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Busy Week For False Claims Act Enforcement

Posted  May 24, 2024

It was a busy week for Department of Justice (DOJ) fraud enforcement with the agency resolving several False Claims Act matters covering a wide range of fraud and misconduct. The False Claims Act was enacted during the Civil War to go after war profiteers trying to defraud the Union Army with lame mules, empty munitions, and the like. It has since become the government’s primary fraud-fighting tool through which the government annually recovers billions of dollars of ill-gotten gains.   

This week’s scorecard shows the wide scope of misconduct that falls within the statute’s broad sweep.  Here’s a breakdown of the government’s multiple successes:

RiverSpring:  Yesterday (May 23), DOJ announced that long-term care provider RiverSpring Living agreed to pay roughly $10 million to settle False Claims Act charges of failing to provide or adequately document long-term care services it billed to New York Medicaid. According to U.S. Attorney Damian Williams, “RiverSpring collected millions of dollars in Medicaid payments to provide long-term care services as part of its managed care plan, but in many cases either failed to deliver these services or failed to maintain adequate documentation showing that it did so.” 

Prime Food: On Tuesday (May 21), DOJ announced that food suppliers Prime Food Sales, JTP Sales, and JW Sales agreed to pay $395,000 to settle False Claims Act charges of selling misleadingly labeled frozen ground beef patties to the Federal Bureau of Prisons. According to the government, to comply with the government contracts requiring the patties to be less than 6 months old upon delivery, the companies falsified the product labels to conceal that the patties were actually older and out of compliance (though product quality and safety apparently were unaffected).   

Rapha Healthcare:  On Tuesday (May 21), DOJ announced a consent judgment ordering Sharon Raynes Halliday and her practice, Rapha Healthcare Services, to pay $500,000 to settle False Claims Act and Controlled Substances Act charges of billing Medicare/Medicaid for unauthorized and invalid prescriptions for controlled substances. According to U.S. Attorney Sandra J. Hairston, “it is essential to the health and safety of all citizens that medical practitioners only write prescriptions for controlled substances when authorized and legitimate.” 

Deloitte:  On Monday (May 20), DOJ announced that Deloitte Consulting agreed to pay roughly $220,000 to settle claims it billed the Department of Health and Human Services for labor performed by personnel who did not possess the security clearances required by a government contract. It appears Deloitte disclosed the issue to the government for which the company received full credit under the Department of Justice’s guidelines for taking disclosure, cooperation, and remediation into account and thus allowing it to avoid False Claims Act liability. 


All this was in addition to several False Claims Act criminal proceedings this week, including the conviction of a Nevada doctor for defrauding Medicare/Medicaid by referring medically unnecessary prescriptions to a pharmacy in exchange for kickbacks; the guilty plea of a Texas woman for fraudulently receiving Coronavirus Aid, Relief, and Economic Security (CARES) Act unemployment benefits; and the indictment of a Brooklyn woman for scheming to submit fraudulent applications for loans under the Small Business Administration’s pandemic-relief Paycheck Protection Program. 

Not bad for a week’s worth of DOJ enforcement activity.  As usual, some of these matters originated with allegations by a whistleblower. The False Claims Act authorizes whistleblowers to bring lawsuits on behalf of the government for those committing fraud against the government. In return, whistleblowers are entitled to up to 30% of the government’s recovery. Whistleblowers have been responsible for originating the majority of False Claims Act cases and have received billions of dollars in whistleblower rewards over the past thirty years. 

If you think you might have information relating to potential fraud against the government, please do not hesitate to contact us and we will connect you with an experienced member of the Constantine Cannon whistleblower team for a free and confidential consult. Who knows, you might be responsible for the next big False Claims Act enforcement win!