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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.

				

			

			
						
					
			

	
		
		

			

				
				
February 22, 2016

				 Government contractor Paige Industrial Services, Inc. agreed to pay between $450,000 and $675,000 to resolve allegations it violated the False Claims Act by submitting claims falsely certifying it had complied with the Davis-Bacon Act, which requires the payment of certain prevailing wages and fringe benefits to employees working under a government contract.  The work involved construction and maintenance services at the National Institute of Health campus in Bethesda, Maryland.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The unidentified whistleblower will receive a yet-to-be-determine whistleblower award from the proceeds of the government's recovery.  In a related parallel criminal proceeding, Luis Alonso Valle, owner of the Paige subcontractor construction company Valle Services, LLC., pleaded guilty to an illegal pattern and practice of hiring unauthorized aliens.  DOJ(MD)				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 19, 2016

				 Ohio resident Paul Toth was sentenced to 108 months in prison and to pay $307,702 in restitution and to forfeit the same amount for his role in laundering money for a Costa Rica-based “sweepstakes fraud” scheme.  The evidence at trial showed that telemarketers in Costa Rica, who were Roth's co-conspirators, posed as federal agents and deceived the victims into believing they had won a large monetary prize in a sweepstakes contest and falsely told them in order to receive the “prize,” they had to wire thousands of dollars to Costa Rica for a “refundable insurance fee.”  DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
February 19, 2016

				 Adventist Health System Sunbelt Healthcare Corporation agreed to pay $2.09 million to resolve allegations that patients were administered portions of single-dose vials of chemotherapy drugs that were left over from administrations to prior patients.  The settlement also resolves allegations that some platinum based drugs were administered inappropriately and that certain infusion services were upcoded.  The allegations originated in a whistleblower lawsuit filed by former Adventist employee Heather Huddleston under the qui tam provisions of the False Claims Act.  She will receive a whistleblower award of $376,452 from the proceeds of the government's recovery.  DOJ (MDFL)				 					 

						
Tagged in:
													  Dosage Fraud, 
													  Drug Switching, 
													  Healthcare Fraud, 
													  Medical Billing Fraud, 
													  Medicare, 
													  Pharma Fraud, 
													  Provider Fraud, 
													  Upcoding, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 18, 2016

				 Amsterdam-based telecommunications company VimpelCom Limited and its wholly owned Uzbek subsidiary, Unitel LLC, agreed to pay roughly $795 million under settlements with the DOJ, SEC and the Public Prosecution Service of the Netherlands to settle charges of violating the anti-bribery provisions of the Foreign Corrupt Practices Act.  Specifically, the companies admitted making more than $114 million in bribery payments to a government official in Uzbekistan to enable them to enter and continue operating in the Uzbek telecommunications market.  It is one of the largest global FCPA settlements ever and the largest case to date brought under the DOJ's Kleptocracy Asset Recovery Initiative.  Whistleblower Insider				 					 

						
Tagged in:
													  FCPA, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 17, 2016

				 Fifty-one hospitals in 15 states agreed to pay more than $23 million to settle charges of violating the False Claims Act by implanting cardiac devices in Medicare patients in violation of Medicare coverage requirements.  These settlements represent the final stage of a nationwide investigation into the practices of hundreds of hospitals improperly billing Medicare for these devices, which in total have yielded more than $280 million.  The allegations against most of the current settling hospitals originated in a whistleblower lawsuit brought under the qui tam provisions of the False Claims Act by Leatrice Ford Richards, a cardiac nurse and Thomas Schuhmann, a health care reimbursement consultant.  They will receive a whistleblower reward of more than $3.5 million from the proceeds of the government's recovery from these current settlements.  The settling hospitals and health care companies included Arkansas Heart Hospital (AK); Aurora Health Care (WI); Cleveland Clinic Foundation (OH); Dignity Health (CA); MGH Wind Down (MI); Monongalia County General Hospital (WV); Mount Sinai Medical Center (FL); Nacogdoches Memorial Hospital (TX); Northwell Health (NY); Sentara Healthcare (VA); and Sisters of Charity of Leavenworth Health System (CO).  DOJ				 					 

						
Tagged in:
													  FCA Federal, 
													  Hospital Fraud, 
													  Medical Billing Fraud, 
													  Medical Devices and DME, 
													  Medicare, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 17, 2016

