Government Programs Fraud

July 10, 2019

Overstock.com has been ordered by a Delaware court to pay $7.3 million following a jury verdict against it on claims that the online retailer misrepresented its disposition of abandoned gift card balances to Delaware's revenue agency in order to avoid obligations under the Delaware escheat law, which requires that Delaware-chartered companies turn over unclaimed assets to the state.  The case was brought by whistleblower William Sean French, a former employee of a gift card company, under the Delaware False Claims and Reporting Act. DEL (note: the trial court judgment was reversed by the Delaware Supreme Court in an opinion issued June 24, 2020)

June 19, 2019

Memphis Goodwill Industries has agreed to pay $150,000 for allegedly making false certifications to the federal government in order to qualify for contracts administered by the AbilityOne Commission, which helps create job opportunities for disabled individuals.  Federal regulations required AbilityOne contractors like Goodwill to employ disabled individuals for 75% of its direct labor hours and submit annual certifications attesting to that fact.  Despite submitting certifications attesting to the 75%, Goodwill was found to allegedly employ disabled individuals for far fewer hours.  USAO WDTN

June 18, 2019

A consultant in South Dakota who allegedly caused multiple states to submit up to five years of false quality control data to the USDA’s Supplemental Nutrition Assistance Program (SNAP) has agreed to pay $751,571 to resolve her liability under the False Claims Act.  Though funded by the federal government, SNAP relies on states to ensure that food stamp benefits are awarded correctly and error rates are accurately reported.  To incentivize lower error rates, the USDA reimburses states for certain quality control expenses and pays bonuses to states with the lowest and most improved error rates.  Julie Osnes was retained by multiple states to lower error rates but gave improper advice, causing the states to report false information and receive bonuses they were not entitled to.  Through settlements with three of the states—Alaska, Virginia, and Wisconsin—the federal government has recovered $17 million.  USAO EDWA