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FCA Federal

This archive displays posts tagged as relevant to the federal False Claims Act. You may also be interested in the following pages:

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Sharp HealthCare — Medicare Fraud/Kickbacks (undisclosed settlement amount)

Three of our whistleblower attorneys represented a whistleblower in a qui tam action under the False Claims Act against Sharp HealthCare, a regional hospital system in San Diego.  Our client alleged that the Sharp Healthcare Center for Research, Sharp’s clinical-trial research arm, fraudulently billed government payers in violation of “secondary payer” rules that prohibit billing the government when other payers will pay for a patient’s care. Our whistleblower client also alleged that Sharp cultivated an illegal kickback scheme to entice prospective trial sponsors to host clinical trials at Sharp by regularly undervaluing Sharp’s costs involved in managing clinical trials.  By offering below-market value incentives and billing government and commercial insurers for injuries, the lawsuit alleged that Sharp sought to increase its attractiveness to trial sponsors. Sharp’s alleged purpose was to burnish the organization’s reputation and offer a lucrative stream of income for Sharp-affiliated physicians involved in clinical trials. Sharp settled the whistleblower’s case for an undisclosed amount.  Read more here.

Unitrans International Inc., Anham FZCO, et al. — Government Contract Fraud ($45 million)

Our attorneys represented Rory Maxwell, John Bush, and Supreme Foodservice GmbH in a qui tam action under the False Claims Act against Unitrans International Inc., a privately held Virginia defense contracting company, and Anham FZCO, an associated Dubai Free Zone company, for making false certifications of compliance with the U.S. sanctions regime against Iran to induce the U.S. Defense Logistics Agency and the U.S. Army to award Anham wartime contracts to provide food and transportation to U.S. troops.  Our whistleblower clients also alleged Anham knowingly and falsely represented construction progress on its Bagram warehouse in related bid proposals to the government.  In December 2019, Unitrans agreed to pay $45 million to resolve criminal and civil allegations related to this alleged misconduct, which includes $27 million to resolve our whistleblower clients’ False Claims Act allegations.  Read more about the case at the Department of Justice website here and in The Washington Post here.

December 5, 2019

Maryland-based internist Noman Thanwy, M.D. has paid over $176,000 to settle allegations of submitting false claims to Medicare for medically unnecessary autonomic nervous function and vestibular function tests.  Although the tests are typically performed only once per beneficiary to confirm diagnoses of relatively uncommon disorders, Dr. Thanwy, who lacked the necessary training and equipment to perform the tests, was allegedly using them to monitor patient symptoms.  USAO MD

December 4, 2019

A subcontractor providing logistical services on a U.S. Defense Logistics Agency (DLA) contract with Anham FZCO has agreed to pay $45 million to resolve criminal obstruction charges and civil False Claims Act allegations.  Anham and Unitrans International Inc. had been accused of failing to comply with contract provisions prohibiting materials used to support U.S. troops in Afghanistan from passing through Iran.  Based on a qui tam suit by whistleblowers Rory Maxwell, John Bush, and Supreme Foodservice GmbH, the two contractors also fraudulently induced contracts with DLA and the Army by falsely certifying compliance with the Iran sanctions and falsely representing the status of another project.  DOJ

December 3, 2019

In the second settlement to come out of a federal investigation into the generic pharmaceutical industry, Rising Pharmaceuticals Inc. has agreed to pay over $4 million to settle civil and criminal charges stemming from violations of the False Claims Act and Anti-Kickback Statute.  In the criminal case, Rising allegedly teamed up with a competing generic drug manufacturer to fix prices and divide up the market for a hypertension drug, Benazepril HCTZ, while in the civil case, the company allegedly paid and received illegal remuneration through similar arrangements with another generic drug manufacturer.  Under the newly signed deferred prosecution agreement, Rising has agreed to cooperate fully with the ongoing investigation.  DOJ; USAO EDPA

December 3, 2019

Weapons manufacturer Capco, LLC has agreed to pay over $1 million to resolve fraud allegations raised by its former quality engineer, James Cole.  According to Cole, from 2016 to 2018, the company knowingly certified that M320 grenade launchers sold to the U.S. Army were manufactured in compliance with contract specifications, when in fact a critical component had been manufactured using the wrong type of steel.  Capco also failed to disclose the issue despite conducting an internal investigation.  For bringing the issue to light, Cole will receive approximately $235,000 of the recovery. USAO CO

December 4, 2019

A small for-profit college and manager accused of defrauding the G.I. Bill program has agreed to pay $120,000 to resolve their liability under the False Claims Act.  New Horizons Spokane and its general manager, Spirit Dorris, admitted to failing to comply with a VA requirement that limited the enrollment of students funded by the G.I. Bill to no more than 85% of any given course. The “85/15 Rule,” as it is known, is meant to ensure that educational courses are offered because of public interest and value and not solely to take advantage of VA funding.  USAO EDWA

November 26, 2019

Boston Heart Diagnostics Corporation will pay $26.7 million to resolve claims that it paid illegal kickbacks to physicians who referred laboratory tests to the company.  Boston Health provided laboratory testing to hospitals in Texas in exchange for per-test payments from the hospitals.  In order to secure more referrals from the hospitals' doctors for its testing services, Boston Health set up "management service organizations" which made payments to referring physicians.  Although these physician payments were disguised as investment returns, they were actually based on, and were provided in exchange for, the physicans' referrals.  In addition, Boston Heart was alleged to have provided other remuneration to referring physicians, including the provision of in-office dieticians, and to have waived patient co-payments and deductibles.  The settlement resolves two different cases brought by  whistleblowers, who will receive $4.36 million from the settlement.  DOJ

November 25, 2019

Two entities agreed to pay a total of $1.2 million to resolve claims that the Puerto Rico Municipality of Sabana Grande improperly subcontracted work to be performed under a grant from the U.S. Dept. of Education to the Puerto Rico Department of Education for teacher training. The grant required that the work could not be performed by private entities, but the municipality subcontracted with and disbursed grant funds to private entity the Puerto Rico Olympic Committee (COPUR), which further subcontracted with the company Administrative, Environmental and Sports Consultants (AESC).  The municipality will pay $500,000, and COPUR agreed to pay $700,000.  In addition, the United States seized more than $1 million from bank accounts belonging to AESC owner Irving Riquel Torres in connection with related criminal proceedings against him.  USAO PR

Government Audit of Chronic Care Management Services Raises Serious Questions About Proposed Anti-Kickback Statute Safe Harbors

Posted  11/22/19
stethoscope on top of money and coins
The U.S. Department of Health and Human Services is engaged in what it calls a “Regulatory Sprint to Coordinated Care,” in order to, in the words of HHS Deputy Secretary Eric Hargan, “update, reform, and cut back our regulations to allow innovation toward a more affordable, higher quality, value-based healthcare system.”  On October 9, 2019, as part of this effort to “cut back” on regulations to advance...
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