				 The U.S. District Court of South Carolina awarded a $9,283,123.00 default judgment against Lacy School of Cosmetology and its president Earnest “Jay” Lacy, for presenting false claims to the U.S. Department of Education for federal student loans and grants.  According to the government, the school failed to comply with numerous federal program regulatory requirements, making unauthorized disbursements of federal student aid funds, failing to refund student credit balances, and concealing its actions by submitting false statements of compliance.  The default judgment is based on a whistleblower lawsuit filed under the qui tam provision of the False Claims Act.  DOJ (SC)				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 16, 2016

				 Two subsidiaries of Massachusetts software company PTC Inc. agreed to pay a $14.54 million penalty to resolve charges of violating the Foreign Corrupt Practices Act by improperly providing recreational travel to Chinese government officials.  According to company admissions, Parametric Technology (Shanghai) Software Company Ltd. and Parametric Technology (Hong Kong) Ltd., through local business partners, arranged and paid for employees of various Chinese state-owned enterprises to travel to the U.S., ostensibly for training at PTC Inc.’s headquarters, but primarily for recreational travel to other parts of the country, including New York, Los Angeles, Las Vegas and Hawaii.  PTC paid more than $1 million through its business partners to fund these trips, while during the same time period, it entered into more than $13 million in contracts with the Chinese state-owned entities.  PTC settled related charges with the SEC by agreeing to pay $11,858,000 in disgorgement plus $1.764 million in prejudgment interest, bringing the company's total government payout to $28 million.  DOJ				 					 

						
Tagged in:
													  FCPA, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 12, 2016

				 New Jersey Doctor Labib E. Riachi and two companies he owns, Riachi, Inc. and Center for Advanced Pelvic Surgery, agreed to pay $5.25 million to resolve allegations they violated the False Claims Act by billing Medicare and Medicaid for anorectal manometry and electromyography diagnostic tests, even though most of the tests were never performed.  The settlement also resolves charges that they submitted claims to Medicare for physical therapy services that should not have been paid because they were not performed by a qualified therapist.  DOJ (NJ)				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  Improper Medical Personnel, 
													  Medicaid, 
													  Medical Billing Fraud, 
													  Medicare, 
													  Provider Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 11, 2016

				 Morgan Stanley agreed to pay a $2.6 billion penalty “for misleading investors about the subprime mortgage loans underlying the securities it sold” in the period leading up to the financial crisis.  As part of the agreement, Morgan Stanley admitted that it failed to disclose critical information to prospective investors about the quality of the mortgage loans underlying its residential mortgage-backed securities (RMBS) which ultimately caused investors, including federally insured financial institutions, to lose billions of dollars from investing in Morgan Stanley in the 2006-07 timeframe.  The $2.6 billion civil penalty resolves claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  In addition, the states of New York and Illinois announced their own settlements with Morgan Stanley for $550 million and $22.5 million, respectively.  When combined with prior settlements with other regulators -- $225 million to the National Credit Union Administration; $1.25 billion to the Federal Housing Finance Agency; $86.95 million to the Federal Deposit Insurance Corporation; and $275 million to the SEC -- this brings to almost $5 billion the total payout by Morgan Stanley in connection with its fraudulent sales of RMBS.  Whistleblower Insider				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 11, 2016

				 Compounding pharmacies WELLHealth and Topical Specialists and four physicians, Manish Bansal, Mehul Parekh, Marisol Arcila, and Syed Asad, agreed to pay approximately $10 million to resolve allegations they violated the False Claims Act by submitting false claims to TRICARE, the military’s healthcare program.  According to the government, the physicians wrote hundreds of prescriptions for pain and scar creams never used by patients and billed to the government at a cost which yielded up to 90% in profits.  Bansal is a cardiologist at Baptist Hospital; Arcila is a pain management physician at Premier Spine & Pain Center; Asad is a neurologist at Universal Neurological Care; Parekh is a general practice physician at Baptist Hospital.  DOJ (M.D.Fla)				 					 

						
Tagged in:
													  Compounding Pharmacy Fraud, 
													  FCA Federal, 
													  Other Government Health Programs, 
													  Pharma Fraud, 
													  Provider Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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