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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.

				

			

			
						
					
			

	
		
		

			

				
				
August 17, 2015

				 Following a special audit, the Indiana Attorney General has filed a lawsuit against a maintenance product company and a former school maintenance director demanding repayment of nearly $1 million for their illegal bribery and kickbacks scheme that defrauded the Warsaw Community Schools.   IN				 					 

						
Tagged in:
													  Government Procurement Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 10, 2015

				 A New Hampshire investment advisor was sentenced to up to 7 years in prison for fraud.  Richard M. Higgins plead guilty to one felony count of engaging in a course of conduct involving a scheme to defraud in connection with the purchase and sale of securities, and one felony count of a course of business that operated as fraud in connection with acting as an investment advisor.  Beginning in late 2006 and continuing through August 2007, Higgins solicited investors for a pooled investment in the form of a limited partnership, making a number of false and misleading statements.  Higgins then further defrauded the investors by providing them quarterly statements which regularly overstated the performance of their investments.  NH				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 4, 2015

				 Pediatric Services of America, Inc., reached a $2.7 million federal-state settlement resolving allegations that the company inappropriately failed to return overpayments received from state Medicaid programs as well as other federally insured health programs. PSA is also alleged to have overcharged for home nursing services by improperly rounding-up claims to the nearest whole hour.  Connecticut Department of Social Service Commissioner Roderick L. Bremby said, “This settlement exemplifies the outstanding work across the state and federal governments to obtain compensation for the taxpayer-funded Medicaid program when medical providers cross the line.”  CT				 					 

						
Tagged in:
													  Medicaid, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 3, 2015

				 19 states and the federal government have joined in a settlement valued at over $2.7 million with Georgia-based company Pediatric Services of America, Inc. (“PSA”).  The case began as a whistleblower action, filed in the Southern District of Georgia under the federal False Claims Act and various state false claims statutes, and was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Attorney’s Office for the Southern District of Georgia, the U.S. Department of Health and Human Services, and the Office of the Inspector General.  In addition, a National Association of Medicaid Fraud Control Units (NAMFCU) Team participated in the investigation and conducted the settlement negotiations with PSA on behalf of the states and included representatives from the Offices of the Attorneys General for the states of Massachusetts, Georgia, Virginia, Texas, Illinois, and Washington.  MA				 					 

						
Tagged in:
													  Whistleblower Case, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 29, 2015

				 New York Attorney General Eric T. Schneiderman announced the sentencing of the executive director of a company for stealing funds from the Nursing Home Transition and Diversion program, a Medicaid-funded program that provides senior citizens and those suffering from physical disabilities an alternative to institutional living through the use of Medicaid funds for renovations to the homes of the elderly and disabled (wheelchair ramps, grab bars, etc.).  Defendant plead guilty to grand larceny, based on the submission of bids and cost reports, which falsely stated the actual costs of the projects, significantly inflating the actual costs or including services which were never provided.  NY				 					 

						
Tagged in:
													  Home Health and Hospice, 
													  Medicaid, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 20, 2015

				 Following a jury trial, Humphrey Udeh was convicted of defrauding New York’s Medicaid program of over $1 million.  Udeh billed the state for over three thousand units of a highly-specialized and expensive liquid pediatric nutritional formula, when he actually dispensed over-the-counter nutritional supplement formulas.   In order to perpetuate the scam, Udeh utilized generic prescriptions of pediatric formula and false letters of medical necessity, obtained by employees of his company, Advanced Medical Supply, from unsuspecting physician and medical facilities.  He then used the generic prescriptions and false letters to support his fraudulent claims.  Udeh was sentenced to serve 7 to 21 years in state prison and pay a $1.7 million fine.  NY				 					 

						
Tagged in:
													  Medicaid, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 15, 2015

				 The New Mexico Attorney General announced the creation of the Fraud Recovery Strike Force, a unit in his office charged with aggressively investigating and  pursuing litigation to protect New Mexico  consumers, New Mexico taxpayers, and to recover public funds.  The Fraud Recovery Strike Force is charged with investigating false claims and deceptive practices, and is partnering with whistle-blowers to expose abuse and corruption.  The strike force will enforce state and federal law in order to recover millions of dollars fleeced from the public treasury and New Mexico’s economy at no additional cost to the taxpayer.  Its efforts will be directed to high priority risk areas including securities fraud, investments with public employee retirement funds, health care fraud, and marketplace fraud.  NM				 					 

						
Tagged in:
													  Reporting to Government, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 15, 2015

				 A Hawaii administrative panel determined that Liberty Dialysis was overpaid over $7 million for treatments given to Medicaid patients between 2006 and 2010.  While the Attorney General stated that the original overpayments were the result of a state computer error, Hawaii also announced that it was pursuing litigation against Liberty, which is alleged to have known it was being overpaid and continued to submit claims in a way designed to continue those overpayments.  HI				 					 

						
Tagged in:
													  Medicaid, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 10, 2015

				 New York reached a $22.4 million settlement with the pharmacy Trinity Homecare LLC, primarily owned by Walgreen Co.  The settlement relates to Synagis, an injectable drug for premature infants at risk for Respiratory Syncytial Virus (“RSV”).  The drug can cost more than $2,000 per dose.  Trinity had its staff try to sell Synagis by directly contacting the families of outpatient premature babies or their doctors, regardless of a patient’s need or if the baby’s current physician wanted it prescribed.  According to allegations, initially lodged by a whistleblower hospital physician, Trinity staff improperly obtained babies’ names and other patient information from the hospital’s neo-natal intensive care unit logbooks.  The whistleblower also alleged that Trinity misappropriated her name and medical license number on one alleged Synagis prescription for a baby she had never cared for.  The Attorney General also conducted an audit and found that Trinity billed Medicaid when the pharmacy had no written prescription or when a purported prescription was invalid, including because it lacked a prescriber’s signature, patient’s name or a date.  NY				 					 

						
Tagged in:
													  Pharma Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 6, 2015

				 New York announced a $400,000 settlement with a transportation company that was unable to provide documentation for services it had billed to Medicaid.  “Providers must be able to properly document services for which they received payment from Medicaid,” said Attorney General Schneiderman.  “Doing otherwise drains Medicaid of precious resources, and my office will steadfastly guard New York taxpayer dollars expended to ensure quality care to those most in need.”  NY				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  Medicaid, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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