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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.

March 4, 2020

STG Healthcare of Atlanta, Inc. and senior executives Paschal Gilley and Mathew Gilley have agreed to resolve fraud allegations by paying $1.75 million.  The case against the hospice was launched by two former employees, Serita Samuel and Miranda Eskridge, who alleged in a qui tam suit that STG Healthcare submitted false claims to Medicare and Medicaid that arose from illegal payments to so-called back-up medical directors, and that were on behalf of patients who were not terminally ill and thus ineligible for palliative care.  GA AG; USAO NDGA

March 2, 2020

The owners and operators of Middlesex Rheumatology in Connecticut, Dr. Crispin Abarientos and his wife Dr. Antonieta Abarientos, have agreed to pay $4.9 million to settle allegations of violating federal and state False Claims Act.  Between 2013 to 2017, the Abarientos allegedly billed Medicaid for an injectable prescription drug called Remicade, which is used to treat rheumatoid arthritis, but then failed to administer the drugs on Medicaid patients.  Instead, they administered them on patients covered by Medicare or the Connecticut State Employees Health Plan, then billed the two providers for the drugs again even though the cost had already been covered by Medicaid.  USAO CT

February 28, 2020

Nursing home chain Diversicare Health Services, Inc. has agreed to pay $9.5 million to resolve whistleblower-brought allegations of submitting claims to Medicare and Medicaid for medically unnecessary rehabilitation therapy services.  According to separate qui tam complaints by former employees, Mary Haggard and Bryant Fitzmorris, between 2010 to 2015, Diversicare unnecessarily placed beneficiaries in the highest category of reimbursement in order to receive higher payouts, and submitted forged pre-admission evaluation certifications to Medicaid.  As part of the settlement, Diversicare has entered into a Corporate Integrity Agreement for five years, Haggard will receive approximately $1.4 million, and Fitzmorris will receive approximately $145,450.  DOJ; USAO MDTN

February 28, 2020

Sanofi-Aventis U.S., LLC has agreed to pay $11.85 million to resolve allegations of paying kickbacks to Medicare patients in connection with a multiple sclerosis drug called Lemtrada.  According to the press release, Lemtrada costs nearly $100,000 per patient per year, and Medicare co-pays can be many thousands of dollars per year.  In order to break down barriers to access for Medicare patients, Sanofi allegedly provided kickbacks to them via payments to a purportedly independent charitable foundation, The Assistance Fund (TAF), which helps covers the co-pays in violation of the Anti-Kickback Statute.  The scheme was reported by a partnership formed by Sanofi's predecessor, Genzyme Corporation, which will receive about $2.7 million for their role in the case.  USAO MA

February 26, 2020

The two owners and operators of Royal Care Pharmacy in Los Angeles have been ordered to pay restitution of $11.8 million to Medicare and $17,000 to Cigna after being found guilty of healthcare fraud and money laundering.  Aleksandr Suri and Maxim Sverdlov were also sentenced to 12 years in prison.  From 2012 to 2015, the two had fraudulently billed Medicare and Cigna for prescription medications that were not purchased or dispensed to beneficiaries, hiding the conspiracy and laundering the proceeds through fake invoices.  DOJ

February 21, 2020

Wells Fargo & Co. will pay a total of $3 billion in a federal settlement resolving criminal, civil, and administrative liability with respect to its “cross-selling” sales practices between 2002 and 2016 that led to the opening of millions of checking, savings, credit card, and other accounts on behalf of individual customers under false pretenses or without the customers’ consent.  As part of the settlement, Wells Fargo admitted that it collected millions of dollars in fees and interest to which the Company was not entitled, harmed customer credit ratings, and unlawfully misused customers’ personal information.  Wells Fargo entered into a three-year deferred prosecution agreement requiring the bank to take certain compliance steps and cooperate with ongoing investigations.  Of the $3 billion settlement, $500 million resolves SEC claims that the bank, knowing about the underlying violations, mislead investors about the success of its business; the SEC settlement will be distributed to harmed investors.  The federal settlement is in addition to a $575 million 2018 settlement Wells Fargo entered into with 50 states and the District of Columbia and a $100 million 2016 fine from the CFPB arising from the same conduct.  DOJ; SEC; WD NC; CD Cal

February 19, 2020

Guardian Elder Care Holdings, Inc. has agreed to pay $15.5 million to settle claims of defrauding Medicare and Medicaid.  In a qui tam suit filed in 2015, whistleblowers Philippa Krauss and Julie White alleged that from 2011 to 2017, the Pennsylvania-based nursing home chain pressured its therapists to provide medically unnecessary rehabilitation to patients suffering from dementia or dying in hospice care in order to boost its profits.  During the subsequent government investigation, Guardian Elder Care self-disclosed that it had also billed federal healthcare programs for services performed by two excluded individuals.  As part of the settlement, Guardian Elder Care has entered into a chain-wide Corporate Integrity Agreement with the Department of Health and Human Services, and Krauss and White will split a $2.8 million relator's share.  USAO EDPA; USAO WDPA

February 14, 2020

Veterinary drug distribution company Animal Health International Inc. pled guilty to charges that it introduced misbranded drugs into interstate commerce, including by distributing wholesale veterinary drugs to end users and unlicensed individuals.  AHI's parent company, Patterson Companies, Inc., entered into a deferred prosecution agreement with specific compliance program guidelines.  AHI will forfeit $46.8 million, and pay fines totaling $6 millionUSAO WD VA
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