Whistleblower Rewards

February 22, 2016

Pennsylvania-based importers Ameri-Source International Inc., Ameri-Source Specialty Products Inc., Ameri-Source Holdings Inc., their owners, Ajay Goel and Thomas Diener, and the related importer, SMC Machining LLC agreed to pay $3 million to resolve charges they violated the False Claims Act by engaging in a scheme to evade customs duties on imports of small-diameter graphite electrodes from China.  According to the government, Ameri-Source evaded antidumping duties on 15 shipments of the electrodes by misclassifying the size of the electrodes to avoid paying the duties, which do not apply to larger diameter graphite electrodes.  The allegations originated in a whistleblower lawsuit filed by Graphite Electrode Sales Inc. under the qui tam provisions of the False Claims Act.  The company will receive a whistleblower award of approximately $480,000 from the proceeds of the government’s recovery.  Whistleblower Insider

February 22, 2016

Government contractor Paige Industrial Services, Inc. agreed to pay between $450,000 and $675,000 to resolve allegations it violated the False Claims Act by submitting claims falsely certifying it had complied with the Davis-Bacon Act, which requires the payment of certain prevailing wages and fringe benefits to employees working under a government contract.  The work involved construction and maintenance services at the National Institute of Health campus in Bethesda, Maryland.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The unidentified whistleblower will receive a yet-to-be-determine whistleblower award from the proceeds of the government's recovery.  In a related parallel criminal proceeding, Luis Alonso Valle, owner of the Paige subcontractor construction company Valle Services, LLC., pleaded guilty to an illegal pattern and practice of hiring unauthorized aliens.  DOJ(MD)

February 19, 2016

Adventist Health System Sunbelt Healthcare Corporation agreed to pay $2.09 million to resolve allegations that patients were administered portions of single-dose vials of chemotherapy drugs that were left over from administrations to prior patients.  The settlement also resolves allegations that some platinum based drugs were administered inappropriately and that certain infusion services were upcoded.  The allegations originated in a whistleblower lawsuit filed by former Adventist employee Heather Huddleston under the qui tam provisions of the False Claims Act.  She will receive a whistleblower award of $376,452 from the proceeds of the government's recovery.  DOJ (MDFL)

February 17, 2016

Fifty-one hospitals in 15 states agreed to pay more than $23 million to settle charges of violating the False Claims Act by implanting cardiac devices in Medicare patients in violation of Medicare coverage requirements.  These settlements represent the final stage of a nationwide investigation into the practices of hundreds of hospitals improperly billing Medicare for these devices, which in total have yielded more than $280 million.  The allegations against most of the current settling hospitals originated in a whistleblower lawsuit brought under the qui tam provisions of the False Claims Act by Leatrice Ford Richards, a cardiac nurse and Thomas Schuhmann, a health care reimbursement consultant.  They will receive a whistleblower reward of more than $3.5 million from the proceeds of the government's recovery from these current settlements.  The settling hospitals and health care companies included Arkansas Heart Hospital (AK); Aurora Health Care (WI); Cleveland Clinic Foundation (OH); Dignity Health (CA); MGH Wind Down (MI); Monongalia County General Hospital (WV); Mount Sinai Medical Center (FL); Nacogdoches Memorial Hospital (TX); Northwell Health (NY); Sentara Healthcare (VA); and Sisters of Charity of Leavenworth Health System (CO).  DOJ

February 1, 2016

Florida-based military contractor Centerra Services International Inc. (formerly known as Wackenhut Services) agreed to pay $7.4 million to resolve allegations it violated the False Claims Act by double billing and inflating labor costs on its firefighting and fire protection services contract with the Army in Iraq.  According to the government, Wackenhut inflated its labor costs by billing the salaries of certain managers as direct costs when those salaries had already been charged as indirect costs.  The government further charged that Wackenhut artificially inflated its labor rate by counting its costs for holidays, vacation, sick leave, rest and recuperation and other variable labor costs twice in calculating the rate.  The allegations first arose in a whistleblower lawsuit filed by Gary W. Reno under the qui tam provisions of the False Claims Act.  He will receive a whistleblower award of $1,332,000 as his share from the government’s recovery.  Whistleblower Insider

January 29, 2016

Amalya Cherniavsky and her husband Vladislav Tcherniavsky, the former owner and former operator of California-based durable medical equipment supply company JC Medical Supply were sentenced  for their roles in a $1.5 million Medicare fraud scheme.  They were ordered to pay $614,418 in restitution and Tcherniavsky was ordered to serve 51 months in prison.  The evidence at trial demonstrated that they paid illegal kickbacks to patient recruiters in exchange for patient referrals and paid kickbacks to physicians for fraudulent prescriptions—primarily for expensive, medically unnecessary power wheelchairs—which the defendants then used to support fraudulent bills to Medicare.  DOJ

January 15, 2016

The SEC awards more than $700,000 to a whistleblower described as a “company outsider.”  The SEC says that the whistleblower provided a “detailed analysis” of the wrongdoing that lead to a successful SEC enforcement action.  SEC