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State Enforcement Actions

					
Each state enforces its laws and defends its interests, and states often work with the federal government in investigating and prosecuting corporate frauds.  Whistleblowers with knowledge of fraud or wrongful conduct that involves state or local funds or programs may be able to bring a claim under a state or local False Claims Act, and may be eligible to receive a monetary reward and protection against retaliation.


Below are summaries of recent settlements, successful prosecutions, and enforcement actions by states. If you believe you have information about fraud which could give rise to a claim under a State or Local False Claims Act or other whistleblower reward provision, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
February 27, 2023

				 Several individuals and entities involved with the Saratoga Center for Rehabilitation and Skilled Nursing Care have agreed to pay over $7.1 million to resolve allegations of violating the False Claims Act by submitting claims for essentially worthless services.  From 2017 until the center closed in 2021, while receiving reimbursements from New York’s Medicaid program, the center’s owners and operators failed to provide adequate staffing, hot water, and clean linens, and failed to dispose of solid waste.  As a result of these failures, conditions fell below regulatory standards, and residents suffered from unnecessary errors and neglect.  NY AG; DOJ				 					 

						
Tagged in:
													  FCA Federal, 
													  FCA State, 
													  Healthcare Fraud, 
													  Medicaid, 
													  SNF, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 16, 2023

				 Nexo Capital Inc., which provides crypto-asset-related financial services, has agreed to pay $45 million to multiple state and federal securities regulators to resolve allegations that it offered and sold unregistered securities.  An investigation by a working group of state securities regulators, North American Securities Administrators Association (NASAA), had found that Nexo illegally offered interest-bearing digital asset deposit accounts to over 90,000 clients with total assets valued at $800 million.  NJ AG				 					 

						
Tagged in:
													  Cryptocurrency, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 8, 2023

				 Centene Corporation has agreed to pay $215 million to resolve allegations of violating the California False Claims Act.  A government investigation revealed that for almost two years, Centene failed to disclose or pass on discounted prescription drug costs to the state’s Medicaid program, as mandated by program rules, and instead falsely reported higher costs incurred by two of its managed care plans, which together serve beneficiaries in over 20 counties.  CA AG				 					 

						
Tagged in:
													  FCA State, 
													  Healthcare Fraud, 
													  Medicaid, 
													  Pharma Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 7, 2023

				 A startup that operates as an online pharmacy for birth control and contraceptives has agreed to pay $15 million to settle whistleblower claims of defrauding California’s Medicaid program of millions of dollars.  In violation of the state False Claims Act, The Pill Club allegedly billed for ineligible services, services not rendered, and enormous quantities of expensive products not ordered by customers.  Investigators found that even in cases where customers asked to stop receiving those products, the company continued to dispense enormous quantities and bill the government for them.  CA AG				 					 

						
Tagged in:
													  FCA State, 
													  Healthcare Fraud, 
													  Lack of Medical Necessity, 
													  Medicaid, 
													  Pharma Fraud, 
													  Whistleblower Case, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 2, 2023

				 Central California medical provider Clinica Sierra Vista (CSV) has agreed to pay nearly $26 million to settle claims of violating the state False Claims Act.  Following an internal investigation, the company’s new management voluntarily disclosed to the government that former executives knowingly submitted false information on financial reports in order to receive higher payments from the state’s Medicaid program.  CA AG				 					 

						
Tagged in:
													  FCA Federal, 
													  FCA State, 
													  Healthcare Fraud, 
													  Medicaid, 
													  Provider Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 19, 2023

				 Cryptocurrency company Nexo Capital Inc. has agreed to pay $22.5 million and comply with a cease and desist order in order to settle SEC charges of failing to register the offer and sale of its retail crypto asset lending product.  The company has agreed to pay another $22.5 million and comply with additional terms in order to settle similar charges in California, Indiana, Kentucky, Maryland, New York, Oklahoma, South Carolina, Vermont, Washington, and Wisconsin.  As part of those additional terms, Nexo must notify all remaining U.S. investors to withdraw all remaining assets from Nexo’s platform by April 2023.  SEC, AG NY				 					 

						
Tagged in:
													  Cryptocurrency, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 22, 2022

				 New York doctor David DiMarco and his companies, D. B. DiMarco, M.D., P.C. and DiMarco Vein Centers LLC, has agreed to pay $2 million to New York’s Medicaid program and withdraw from providing services to it after an investigation found DiMarco submitted false claims between 2015 and 2021.  According to the NY AG’s office, DiMarco submitted more than a thousand claims for procedures without sufficient documentation showing the procedures performed or their medical necessity.  AG NY				 					 

						
Tagged in:
													  FCA State, 
													  Healthcare Fraud, 
													  Lack of Medical Necessity, 
													  Medicaid, 
													  Provider Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 9, 2022

				 White Glove Community Care, Inc., a home health agency in Brooklyn, has agreed to pay $1.2 million to the New York Medicaid program and return $2 million in unpaid wages to current and former employees, following a whistleblower’s lawsuit under the state and federal False Claims Acts.  A joint investigation by the NY AG and EDNY found that between 2012 and 2018, White Glove failed to pay its home health and personal care aides wages and benefits owed to them under the state’s Wage Parity Act, yet sought and received funds from the state’s Medicaid program for the full wages and benefits owed.  AG NY; USAO EDNY				 					 

						
Tagged in:
													  FCA Federal, 
													  FCA State, 
													  Healthcare Fraud, 
													  Home Health and Hospice, 
													  Medicaid, 
													  Whistleblower Case, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 7, 2022

				 Dignity Health and the Tenet Healthcare hospitals Twin Cities Community Hospital and Sierra Vista Regional Medical Center will pay a total of $22.5 million to resolve allegations that they submitted false claims to Medi-Cal in connection with the ACA’s Medicaid Adult Expansion program.  The defendants, who contracted with Medi-Cal, agreed to provide healthcare services to this newly-insured population and return surplus funds if they did not spend at least 85% of the specified funds on eligible services.  The government alleged that the hospitals falsely billed for “Enhanced Services,” which allowed them to overstate AE spending, including by billing for services that were duplicative of services already required. The settlements resolve claims brought in a whistleblower action by Julio Bordas, who previously served as a Medical Director for CenCal Health, the County Organized Health System through which Medi-Cal contracted with the hospitals. Bordas will receive $3.9 million as his share of the federal recovery.  DOJ; USAO CD Cal; CA				 					 

						
Tagged in:
													  FCA Federal, 
													  FCA State, 
													  Healthcare Fraud, 
													  Hospital Fraud, 
													  Medicaid, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 6, 2022

				 Centene will pay $17 million to the State of Oregon to resolve an investigation that the company, which served as a pharmacy benefit manager for the state’s Medicaid program, failed to provide certain pharmacy discounts in Oregon, resulting in inflated fees paid to Centene.  OR				 					 

						
Tagged in:
													  Drug and DME Pricing, 
													  FCA State, 
													  Healthcare Fraud, 
													  Medicaid, 
													  Pharma Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

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