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United States Targets a Private-Equity Firm and Pharmacy in a Whistleblower Case

Posted  02/26/18
By the C|C Whistleblower Lawyer Team On Friday the Wall Street Journal reported on the U.S. government’s decision to intervene in a False Claims Act qui tam case against pharmacy Diabetic Care Rx LLC and the private equity firm that holds a controlling stake in the pharmacy, Riordan Lewis & Haden Equity Partners (“RLHEP”). Diabetic Care is a compounding pharmacy that mixes different ingredients to create...

October 3, 2017

Pennsylvania garment wholesaler Notations, Inc. agreed to pay $1 million to settle charges of violating the False Claims Act by repeatedly ignoring warning signs that its business partner, which imported garments from China, was engaged in a scheme to underpay customs duties owed on the imported garments it sold to Notations.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The whistleblower will receive an award from the proceeds of the government's recovery.  DOJ (SDNY)

September 28, 2017

Vermont-based contractor J.A. McDonald, Inc., and its owner and president Eric Boyden, agreed to pay $270,000 to resolve allegations that JAM violated the False Claims Act by causing the State of Vermont to present false claims for payment to the United States in connection with the federally-funded construction of a two-span bridge on Vermont Route 116 in Bristol, Vermont.  Specifically, the settlement resolves allegations that JAM employees intentionally altered critical bridge components such that the bridge no longer conformed to specified safety standards, and that JAM employees took affirmative steps to conceal the alterations from the Vermont Agency of Transportation. DOJ (DVT)

Alaska Department of Health and Social Services to Pay Nearly $2.5 Million to Resolve Alleged False Claims for SNAP Funds

Posted  09/20/17
By the C|C Whistleblower Lawyer Team Earlier this week, the Department of Justice announced that it had reached a $2.5 million settlement with the Alaska Department of Health and Social Services (ADHSS) over allegations that it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program. Through SNAP, the U.S. Department of...

August 18, 2017

California announced a tentative settlement that provides over $51 million in debt relief for Californians who attended Corinthian Colleges. Corinthian intentionally targeted low-income, vulnerable individuals through deceptive and false advertising that misrepresented job placement rates and school programs. These unlawful activities were enabled by Aequitas Capital Management Inc., a private equity firm currently under U.S. Securities and Exchange Commission-imposed receivership. Federal student loans made up almost 90 percent of Corinthian’s revenue. To maintain this revenue, Corinthian needed its mostly low-income students to receive these loans. Federal rules require for-profit colleges receive at least 10 percent of their revenue from sources other than federal student aid. To help fill this gap, Aequitas and Corinthian created a financial arrangement whereby Aequitas provided private loans to Corinthian students, and Corinthian guaranteed Aequitas a profit and agreed to buy back all non-performing loans. CA, FL

May 26, 2017

Kuwaiti-based Agility Public Warehousing Co. KSC agreed to globally resolve criminal, civil, and administrative cases arising from allegations that it overcharged the United States when performing contracts with the Department of Defense to supply food for U.S. troops from 2003 through 2010.  As part of the settlement, Agility agreed to pay $95 million to resolve civil fraud claims, to forgo administrative claims against the United States seeking $249 million in additional payments under its military food contracts, and to plead guilty to a criminal misdemeanor offense for theft of government funds.  According to the government, Agility overcharged the DOD for locally available fresh fruits and vegetables that Agility purchased through the Sultan Center Food Products Company, K.S.C. (TSC).  Agility charged the full amount of TSC’s invoices despite agreeing with TSC it would pay 10 percent less than the amount billed.  The government further alleged Agility failed to disclose and pass through rebates and discounts it obtained from U.S.-based suppliers. The allegations originated in a whistleblower lawsuit filed against Agility and TSC under the qui tam provisions of the False Claims Act by Kamal Mustafa Al-Sultan, a former vendor of Agility.  Mr. Al-Sultan will receive a whistleblower award of $38.85 million from the proceeds of the government's recovery. DOJ

April 12, 2017

The Wisconsin Department of Health Services agreed to pay roughly $7 million to resolve allegations it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP). DOJ

April 10, 2017

The Virginia Department of Social Services agreed to pay roughly $7.1 million to resolve allegations it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP). DOJ

Two State Social Services Departments Settle FCA Suits over SNAP Funds

Posted  04/13/17
By the C|C Whistleblower Lawyer Team This week, the Virginia Department of Social Services (VDSS) and the Wisconsin Department of Health Services (WDHS) each agreed to pay the United States roughly $7M to settle allegations that they violated the FCA in their administrations of the SNAP program (formerly known as the Food Stamp program). Both VDSS and WDHS used the same consultant, Julie Osnes Consulting, to advise...

February 1, 2017

Jackson State University agreed to pay $1.17 million to settle charges it violated the False Claims act by mismanaging National Science Foundation grants.  Specifically, a 2012 NSF audit identified salary and non-salary expenditures by Jackson State that were unallowable, not allocable, and/or had insufficient, inadequate and/or no supporting documentation.  A subsequent NSF investigation determined that, in preparation for the audit, and subsequently in response to the preliminary audit findings, Jackson State fabricated time and effort reports and provided them to the auditors, and in some instances presented inadequate and/or no supporting documentation.  DOJ (SDMS)

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