August 29, 2017

Two Bay Area Companies for Developmentally Disabled Settle Whistleblower Charges of Overbilling

By the C|C Whistleblower Lawyer Team

Two Bay Area companies and their owners agreed to pay roughly $2 million to settle charges they violated the False Claims Act by overbilling the government in a program designed to serve Californians with developmental disabilities. The government, and the whistleblower who originated the action — Beverly McCaffery — alleged that Alternative Learning Center, its president Alice Soard, Adult Educational Technologies Inc., and its executive director Wendell James defrauded California’s Department of Developmental Services (DDS) by billing for services never provided. See DOJ Press Release.

DDS runs programs for developmentally disabled individuals to live in the community rather than being institutionalized. Alternative Learning Center and Adult Educational Technologies subcontract under the program to provide in-home support for these individuals, including personal care and homemaking. According to the government, these organizations submitted claims under the program for services never performed, retained overpayments to which they knew they were not entitled, and intentionally falsified documents to conceal their transgressions.

In announcing the settlement, the government did not mince words in condemning the alleged misconduct. According to US Attorney Phillip Talbert, “[t]hese defendants took advantage of a government program designed to help some of our most vulnerable citizens, diverting funds over a number of years that may have been used to provide services to others in need.” HHS Special Agent Steven J. Ryan was even harsher in his tone, referring to the conduct as “reprehensible” and “repulsive” and “which cheat both patients and taxpayers.”

The allegations originated in a whistleblower lawsuit filed by Ms. McCaffery under the qui tam provisions of the False Claims Act. She will receive a yet-to-be-determine whistleblower award from the proceeds of the government’s recovery.

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