FCA State

January 10, 2018

Dental management company Benevis LLC (formerly known as NCDR LLC), and more than 130 of its affiliated Kool Smiles dental clinics for which Benevis provides business management and administrative services, agreed to pay $23.9 million to settle allegations of violating the False Claims Act by submitting false claims for payment to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid.  According to the government, Benevis and Kool Smiles clinics located throughout 17 states submitted false claims to state Medicaid programs for medically unnecessary pulpotomies (baby root canals), tooth extractions, and stainless steel crowns, in addition to seeking payment for pulpotomies that were never performed.  The government further alleged that Kool Smiles clinics routinely pressured and incentivized dentists to meet production goals through a system that disciplined “unproductive” dentists and awarded “productive” dentists with substantial cash bonuses based on the revenue generated by the procedures they performed.  The allegations originated in five whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.  Three of the whistleblowers -- former Kool Smiles employees Adam Abendano, Poonam Rai, and Robin Fitzgerald -- will receive a whistleblower award of more than $2.4 million from the proceeds of the government's recovery. DOJ

January 11, 2018

California announced a $102 million settlement with BP Energy Company and affiliates (BP) over allegations that it intentionally overcharged the State of California for natural gas that the State purchased under three successive contracts from March 2003 to August 2012. The contracts allowed the California Department of General Services, which buys natural gas for numerous state agencies and political subdivisions, to cap the price it would pay BP for specific volumes of gas. BP regularly quoted and charged the State of California prices that violated this cap and concealed its overpricing by providing false and misleading information. These acts constitute violations of the California False Claims Act. CA

August 18, 2017

Godwin Oriakhi, the owner of five Houston-area home health agencies, was sentenced to 480 months in prison for conspiring to defraud Medicare and the State of Texas’ Medicaid-funded Home and Community-Based Service (HCBS) and Primary Home Care (PHC) Programs of more than $17 million.  The HCBS and PHC Programs provided qualified individuals with in-home attendant and community-based services that are known commonly as “provider attendant services.” (PAS).  This case marks the largest PAS fraud case charged in Texas history. DOJ

November 17th, 2017

New York announced the indictment of Hin T. Wong ("Wong"), 49, of Manhattan, Mery Gooden, 58, of the Bronx, and three pharmacies. The indictment charges Wong, the owner of three Manhattan pharmacies – New York Pharmacy Inc. ("NY Pharmacy"), NYC Pharmacy Inc. ("NYC Pharmacy"), and New York Healthfirst Pharmacy Inc. ("NY Healthfirst") – for defrauding several government-funded healthcare programs, including Medicaid and Medicare, by falsely billing prescription refills and stealing over $3 million in reimbursement for medication they did not dispense. Wong was indicted for Grand Larceny in the First Degree, a class "B" felony, and other crimes. In addition, Mery Gooden, a pharmacist at NYC Pharmacy, was indicted for Grand Larceny in the Second Degree and other related crimes. NY

September 22, 2017

Illinois announced a $4.5 million settlement to resolve a lawsuit under the Illinois False Claims Act against 13 Chicago-area gas stations and two gas station owners for sales tax fraud. The lawsuit alleged that since 2002, defendants submitted false monthly sales tax returns to the Illinois Department of Revenue, resulting in millions of dollars of lost tax revenue to the state. The lawsuit alleged defendants operated the scheme by underreporting general merchandise sales and using inaccurate sales tax reporting rates. Ten of the gas stations are currently in operation and are owned by George Nediyakalayil, and Tito Kandarapallil co-owns one of the gas stations with Nediyakalayil. IL

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

August 4, 2017

Georgia announced a civil settlement with The Medical Center of Central Georgia, Inc., more commonly known as The Medical Center, Navicent Health (Navicent). Navicent agreed to pay to the United States and the State of Georgia $2,549,742 to resolve allegations that it violated the False Claims Act and the Georgia False Medicaid Claims Act by submitting bills for ambulance transports that were either inflated or medically unnecessary. Additionally, Navicent’s current Corporate Integrity Agreement (CIA) will be heightened and extended to cover the newly resolved conduct. A CIA is an agreement between a private provider of services and the United States whereby the provider, at its own expense, institutes and maintains a program, overseen by the OIG with reviews by an independent review organization, to insure compliance with the laws and regulations regarding participation in federally funded programs. GA

July 26, 2017

Washington recovered nearly $750,000 in Medicaid reimbursement this week from pharmaceutical company Celgene Corporation for promoting medications to treat conditions they were not approved for, including certain types of cancer. The company is also accused of paying kickbacks to doctors for prescribing the medications and helping them change billing codes to ensure Medicaid would pay for their use. Off-label marketing, fraudulent billing and providing kickbacks to doctors are all violations of the Medicaid False Claims Act. WA