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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.

November 7, 2019

Tower Research Capital, LLC, a proprietary trading firm, has been ordered to pay a record $67.4 million for engaging in a manipulative and deceptive spoofing scheme from 2012 to 2013.  The Commission found that when Tower traders had genuine orders on one side of the market, they would also place orders on the other side that they intended to cancel before execution, intending to create a false impression of supply and demand to induce other market participants to trade against their genuine orders. The judgment for over $32.6 million in restitution, $10.5 million in disgorgement, and $24.4 million in civil monetary penalty is reportedly the largest ever ordered in a spoofing case. Tower also entered into a deferred prosecution agreement in a settlement with DOJ, crediting their monetary settlement with the CFTC and imposing compliance obligations. CFTC; DOJ

November 5, 2019

A home health agency that allegedly defrauded Medicare and Louisiana’s Medicaid program has agreed to pay $2.5 million to settle claims arising from a qui tam suit.  Defendants Health Care Options, Inc., Health Care Options of Lafayette, Inc., Home Care Options Houston, Inc., and Howard Austin, II allegedly submitted reimbursement claims involving non-face-to-face encounters, as required by program rules.  USAO MDLA

November 4, 2019

A Maryland-based plaintiffs’ law firm, Saiontz & Kirk, P.A., has paid the United States over $91 million to settle allegations that it failed to repay Medicare for conditional payments made to medical providers on behalf of firm clients.  Over the course of several years, the firm had received payments from Medicare to cover medical bills for clients involved in four injury cases.  However, after negotiating for and receiving settlement proceeds, the firm and its clients allegedly failed to return those conditional payments.  USAO MD

November 1, 2019

A New York-based painting contractor has agreed to pay $3 million to settle a suit alleging it misrepresented compliance with Disadvantaged Business Enterprise (DBE) rules in connection with two federally funded construction projects.  The False Claims Act violations involved Ahern Painting Contractors Co., which was contractually required to hire DBE subcontractors to perform renovation work on the Brooklyn Bridge and Queens Plaza.  However, Ahern hired a non-DBE, Spectrum Painting Corp., and repeatedly submitted false statements to the government that represented the work was done by a real DBE, Tower Maintenance Corp.  USAO SDNY

October 31, 2019

In the largest healthcare fraud case ever to come out of Mississippi, pharmacy owner Thomas Spell has been sentenced to 10 years in prison and ordered to pay over $243 million in restitution for knowingly defrauding TRICARE.  Between 2014 and 2016, Spell and his co-conspirators had deviously marketed compounded medications based on their rate of reimbursement from TRICARE, paid illegal kickbacks to marketers in order to obtain prescriptions from TRICARE beneficiaries, and improperly waived mandatory copayments for TRICARE beneficiaries.  USAO SDMS

October 29, 2019

The co-defendant of a man recently sentenced for orchestrating the largest Ponzi scheme ever charged in Maryland has been sentenced to 14 years in prison and ordered to pay at least $189 million in restitution.  To facilitate the scheme to sell fake consumer debt portfolios, Jay Ledford create fake sales agreements, tax returns, and other documents to co-defendant Kevin Merrill, knowing they would be used to defraud investors.  When the two were arrested in 2018 with fellow co-conspirator Cameron Jezierski, the five-year scheme had already raked in over $396 million, with only 14% actually used to purchase consumer debt portfolios.  USAO MD

October 29, 2019

Encompass Health Corporation (EHC), f/k/a HealthSouth Corporation, has agreed to pay $4 million to resolve of improperly billing Medicare.  According to the DOJ, between 2008 and 2012, an inpatient rehabilitation facility owned by EHC had improperly assigned low Functional Independence Measure scores on Patient Assessment Instrument forms in a bid to receive higher reimbursements from Medicare.  USAO NV

October 29, 2019

A former resident of Atlanta has been sentenced to 1.5 years in prison and ordered to pay $306,179 in restitution for defrauding PERACare, the Colorado Public Employees Retirement Association’s health insurance plan.  For more than two years, Michael Bang allegedly submitted fraudulent reimbursement claims involving three Atlanta-area pharmacies to Express Scripts, which administers PERACare’s prescription benefits. Altogether, his scheme netted him over $300,000.  USAO NDGA

October 28, 2019

Atheir Amarrah, the owner of Michigan-based Prompt Care Home Health Services Inc, has been sentenced to 5 years in prison and ordered to pay $1 million in restitution after pleading guilty to paying recruiters for referrals to Medicare beneficiaries.  In his guilty plea, Amarrah also admitted to billing Medicare for claims tainted by illegal kickbacks.  DOJ

October 28, 2019

Sanford Health, Sanford Medical Center, and Sanford Clinic have agreed to pay $20.25 million and enter into a Corporate Integrity Agreement in order to resolve alleged violations of the Anti-Kickback Statute and False Claims Act.  Despite warnings by several physicians that a top neurosurgeon was illegally profiting off his use of implantable medical devices as well as performing medically unnecessary surgeries involving the devices, Sanford did nothing to stop the offender, allowing Medicare and Medicaid to continue being defrauded.  The allegations were raised by Sanford surgeons Drs. Carl Dustin Bechtold and Bryan Wellman, who will share in a $3.4 million cut of the settlement proceeds.  DOJ; USAO SD
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