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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 13, 2015

				 Tamara Esponda, owner of Miami-area pharmacy Biomax Pharmacy Inc., was sentenced to 42 months in prison and to pay roughly $1.6 million in restitution for her role in the submission of more than $1.5 million in fraudulent claims to Medicare Part D.  According to admissions made in connection with Esponda’s guilty plea, Biomax Pharmacy submitted fraudulent claims to Medicare for prescription drugs that were not prescribed by physicians, not medically necessary and not provided to Medicare beneficiaries.  Esponda further admitted that in perpetrating this fraud she and her accomplices used the beneficiaries’ and doctors’ Medicare identification numbers without their consent.  DOJ				 					 

						
Tagged in:
													  Lack of Medical Necessity, 
													  Medical Billing Fraud, 
													  Part D, 
													  Pharma Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 6, 2015

				 Valery Bogomolny, owner of Royal Medical Supply, was convicted for his role in a $4 million Medicare fraud scheme.  According to evidence presented at trial, Bogomolny used his company to bill Medicare for power wheelchairs, back braces and knee braces that were medically unnecessary, not provided to beneficiaries or both.  The evidence further showed Bogomolny created false documentation to support his false billing claims, including creating fake reports of home assessments that never occurred.  DOJ				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 6, 2015

				 Former CEO of TierOne Bank Gilbert G. Lundstrom was convicted for orchestrating a scheme to defraud TierOne’s shareholders and to mislead regulators by concealing more than $100 million in losses on loans and declining real estate.  In 2014, co-conspirators James Laphen, TierOne’s former president and chief operating officer, and Don Langford, TierOne’s former chief credit officer, pleaded guilty to multiple felonies in connection with their participation in the scheme.  DOJ				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 6, 2015

				 Roger Rousseau, former medical director of defunct health provider Health Care Solutions Network Inc. (HCSN) was sentenced to 192 months in prison for his role in a scheme to fraudulently bill Medicare and Florida Medicaid more than $63 million.  Also sentenced to prison for their role in the scheme were therapists Liliana Marks for 72 months and Doris Crabtree and Angela Salafia, each for 60 months.  According to evidence presented at trial, HCSN purported to provide intensive mental health services to Medicare and Medicaid beneficiaries but these services were not medically necessary and were often never even provided.  HCSN also paid kickbacks to assisted living facility owners and operators who in exchange referred beneficiaries to HCSN.  In support of this scheme, Rousseau routinely signed what he knew to be fabricated and altered medical records.  And Crabtree, Salafia and Marks fabricated HCSN medical records to support the fraudulent claims.  In total, HCSN submitted roughly $63.7 million in false and fraudulent claims to Medicare.  DOJ				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 5, 2015

				 The Department of Justice’s US Trustee Program entered into a national settlement with Wells Fargo Bank requiring the bank to pay $81.6 million for failing to provide homeowners with legally required notices and thus the opportunity to challenge the accuracy of mortgage payment increases.  Wells Fargo acknowledged failing to timely file more than 100,000 payment change notices and perform more than 18,000 escrow analyses in cases involving nearly 68,000 accounts of homeowners in bankruptcy between 2011 and 2015.  DOJ				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 5, 2015

				 A federal jury convicted Anthony Allen and Anthony Conti, former Rabobank derivative traders, for manipulating the London InterBank Offered Rates (LIBOR) for the US Dollar and the Yen, benchmark interest rates to which trillions of dollars in interest rate contracts were tied.  DOJ				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 4, 2015

				 AstraZeneca LP and Cephalon, Inc. agreed to pay $54 million to settle government charges they violated federal and state False Claims Acts by overcharging state Medicaid programs for their pharmaceutical products.  AstraZeneca will pay $46.5 million and Cephalon, the wholly-owned subsidiary of Teva Pharmaceutical Industries. Ltd., will pay $7.5 million.  According to the government, the two pharmaceutical companies underpaid drug rebates owed the states under the Medicaid Drug Rebate Program, which requires drug makers to periodically return to the government a portion of their Medicaid proceeds.  The allegations first arose in a whistleblower lawsuit filed by Virginia pharmacist and attorney Ronald Streck under the quit tam provisions of the Federal False Claims Act, New York False Claims Act and other state false claims statutes.  Mr. Streck will receive a yet-to-be-disclosed whistleblower award from a portion of the government’s recoveries.  Whistleblower Insider				 					 

						
Tagged in:
													  Drug and DME Pricing, 
													  FCA Federal, 
													  FCA State, 
													  Pharma Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 4, 2015

				 Tampa, Florida investment advisor and founder of OM Global Investment Fund LLC Gignesh Movalia was sentenced to 18 months in prison and to pay $5,394,419 in restitution for perpetrating a $9 million investment fraud scheme involving Facebook stock.  In connection with his guilty plea, Movalia admitted raising more than $9 million from 130 investors by falsely claiming to have access to pre-initial public offering shares of Facebook Inc.  DOJ				 					 

						
Tagged in:
													  Misrepresentations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 2, 2015

				 Massachusetts-based telecom software company NetCracker Technology Corp. agreed to pay $11.4 million, and Virginia-based information technology company Computer Sciences Corp. agreed to pay $1.35 million to settle charges they violated the False Claims Act by using individuals without security clearance on a government defense contract.  The allegations first arose in a whistleblower lawsuit filed by former NetCracker employee John Kingsley under the qui tam provisions of the False Claims Act.  Mr. Kingsley will receive a whistleblower award of $2,358,750 as his share from the government’s recovery in this case. Whistleblower Insider				 					 

						
Tagged in:
													  Contract Non-Compliance, 
													  Defense Contract Fraud, 
													  FCA Federal, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 30, 2015

				 The Department of Justice reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices implanted in Medicare patients in violation of Medicare coverage requirements.  The devices, called implantable cardioverter defibrillators (ICDs), are electronic devices implanted near and connected to the heart to detect and treat chaotic, extremely fast, life-threatening heart rhythms, called fibrillations, by delivering a shock to the heart, restoring the heart’s normal rhythm.  Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare.  According to the government, from 2003 to 2010 each of the settling hospitals implanted ICDs during periods prohibited by the Medicare’s National Coverage Determination.  Most of the settlements originated from allegations first raised 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 have so far received a combined whistleblower award of more than $38 million from the settlements.  The Department of Justice is continuing to investigate additional hospitals and health systems.  DOJ				 					 

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

					
	
							
	
		
		
	


 			


											

						

								

									
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