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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.

				

			

			
						
					
			

	
		
		

			

				
				
August 9, 2021

				 Ralph Hackett, a fruit broker in California’s Central Valley, will pay $1.255 million to resolve criminal charges and civil claims arising from his role in a crop insurance fraud scheme.  In a guilty plea, Hackett acknowledged that he authorized alterations to business records and misstatements to underreport the table grapes sold by another individual, so that the individual could submit fraudulent crop insurance claims between 2012 and 2015.  Hackett agreed to pay criminal restitution of $650,000 and a civil penalty of $605,000; his prison sentence is yet to be determined.  USAO ED Cal				 					 

						
Tagged in:
													  Criminal Proceedings, 
													  Crop Insurance, 
													  FCA Federal, 
													  FIRREA, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 9, 2021

				 The owners of North Carolina compounding pharmacy Wellcare Compouding, David Tsui and Lois Tsui, paid $1.1 million to resolve allegations that they violated the False Claims Act by submitting false claims for payment to the TRICARE program in 2014 and 2015.  The government alleged that Wellcare made improper payments to physicians and “marketers” in violation of the Anti-Kickback Statute and encouraged medically unnecessary prescriptions consisting of high-margin ingredients in order to maximize the pharmacy’s reimbursement. David Tsui had been convicted of healthcare fraud in 2009 and was excluded from participation in federal healthcare programs; the government alleged that his involvement and ownership was intentionally concealed.  USAO MD NC				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  Compounding Pharmacy Fraud, 
													  FCA Federal, 
													  Healthcare Fraud, 
													  Improper Medical Personnel, 
													  Lack of Medical Necessity, 
													  Other Government Health Programs, 
													  Pharma Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 6, 2021

				 Maryland-based National Spine & Pain Center (NSPC) and its affiliate, Physical Medicine Associates, Ltd. (PMA), have agreed to pay $5.1 million to Medicare and enter into a non-prosecution agreement to settle a criminal fraud investigation.  In violation of the Anti-Kickback Statute, NSPC and PMA had conspired with a now-defunct California-based genetics testing company called Proove Biosciences to have Proove pay illegal kickbacks to NSPC and PMA physicians in exchange for a certain volume of test referrals.  Nine individuals have been charged in connection with the scheme.  USAO SDCA				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  Criminal Proceedings, 
													  Healthcare Fraud, 
													  Medicare, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 6, 2021

				 Chandra Yarlagadda, who owned and operated biodiesel supplier Alpha Bioenergy LLC, was sentenced to two and a half years in prison and ordered to pay restitution of $3.3 million following his guilty plea to income tax evasion charges.  Yarlagadda, who reported income and expenses associated with Alpha Bioenergy on Schedules C attached to his personal income tax returns, admitted that over the course of three years he reported that the company incurred expenses totaling more than $14.2 million for the purchase and retirement of Renewable Identification Numbers (RINs) used by the EPA, when, in fact, he had incurred only $80,000 in RIN expenses during those years.  Without the inflated deduction claims, Yarlagadda would have owed an additional $2.3 million in federal income taxes.  DOJ				 					 

						
Tagged in:
													  Criminal Proceedings, 
													  Environmental Fraud, 
													  Tax Credit and Deduction Fraud, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 6, 2021

				 A county in California and a county medical center have agreed to pay $11.4 million to resolve allegations of improperly billing a federal healthcare program between 2013 and 2017.  According to whistleblower Felix Levy, a former employee of San Mateo County Medical Center (SMMC), San Mateo County and SMMC billed Medicare for uncovered hospital stays for patients that were admitted without regard to medical necessity.  USAO NDCA				 					 

						
Tagged in:
													  FCA Federal, 
													  Healthcare Fraud, 
													  Lack of Medical Necessity, 
													  Medicare, 
													  Whistleblower Case, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 6, 2021

				 Colorado resident Wayde McKelvy was sentenced to 18 years in prison and ordered to pay $37 million in restitution following conviction on charges related to his operation of a Ponzi scheme.  McKelvy and others operated Mantria Corporation, which they claimed offered huge returns by investing in real estate and green energy projects.  Through these misrepresentations, defendants obtained more than $54 million in funds from duped investors.  USAO ED PA				 					 

						
Tagged in:
													  Criminal Proceedings, 
													  Financial and Investment Fraud, 
													  Misrepresentations, 
													  Ponzi Schemes, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 6, 2021

				 Alaska commercial fisherman James Aaron Stevens was ordered to pay a $1 million fine and sentenced to six months in prison following his guilty plea on charges under the Lacy Act related to the false reporting of halibut and sablefish catch by his vessels the F/V Alaskan Star and F/V Southern Seas.  Over four seasons, Stevens falsified documents including individual fishing quota (IFQ) reports, state fish tickets, and fishing logbooks, to falsely claim that he harvested fish in locations and regulatory areas where he did not fish and omit areas where he actually fished. USAO AK				 					 

						
Tagged in:
													  Criminal Proceedings, 
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 5, 2021

				 Pipeline company Summit Midstream Partners LLC, Meadowlark Midstream Company LLC, and Summit Operating Services Company LLC, have agreed to pay $35 million in fines and penalties to settle criminal and civil cases arising from the discharge of 29 million gallons of “produced water” – a waste product of hydraulic fracturing – from Summit’s pipeline near Williston, North Dakota, over the course of nearly five months in 2014-2015.  As part of the settlement, Summit admitted that it operated the pipeline without a reliable leak detection system and made incomplete and misleading reports to federal and state authorities about the spill.  DOJ; EPA; December, 2021 DOJ Release				 					 

						
Tagged in:
													  Criminal Proceedings, 
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 5, 2021

				 Tennessee’s Department of Human Services has agreed to pay nearly $7 million to resolve allegations of submitting false information to the USDA’s Supplemental Nutrition Assistance Program, known until 2008 as the Food Stamp Program.  Under the direction of the Julie Osnes Consulting firm, numerous state agencies—including Alaska, Florida, Louisiana, Mississippi, Texas, Virginia, and Wisconsin—allegedly submitted false quality control data to the USDA, receiving performance bonuses as a result.  This is the ninth settlement in the matter; more than $67 million has been recovered thus far.  USAO EDWA				 					 

						
Tagged in:
													  Defendants, 
													  FCA Federal, 
													  Government Programs Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 5, 2021

				 Ascension Michigan and related hospitals, which allegedly billed federal healthcare programs for services performed by a gynecologic oncologist that were not medically necessary or rendered as represented, has agreed to pay $2.8 million to resolve their liability under the False Claims Act.  The settlement resolves claims from a 2017 qui tam suit by whistleblowers Pamela Satchwell, Dawn Kasdorf, and Bethany Silva-Gomez, that Ascension knowingly submitted claims for medically unnecessary hysterectomies and chemotherapy, and unrendered evaluation and management services.  Spurred by patient complaints, Ascension launched an internal investigation, ultimately self-disclosing the misconduct to the government in 2018.  As part of the settlement, Satchwell, Kasdorf, and Silva-Gomez will share in a $532,000 award.  USAO EDMI				 					 

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

					
	
							
	
		
		
	


 			


											

						

								

									
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