FCA Federal

November 1, 2023

XTO Energy Inc. has agreed to pay $16 million to resolve allegations of violating the False Claims Act.  In exchange for producing natural gas on federal and Native American lands, XTO was supposed to put the gas in marketable condition and pay royalties on the value of the gas produced.  However, over an 8 year period, XTO improperly deducted the costs of transporting carbon dioxide.  With this settlement, the Department of Interior has now recovered $25 million from energy companies who similarly withheld required royalties from the government.  DOJ

October 30, 2023

Nostrum Laboratories Inc. and its founder, Nirmal Mulye, Ph.D., have agreed to pay up to $50 million, with a minimum of $3.8 million, to resolve allegations of defrauding Medicaid in connection with one of their drugs.  As part of the settlement, Nostrum and Mulye admitted that they knowingly failed to pay required drug rebates to Medicaid, in violation of the False Claims Act, despite being notified by CMS that they should do so.  DOJ

October 24, 2023

AECOM, an architecture and engineering firm in Texas, has agreed to pay $11.8 million to resolve allegations of defrauding FEMA and violating the False Claims Act in connection with efforts to rebuild educational facilities damaged by Hurricane Katrina.  While serving as a technical assistance contractor for FEMA, AECOM allegedly helped applicants submit fraudulent requests for disaster assistance funds, resulting in some applicants receiving funds in excess of what was permitted.  The misconduct was revealed by whistleblower Robert Romero, who will receive a relator’s share of $2.4 million as part of the settlement.  DOJ

October 18, 2023

The president of a California-based medical technology company has been sentenced to 8 years in prison and ordered to pay $24 million in restitution in the first COVID-related criminal securities fraud case charged by DOJ and the first COVID-related criminal healthcare fraud case brought to trial.  Among many things, Mark Schena of Arrayit Corporation was found to have taken advantage of the pandemic by claiming he and his company had developed a technology to test for just about any disease, including COVID, using a single drop of blood.  In doing so, Schena and Arrayit lied to investors to give them a false sense of credibility, paid illegal kickbacks to marketers to run deceptive plans about the accuracy of its tests, and submitted false claims to Medicare and private insurers for medically unnecessary allergy testing.  DOJ

October 11, 2023

Automotive management company Victory Automotive Group Inc. (VAG) has agreed to pay $9 million for allegedly providing false information on a Paycheck Protection Program (PPP) loan forgiveness application.  In order to be eligible for a PPP loan under the Coronavirus Aid, Relief and Economic Security (CARES) Act, VAG allegedly falsely certified that it was a small business with fewer than 500 employees, when in fact it and its affiliates cumulatively had over 3,000 employees across the country.  The misconduct was reported by a whistleblower in a qui tam suit; the whistleblower will receive a relator’s share of about $1.63 million.  DOJ

October 10, 2023

Mobile cardiac PET scan provider Cardiac Imaging Inc. (CII), and its founder and owner Sam Kancherlapalli, have agreed to pay over $75 million and over $10 million, respectively, to resolve a qui tam case by former billing manager Lynda Pinto, which alleged the company, Kancherlapalli, and part-owner Richard Nassenstein defrauded Medicare.  In violation of the Anti-Kickback Statute, Stark Law, and False Claims Act, CII and Kancherlapalli allegedly paid kickbacks to referring cardiologists in the form of fees, ostensibly for supervising PET scans, that were far above fair market value.  The alleged misconduct occurred over a ten year period.  DOJ

October 2, 2023

Stanford University has agreed to pay nearly $2 million to resolve allegations of violating the False Claims Act in connection with 16 research grant proposals submitted to the Departments of the Army, Navy and Air Force, NASA, and the National Science Foundation (NSF).  According to the government, Stanford failed to disclose foreign funding that had been received or was expected to be received between 2015 and 2020.  DOJ