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Caught in the Crosshairs - Loyal Source Government Services

Posted  December 1, 2023

As reported in the Washington Post yesterday (November 30), a long-serving Customs and Border Protection (CBP) official filed a whistleblower complaint with Congress claiming significant failures by medical service contractor Loyal Source Government Services and CBP’s refusal to address them.  Even worse, when the whistleblower — 14-year CBP veteran Troy Hendrickson — tried to raise his concerns with his CBP supervisors, they shut him down and removed him from his position as the Contract Officer Representative for the Loyal Source contract.

Hendrickson’s lawyers from the Government Accountability Project laid this all out in a 20-page letter to Congressional leaders of the Homeland Security and Judiciary committees.  They specifically called out “substantial and specific danger to public health and safety” and “ongoing performance failures, including . . . severe understaffing by nearly 40% of medical staff needed to provide adequate care . . .; medical providers working without proper clearances and/or medical licenses; . . . and allegations of sexual misconduct.”

Loyal Source is the sole source contractor responsible for providing medical care and screening for the thousands of migrants CBP takes into custody daily along the US-Mexico border, many of whom arrive sick or injured from their crossings.  But Hendrickson’s charges were equally targeted at CBP’s Office of Acquisition (OA), which according to Hendrickson, refused to hold Loyal Source accountable or take any steps to address its alleged wrongdoing.  The agency went after Hendrickson instead by punishing him for raising his concerns.

Hendrickson and his lawyers highlighted the following three areas of wrongdoing on the part of Loyal Source and CBP:

  • “Serious failures by Loyal Source Government Services to comply with the terms of its $421 million Medical Services Contract to provide medical care to noncitizens at the southern US border, with shocking deficiencies both in the administration of the contract and the provision of medical care.”
  • “Refusal by the Office of Acquisition to exercise its responsibility to hold Loyal Source accountable despite the Office of the Chief Medical Officer (OCMO)’s documented reports and expressed concern about the contractor’s serious performance deficiencies.”
  • “Unlawful retaliation against [Hendrickson] for raising concerns about problems with the contractor’s performance and the failure by OA to exercise its oversight responsibility.”

What has brought particular attention to Hendrickson’s charges is that last May — roughly a year after CBP removed him from his position — Anadith Reyes Alvarez died in a CBP facility.  According to Hendrickson, the 8-year old died despite her mother’s repeated pleas to Loyal Source for medical care.  Hendrickson believes that if CBP had addressed his concerns in 2021 or 2022, she might still be alive.  He warns “that unless both the performance problems of Loyal Source and the failure by CBP to hold the contractor accountable are addressed, future tragedies to noncitizens in CBP custody are foreseeable.”

Making these issues of even more immediate concern is that the scope of Loyal Source’s CBP work may soon be extended as the company is a finalist for a new five-year, $1.5 billion CBP contract, one of the largest contracts in the agency’s history.  According to three CBP officials who spoke to the Washington Post on the condition of anonymity, the CBP contracting office kept Loyal Source in the running after overruling the recommendations of a CBP advisory board that did not believe the company should qualify.

It remains to be seen how CBP and Loyal Source will respond to Hendrickson’s charges, but at the very least, key members of Congress are taking them seriously.  Senate Judiciary Chair Dick Durbin (D-Illinois) issued a statement yesterday immediately responding to Hendrickson’s allegations, stating they “raise serious concerns” and pledging to investigate and “take further steps as needed to better protect migrants in government custody.”

Another possible route to expose Loyal Source’s alleged transgressions might have been the False Claims Act, which allows private parties to bring lawsuit on behalf of the government against those committing fraud against the government.  The statute was enacted during the Civil War to go after war profiteers defrauding the Union Army with lame mules and empty munitions.  While these days it is most often used to go after healthcare fraud, it also is often used to go after government contract fraud, where contractors overcharge for their work or fail to provide the services the government pays them to perform.

Whistleblowers who file cases under the statute are entitled to a hefty slice (up to 30%) of any government recovery.  Even more importantly for many whistleblowers, the filing of a False Claims Act case prompts the Department of Justice (DOJ) to formally investigate the alleged misconduct.  It is a powerful tool for whistleblowers looking to have the government investigate serious charges of wrongdoing.  There is no absolute bar to government employees bringing False Claims Act cases, but there are complexities and potential conflicts of interest that complicate whether it is the proper path for whistleblowers like Hendrickson.

Another complicating factor for whistleblowers under the False Claims Act, especially for those like Hendrickson seeking immediate action and attention, is that the allegations must be kept under seal while DOJ investigates.  This typically takes at least a year, and often much longer.  The whistleblower may not reach out to Congress or the press, or anyone outside DOJ during this seal period, which is why many whistleblowers choose to go directly to Congress or the press instead.

Whichever path is taken, as Hendrickson has clearly shown with his courageous stand against Loyal Source and CBP, whistleblowers serve a critical role in exposing fraud and misconduct that might otherwise remain undetected.  Hopefully, Loyal Source and CBP will take whatever steps are necessary to address the issues Hendrickson has put forward.

If you have information of potential fraud or wrongdoing by government contractors and would like to know more about your whistleblower options, please contact us so we can connect you with an experienced member of our whistleblower lawyer team for a free and confidential consult.

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Tagged in: Healthcare Fraud, Retaliation, Whistleblower Case,