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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.

				

			

			
						
					
			

	
		
		

			

				
				
August 17, 2016

				 Louis Yeung, the former vice president of California wholesale tool company Eastern Tools & Equipment was sentenced to 63 months in prison and ordered to pay roughly $9.6 million in restitution for his role in a scheme to defraud East West Bank that resulted in losses of over $9 million.  Yeung admitted that he and his co-conspirators defrauded East West Bank by making material misrepresentations about Eastern Tools’ accounts receivable and its financial statements to obtain and maintain a loan with the bank.  DOJ				 					 

						
Tagged in:
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 17, 2016

				 Dr. Yasin Khan, Dr. Elizabeth Khan, Dr. Dong Ko, Westfield Hospital and affiliated entities including a related pain clinic, Lehigh Valley Pain Management, agreed to pay $690,441 to resolve allegations they violated the False Claims Act by submitting false health care billings for services performed by non-physicians as “incident to” the services of supervising physicians when, in fact, supervising physicians were away from the office or otherwise incapable of supervising.  The allegations originated in whistleblower lawsuit filed Margaret Reynard under the qui tam provisions of the False Claims Act.  Ms. Reynard will receive a whistleblower award of roughly $124,000 from the proceeds of the government's recovery.  DOJ (EDPA)				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 17, 2016

				 Florida urologist Robert A. Scappa agreed to pay $250,000 to resolve allegations that he violated the False Claims Act by causing claims to be submitted to federal health care programs for laboratory tests that were not medically necessary.  During the relevant time period, Scappa was a urologist practicing as part of Scappa Urology, which was a division of 21st Century Oncology, LLC., a nationwide provider of integrated cancer care services.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by a former medical assistant who worked for Dr. David Spellberg of Naples Urology Associates, which was also a division of 21st Century Oncology.  The whistleblower will receive an award of $37,500 from the government's recovery.  This amount is in addition to a $3.2 million share she will receive as the result of the $19.75 million settlement previously reached with 21st Century Oncology.  DOJ (MDFL)				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 16, 2016

				 Pittsburgh-based national banking association PNC Bank N.A. agreed to pay $9.5 million to resolve allegations it violated the False Claims Act in connection with the issuance of loans guaranteed by the Small Business Administration (SBA).  According to the government, for numerous loans brokered by Jade Capital & Investments LLC., PNC failed to adhere to the requirements of the SBA program including demanding adequate bank and IRS tax records from the borrowers, ensuring that the borrowers had the ability to repay the loans, and failing to apply prudent lending standards.  Whistleblower Insider				 					 

						
Tagged in:
													  FCA Federal, 
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 15, 2016

				 Miami resident Ramon Collado Gonzalez pleaded guilty to participating in a $4.2 million home health care fraud scheme.  As part of his guilty plea, Gonzalez admitted being recruited by Mildrey Gonzalez and Milka Alfaro, the owners of Miami health care agency Golden Home Health Care Inc., to falsely represent himself to be Golden’s owner so they could improperly obtain funds from Medicare.  DOJ				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  Home Health and Hospice, 
													  Medicare, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 24, 2016

				 Six former employees of defunct for-profit cosmetology school B&H Education, Inc., which operated the Marinello Schools of Beauty in locations across Southern California, will receive a whistleblower award of $2.5 million from the $8.6 million B&H's insurance carrier agreed to pay to resolve allegations that B&H violated the False Claims Act by obtaining federal student loan funds for ineligible students who received bogus high school diplomas.  DOJ (CDCA)				 					 

						
Tagged in:
													  Education Fraud, 
													  FCA Federal, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 12, 2016

				 Massachusetts-based research and development company Agiltron, Inc. and its president, Jing Zhao, agreed to pay $2.25 million to resolve allegations that they violated the False Claims Act by seeking disbursements from federal agencies for falsified labor costs in order to maximize charges to grants and contracts awarded by federal agencies.  Agiltron received funds under 15 grants and contracts awarded through the federal Small Business Innovation and Small Business Technology Transfer programs.  According to the government, Agiltron and Zhao engaged in a scheme in which they directed employees to charge labor hours to the awards that did not correspond with their actual time and effort, to alter their completed timesheets, and to discard or destroy documents.  DOJ (DMA)				 					 

						
Tagged in:
													  Falsifying Invoices, 
													  FCA Federal, 
													  Government Procurement Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 11, 2016

				 UK-based e-commerce retailer Trod Ltd. (doing business as Buy 4 Less) pleaded guilty to fixing the prices of certain posters sold online through Amazon Marketplace.  Specifically, the company admitted to agreeing with competitors to adopt pricing algorithms for the sale of certain posters sold on Amazon with the goal of offering online shoppers the same price for the same product and coordinating changes to their respective prices.  The prosecution is part of the government's ongoing antitrust investigation into price fixing in the online wall décor industry.  DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
August 11, 2016

				 Tracy Richardson Brown, the owner of New Orleans-based medical equipment supply company, Psalms 23 DME LLC was sentenced to 80 months in prison and to pay roughly $2 million in restitution for directing a scheme to defraud Medicare out of more than $3.3 million.  According to the evidence introduced at trial, Brown paid patient recruiters for the names and billing information of Medicare beneficiaries and used it to bill Medicare for power wheelchairs and various knee, elbow and back braces.  However, the vast majority of these patients did not need, and often did not receive or even want, this equipment.  DOJ				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  Medical Devices and DME, 
													  Medicare, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 10, 2016

				 Lincoln Military Housing, which owns and operates dozens of on-base and off-base military housing communities throughout Southern California, agreed to pay $200,000 to resolve allegations that it unlawfully evicted active-duty servicemembers and their families by obtaining default judgments against them in violation of the Servicemembers Civil Relief Act (SCRA).  According to the government, Lincoln Military requested default judgments against servicemembers without filing the affidavits required by the SCRA to alert the court of the tenants’ military status.  This put servicemembers at risk of being evicted without having an opportunity to participate in the case and without having an attorney assigned to represent them.  DOJ				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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