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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 14, 2020

Medical device maker Merit Medical Systems Inc. will pay $18 million to resolve claims first brought by a whistleblower under the False Claims Act that the company paid unlawful kickbacks to doctors and hospitals to induce them to use MMSI’s EmboSphere and QuadraSphere devices for embolization procedures.  MMSI was alleged to have offered hospitals and providers with millions of dollars in free advertising assistance, “educational” grants, and other services based on the providers’ past sales and to induce future sales.  The whistleblower, Charles J. Wolf, M.D., who will receive $2.65 million, was the Chief Compliance Officer for the company; according to DOJ, he repeatedly warned MMSI that its practices violated the Anti-Kickback Statue.  DOJ; USAO NJ; NC AG

October 14, 2020

Brazilian investment company J&F Investimentos S.A. and is meat producer subsidiary, JBS S.A., along with their principles Joesley Batista and Wesley Batista have entered into a settlement agreement with the SEC and DOJ, agreeing to pay nearly $283 million in fines and disgorgement and plead guilty to resolve charges under the FCPA arising from a scheme to bribe government officials in Brazil in order to obtain financing and other benefits for the companies.  Defendants paid approximately $180 million in bribes to obtain hundreds of millions of dollars in financing from Brazilian state-owned and state-controlled banks BNDES and Caixa, as well as to facilitate JBS’s acquisition of U.S. company Pilgrim’s Pride Corporation.  The bribes were allegedly paid from U.S. assets, including JBS operating accounts that also contained Pilgrim’s funds.  The SEC further charged that the Batistas, who exerted significant control over Pilgrim’s, caused it have an inadequate system of internal controls and accurate books and records.  The criminal fine of $256 million will be discounted up to 50% to credit defendants for a settlement with Brazilian authorities valued at $1.9 billion; the SEC agreement provides for a payment of $27 million in disgorgement and interest. Defendants also agreed to cooperate any ongoing or further investigations and implement an enhanced compliance program. DOJ; SEC; USAO EDNY

October 2, 2020

Pharmatech, Inc. and its CEO and founder Tuan Pham will pay over $3 million to settle allegations in a case initiated as a qui tam action under the False Claims Act.  The government alleged that defendants violated the Anti-Kickback Statute by paying a medical clinic, Imperial Valley Wellness, a per-specimen fee to induce it to refer orders for laboratory drug-testing to Phamatech which were subsequently billed to Medicare.  Many of the tests were also alleged to be not medically necessary. The whistleblower, former Pharmatech employee John Polanco, will receive over $500,000 from the settlement.  USAO SD Cal.

October 2, 2020

Advanced Pain Management Holdings, Inc. and its subsidiaries will pay $1 million to resolve claims brought by a whistleblower under the False Claims Act.  Defendants, which run ambulatory surgical centers, were alleged to have violated the Anti-Kickback Statute by improperly gifting incentive stock shares to non-employee physicians allegedly as a reward for past and anticipated referrals to APMH facilities, and by paying those physicians “medical director” fees tied to the volume of procedures at APMH facilities, without proper documentation of the agreement.  In addition, defendants were alleged to have performed unnecessary confirmatory urine drug testing on patients.  USAO ED WI

October 2, 2020

Two New York-based physical therapy providers have agreed to pay $4 million to resolve whistleblower-brought allegations of violating the False Claims Act by improperly billing multiple government healthcare programs, including Medicare, Medicaid, the Federal Employees’ Compensation Act Program (FECA), and the Federal Employees’ Health Benefits Program (FEHBP).  The alleged misconduct by Williamsburg Physical Therapy, P.C., Euro Physical Therapy, P.C., owners Alex and Diana Klurfeld, and management company First Plus Services, Inc. occurred between 2008 to 2018, and involved billing for physical therapy services provided or supervised by someone other than the licensed therapist listed on claims, as well as backdating services after treatment authorizations had expired.  USAO EDNY

September 30, 2020

Industries for the Blind and Visually Impaired, Inc., paid $1.9 million to resolve claims brought by a whistleblower under the False Claims Act alleging that the defendant, which received set-aside contracts under the federal government’s AbilityOne Program in exchange for agreeing to provide jobs to workers who are blind or visually impaired, misrepresented its employment of blind personnel.  In addition, company personnel allegedly accepted impermissible payments from manufacturers and improperly subcontracted work on government contracts to companies that did not generally use blind labor.  DOJ; USAO ED WI

September 29, 2020

Laredo optometrist David Mora will pay $3.23 million and enter into a corporate integrity agreement to resolve claims that he submitted false claims to Medicare between 2013 and 2019.  Mora allegedly billed for services including punctal plug insertion, sensorimotor testing, vision therapy, and amniotic membrane placement, where the patient’s condition did not warrant the service as medically necessary or reasonable.  USAO SD TX

September 29, 2020

JPMorgan Chase & Co. has agreed to pay $920 million to the CFTC and $35 million to the SEC, as well as enter into a three-year deferred prosecution agreement with the DOJ, in order to resolve charges of fraudulently engaging in unlawful trading in both the precious metals and U.S. Treasury futures contracts.  Between at least 2008 through 2016, numerous traders in JPMorgan’s New York, London, and Singapore offices—including the heads of both the precious metals and Treasuries sections—placed hundreds of thousands of spoof orders to artificially drive up supply and demand, ultimately succeeding in manipulating market prices.  Additionally, JPMorgan failed to identify, investigate, and stop the misconduct; JPMorgan also initially responded to government requests in a manner that was misleading.  The penalties imposed by the CFTC—which includes the highest restitution ($311.7 million), disgorgement ($172 million), and civil monetary penalty ($436.4 million) —amount to the highest monetary relief ever imposed by the CFTC in a spoofing case.  CFTC; SEC; USAO CT

September 28, 2020

Lakeway Regional Medical Center, LLC, together with affiliated parties Surgical Development Partners LLC, Surgical Development Partners of Austin Enterprises LLC, G. Edward Alexander, Frank Sossi, and John Prater, will pay $15.3 million to resolve allegations under the False Claim Act arising from the development of the hospital.  Defendants were alleged to have made numerous false statements in applying for a federally-insured mortgage loan for construction of the hospital, including overstating physician support for the hospital and understating other credit risks.  Specifically, while some investors had requested refunds, defendants delayed making those refunds in order to overstate cash on hand, and, after the mortgage funds were obtained, defendants distributed them in contravention of FHA requirements.  The hospital later defaulted on the loan. The government previously settled with other defendants.  DOJ 

September 28, 2020

Lakeway Regional Medical Center, LLC will pay $1,119,177 to resolve allegations that the hospital submitted false claims to the Medicare and Medicaid programs in the form of claims for payment for services that were based on referrals from doctors offered investment in a joint venture to purchase and then lease the hospital back to LRMC.  The government alleged that such an arrangement was unlawful under the Anti-Kickback Statute.  The case was initiated by a qui tam complaint filed by Dr. Robert Van Boven and Sharon Van Boven.  USAO WD TX
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