FCA Federal

May 3, 2016

Pennsylvania joined with other states and the federal government in a $306 million civil settlement that resolves allegations that Olympus America, Inc. and some of its subsidiaries paid illegal kickbacks to healthcare providers. The settlement was the result of a whistleblower lawsuit – United States et al., ex rel. John Slowik v. Olympus America, Inc., et al – filed in New Jersey. The lawsuit alleged that Olympus used improper financial incentives to induce doctors and hospital executives to buy a wide ranging array of its endoscopes and other surgical equipment, and to thereby unlawfully increase sales and gain market share. PA, NY

March 28, 2016

Tennessee-based defense contractor Kilgore Flares Company and one of its subcontractors, New York-based ESM Group Inc., agreed to pay $8 million to resolve charges they violated the False Claims Act by selling defective and illegally imported infrared countermeasure flares to the U.S. Army and, for ESM, knowingly evading U.S. customs duties.  The allegations first arose in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Reade Manufacturing Company, a domestic manufacturer of magnesium powder which is used in the flares.  The company will receive a whistleblower award of $400,000 from the proceeds of the government’s recovery from ESM.  Whistleblower Insider  

March 23, 2016

Pennsylvania-based Respironics Inc. agreed to pay $34.8 million to resolve charges it violated the False Claims Act and Anti-Kickback Statute by paying kickbacks in the form of free call center services to durable medical equipment (DME) suppliers that bought its masks for patients with sleep apnea.  Respironics allegedly provided DME companies with call center services to meet their patients’ resupply needs at no charge as long as the patients were using masks that Respironics manufactured; otherwise, the DME companies would have to pay a monthly fee based on the number of patients who used masks manufactured by a competitor of Respironics.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Dr. Gibran Ameer, who has worked for different DME companies.  He will receive a whistleblower award of $5.38 million from the proceeds of the government's recovery.  DOJ

March 21, 2016

Maryland-based Coastal International Security, Inc. agreed to pay a total of $1.65 million to resolve criminal and civil allegations that the company defrauded the State Department during performance of a security contract and later concealed the fraud from contracting officials, and civil allegations that the company improperly obtained and used competitors’ pricing information to underbid competitors on government task orders.  Coastal International simultaneously agreed to pay $1.5 million to resolve civil claims under the False Claims Act for this conduct, as well as claims under the Procurement Integrity Act.  DOJ (EDVA)

March 18, 2016

A federal jury in New Orleans convicted Elaine Davis and Dr. Pramela Ganji for their roles in a $34 million Medicare fraud scheme.  The jury found that Davis, who owned Christian Home Health Care Inc., together with Ganji caused the healthcare company to bill Medicare for home health care services that were not needed and/or not actually provided.  Davis paid employees to recruit new patients and then sent their Medicare information to doctors, including Ganji, to obtain their signatures to certify that the patients qualified to receive home health care services, which trial evidence showed they did not qualify for or need.  DOJ

March 18, 2016

Alex Wisidagama, the former global manager for government contracts of Singapore-based defense contracting firm Glenn Defense Marine Asia, was sentenced to 63 months in prison and to pay $34.8 million in restitution for his participation in a fraud scheme that over-billed the U.S. Navy by more than $34 million for ship husbanding services.  To date, 10 individuals have been charged in connection with this scheme with nine pleading guilty so far including Commander Michael Vannak Khem Misiewicz, Captain Daniel Dusek, Naval Criminal Investigative Service Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug.  DOJ