Clinical psychologists Beverly Stubblefield and John Teal pleaded guilty for their involvement in a fraudulent psychological testing scheme that preyed upon Medicare recipients living in nursing homes throughout the Southeastern United States.  Stubblefield and Teal practiced as clinical psychologists at Nursing Home Psychological Services, Inc. and Psychological Care Services, Inc. and they admitted their companies billed Medicare for psychological tests to nursing home residents throughout Mississippi, Louisiana, Florida and Alabama which were not medically necessary or not provided at all.  They further admitted they repeatedly tested the same nursing home residents even though some were incapacitated and could not meaningfully participate in testing.  DOJ

August 31, 2016

Clear Vue Eye Center and its owner, Dr. Monique Barbour, agreed to pay $1 million to resolve allegations that they violated the False Claims Act by overbilling Medicare for patient visits at nursing homes and assisted living facilities, and for billing for procedures purportedly performed while Dr. Barbour was out of the country.  According to the government, Dr. Barbour billed excessively for patient visits, billing for more than 12 hours a day and often for more than 20 hours in a 24-hour period.  Records reviews show that many of the procedures billed were medically unnecessary with little patient benefit and that Dr. Barbour billed procedures at the most profitable rates regardless of the procedure’s proper billing code.  The allegations originated in a whistleblower lawsuit brought by former Clear Vue employee Lori Moore under the qui tam provisions of the False Claims Act.  She will receive a whistleblower award of $200,000 from the proceeds of the government's recovery.  DOJ (SDFL)

August 25, 2016

Fairbanks Morse Engine agreed to pay $142,500 to settle charges it violated the False Claims Act by overcharging the Navy on a subcontract for engine repairs on the USS Ashland.  DOJ (EDVA)

August 24, 2016

New York hospitals Beth Israel Medical Center (d/b/a Mount Sinai Beth Israel), St. Luke’s-Roosevelt Hospital Center (d/b/a Mount Sinai St. Luke’s) and Mount Sinai Roosevelt, and Continuum Health Partners, agreed to pay $2,950,000 to settle charges that they violated the federal and New York False Claims Act by willfully delaying repayment of over $800,000 in Medicaid overpayments that resulted from improper claims submitted because of a software error.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-determined award from the proceeds of the government's recovery.  DOJ (SDNY)

August 24, 2016

The insurance carrier for defunct, for-profit cosmetology school B&H Education, Inc., which operated the Marinello Schools of Beauty in locations across Southern California, agreed to pay $8,631,000 to resolve allegations the school violated the False Claims Act by obtaining federal student loan funds for ineligible students who received bogus high school diplomas.  The allegations originated in a whistleblower lawsuit filed by six former B&H employees under the qui tam provisions of the False Claims Act.  The whistleblowers will collectively receive a whistleblower award of $2.5 million from the proceeds of the government's recovery.  In addition to the $8.6 million payment, the insurer will also pay $2,369,000 to the six whistleblowers’ attorneys.  DOJ (CDCA)

August 23, 2016

Walter Crummy, a former officer and owner of MCC Construction Company, pleaded guilty to conspiring to commit wire fraud and agreed to pay forfeiture of $105,618.  According to court documents, MCC and others conspired with two companies that were eligible to receive federal government contracts set asides for small, disadvantaged businesses with the understanding that MCC would illegally perform all of the work.  In so doing, MCC was able to win 27 government contracts worth over $70 million from 2008 to 2011.  MCC previously pleaded guilty to conspiring to commit fraud by illegally obtaining government contracts that were intended for small, disadvantaged businesses and agreed to pay roughly $1.8 million in criminal penalties and forfeiture.  DOJ

August 22, 2016

Rubycon Corporation, Elna Co., Ltd. and Holy Stone Holdings Co., Ltd. pleaded guilty for their roles in a conspiracy to fix prices for electrolytic capacitors which store and regulate electrical current in a variety of electronic products, including computers, televisions, car engine and airbag systems, home appliances and office equipment. Previously, NEC TOKIN Corp. and Hitachi Chemical Co. Ltd. pleaded guilty to participating in the same worldwide conspiracy.  The charges are all part of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the capacitor industry.  DOJ

August 18, 2016

Harley-Davidson agreed to pay a $12 million civil penalty and to stop selling and to buy back and destroy illegal devices that increase air pollution from their motorcycles and to sell only models of these devices that are certified to meet Clean Air Act emissions standards.  The company also agreed to spend $3 million to mitigate air pollution through a project to replace conventional woodstoves with cleaner-burning stoves in local communities.  According to the government, Harley-Davidson manufactured and sold approximately 340,000 illegal devices, known as “super tuners,” that caused motorcycles to emit higher amounts of certain air pollutants than what the company certified to EPA.  DOJ
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