DOJ FY2022 Annual Fraud Report Shows $2.2 Billion in Total Recoveries, with $1.9 Billion Thanks to Whistleblowers - But There are Reasons for Concern

The Department of Justice released its annual report of civil recoveries for fraud and false claims against the U.S., showing $2.2 billion in settlements and judgments for the fiscal year ending September 2022. The data released by DOJ show the critical role that whistleblowers play in securing these recoveries for the government:  of the $2.2 billion recovered, $1.96 billion – 89% – was recovered in cases initiated by whistleblowers under...

Top Ten Federal Financial and Healthcare Fraud Prison Sentences of 2022

Financial and healthcare fraud often can carry stiff monetary penalties for entities facing government enforcement, as shown on our other Top Ten Lists. Whistleblowers reporting wrongful conduct under one of the federal whistleblower reward laws sometimes find that criminal authorities are as interested in their allegations as civil enforcement agencies and authorities. Fraud can also result in criminal charges and prison sentences for the individual perpetrators of the fraud. The...

December 20, 2022

Following his conviction on charges related to his direction of a Ponzi scheme and the fraudulent sale of purported N95 masks during the pandemic, Christopher Parris was sentenced to 20.3 years in prison.  In the Ponzi scheme, which collapsed in 2018, Parris and co-conspirators – including Perry Santillo, obtained at least $115.5 million from approximately 1,000 investors, with claims that they were investing in a diversified investment portfolio when, in...

December 15, 2022

A physician and his Connecticut-based urgent care practices have agreed to pay over $4.2 million to settle allegations of submitting false claims to Medicare and the Connecticut Medicaid program.  Jasdeep Sidana—the owner and CEO of Docs Medical Group, Inc., Docs Medical Inc., Docs Urgent Care LLP, Lung Docs of CT, P.C., Epic Family Physicians, LLP, and Continuum Medical Group, LLC (collectively, DOCS)—allegedly billed for immunotherapy services, including allergy testing and...

October 4, 2022

Sebastian Vachon-Desjardins, a Canadian man who participated in a ransomware attack that affected victims around the world—including companies, municipalities, emergency services, hospitals, law enforcement, school districts, and higher education institutions—has been sentenced to 20 years in prison and ordered to forfeit $21.5 million; a restitution order will be issued at a later date.  According to the government, Vachon-Desjardin’s NetWalker ransomware had taken advantage of the COVID-19 pandemic to specifically target...

Telehealth Boomed During the Pandemic - and so Did Telehealth Fraud

Prior to the pandemic, telehealth was basically nonexistent, with one study clocking the percentage of “virtual” doctors’ visits before Covid-19 at zero percent. At the time, America’s largest insurer, Medicare, only covered telemedicine in limited circumstances that usually still involved a visit to a healthcare facility. Medicare’s coverage limitations demonstrated the Department of Health and Human Services’ (HHS) concerns that expanding telehealth would lead to a proliferation of fraud schemes,...

July 21, 2022

Jermaine Rose will spend 2 years in federal prison for abusing his position with the Michigan Unemployment Insurance Agency, using his insider access as a lead claims examiner to approve and release payment on fraudulent UI claims filed by his co-conspirators. In exchange, Rose received kickbacks ranging from $50 to $150 for each fraudulent claim he touched—claims which were submitted using fictitious or stolen identities. Rose, in his plea agreement,...

July 14, 2022

Bank of America will pay fines totaling $225 million to following federal investigation into its administration of state unemployment insurance and other public benefit programs, which it provided pursuant to contracts with 12 states to deliver benefits through prepaid debit cards. When demand for benefits surged with the COVID-19 pandemic, the Bank adopted automated fraud detection practices which it the government alleged it knew or should have known would lead...

Payments News Update - June 24, 2022

Legal and Regulatory Developments SPOTLIGHT: UK Watchdog to Review Post-Brexit Visa and Mastercard Fees Reuters – June 21, 2022 Britain's payment systems regulator (PSR) will conduct two market reviews of card fees charged by Visa and Mastercard, the U.S. companies that account for 99% of debit and credit card payments in the UK. The PSR's announcement on Tuesday follows heavy pressure from lawmakers to launch full market reviews to tackle...

May 31, 2022

Healthcare company SCWorx Corp. has agreed to resolve SEC charges that it made false and misleading statements in an April, 2020 press release, claiming in a press release that it had received a purchase order for millions of COVID-19 rapid test kits.  The announcement caused the company’s stock price to surge, but the SEC alleged that the company had neither a legitimate supplier of COVID-19 test kits nor an executed...