Government Investigation

June 10, 2022

Steward Health Care System LLC and related entities will pay $4.7 million to resolve allegations of False Claims Act violations involving improper financial and referral arrangements between SHC and physician practices. Steward Good Samaritan Medical Center, Inc., contracted with Brockton Urology Clinic to administer a Prostate Cancer Center of Excellence at SGSMC. SGSMC paid BUC throughout the agreement as compensation for sending referrals to SGSMC. The investigation revealed other such arrangements between Steward and physician practices. The conduct was exposed by whistleblowers, who filed under the FCA’s qui tam provisions. The relators will receive 17% of the recovery. USAO MA

October 24, 2019

Engineering firm CH2M Hill will pay $6.4 million to resolve claims that it billed the U.S. Air Force for work done by personnel who did not meet educational and work experience requirements set forth in a contract between the parties for environmental consulting work.  The settlement arose following CH2M's 2017 disclosure of the overbilling and repayment of $10.5 million.  Following that payment, the Air Force contended that CH2M knew about the overpayment as early as 2011, but sought to conceal the result of its internal audit, claiming privilege.  USAO WD WA

March 22, 2017

DOJ discloses that it is investigating health insurance company Humana Inc., a defendant in Constantine Cannon’s whistleblower lawsuit alleging Medicare risk adjustment fraud.  Click here to read more.

December 19, 2016

New Jersey announced that the owner of an Essex County trucking company has been charged with bilking nearly $389,000 from his insurance carrier by providing false payroll information to obtain lower premiums on workers compensation coverage. Elvis Parra, owner of E&K Trucking, Inc. in Newark, was indicted Friday on second-degree charges of theft by deception and misconduct by a corporate official, third-degree insurance fraud, and fourth-degree workers compensation fraud in connection with the alleged scheme that cheated Liberty Mutual Insurance Company (“Liberty Mutual”) out of premiums. According to the indictment, Parra falsely represented that his trucking company employed only three drivers who were paid a total of $75,000 annually, when in reality he paid more than $2.9 million in annual wages to an additional 81 owner/operator drivers, according to prosecutors. NJ

December 16, 2016

The CFPB took action against Moneytree, Inc., a financial services company that offers payday loans and check-cashing services, for misleading consumers with deceptive online advertisements and collections letters, and making unauthorized electronic transfers from consumers’ bank accounts. The CFPB has ordered the company to cease its illegal conduct, provide $255,000 in refunds to consumers, and pay a civil penalty of $250,000.  CFPB

December 14, 2016

New York joined twelve other states, the District of Columbia, and the Federal Trade Commission in announcing a $17.5 million settlement with ruby Corp., which owns the dating website AshleyMadison.com. The settlement follows an investigation into the July 2015 hack of the website that resulted in the online publication of user information for millions of AshleyMadison.com members, including photographs, usernames, email addresses, communications, and other profile information. The settlement includes an immediate payment of $1,657,000 divided amongst the states and the Federal Trade Commission, of which New York will receive $81,330.94. The remainder of the $17.5 million payment is suspended based on ruby Corp.’s inability to pay. Up to 652,627 New York residents were members of Ashley Madison at the time of the security breach. NY

December 8, 2016

New York announced the settlement of a lawsuit against SG Hylan Motors Corp., a Staten Island dealership doing business as Staten Island Honda and Staten Island Nissan (collectively “SG Hylan”) and a separate settlement with Best Auto Outlet, Inc. (“Best Auto”) located in Floral Park. The SG Hylan settlement resolves a lawsuit filed by the Attorney General in July 2016, which alleged that these auto dealerships unlawfully sold “after-sale” products and services, including credit repair and identity theft protection services, to over 2,300 consumers, sometimes exceeding a cost of $2,000 per consumer. The settlement requires SG Hylan to pay $1.5 million in restitution to these consumers. The agreement with Best Auto, which returns $115,000 in restitution to consumers, concludes an investigation into this dealership for similar misconduct – alleged unlawful sale of credit repair and identity theft prevention services, and other “after-sale” items to over 200 consumers. NY

November 10, 2016

– New York announced that it has reached settlements resolving investigations into the National Vietnam Veterans Foundation, which also operated as the American Veteran Support Foundation (the “NVVF”), its former President and Founder, John Thomas Burch, Jr. (“Burch”), and its Vice President, David Kaufman (“Kaufman”). NVVF has operated nationwide since 1992 and began soliciting in New York in approximately 2008. By 2014, NVVF was collecting nearly $9 million nationwide from its fundraising campaigns, soliciting small dollar donations from the public through direct mail and phone calls — purportedly to help Vietnam Veterans. Nearly all of the money raised through its direct mail campaigns was instead used to pay its fundraisers. For example, in 2014, $7.7 million of the $8.6 million raised was used to pay NVVF’s fundraisers. The fraction that actually made it to NVVF was further reduced by a pattern of abuse, mismanagement and misspending by NVVF’s former President, Burch. NY