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DOJ Has Banner Week In False Claims Act And Other Fraud Recoveries

Posted  January 17, 2017

By the C|C Whistleblower Lawyer Team

Ushering in the New Year with a bang, the Department of Justice last week had what may be its biggest week ever in terms of the number and size of recoveries under the False Claims Act and other fraud statutes. Indeed, in the last three days of the week alone, the agency secured roughly $ 6.6 billion from ten different settlements. Perhaps this highly concentrated string of enforcement successes is simply the Obama Administration getting in its last licks before the Trump team takes over. Or maybe it is a sign of things to come with Trump taking as vigorous a stand against fraud as his feisty predecessor. Only time will tell which way the enforcement winds will blow. In the meantime, here is a breakdown of this latest regulatory onslaught:


Moody’s Corp. agreed to pay $864 million to resolve allegations arising from Moody’s role in providing credit ratings for Residential Mortgage-Backed Securities and Collateralized Debt Obligations. DOJ

Chilean chemicals and mining company Sociedad Química y Minera de Chile agreed to pay a criminal penalty of more than $15 million in connection with payments to politically-connected individuals in Chile in violation of the Foreign Corrupt Practices Act. The company also agreed to pay $15 million to settle related SEC charges for a total payout of $30 million. DOJ

Massachusetts-based ambulance company Medstar Ambulance Inc. agreed to pay $12.7 million to resolve allegations it violated the False Claims Act by submitting false claims to Medicare for ambulance transport services. DOJ


Japan’s Takata Corp is expected to plead guilty to criminal wrongdoing as part of a $1 billion settlement over its handling of air bag ruptures linked to 16 deaths worldwide. Reuters

Baxter International Inc. agreed to pay roughly $18 million to settle charges of violating the False Claims Act arising from the company’s failure to follow current Good Manufacturing Practices when manufacturing sterile drug products in North Carolina. DOJ

Indiana-based manufacturer of orthopedic and dental implant devices Zimmer Biomet Holdings Inc. agreed to pay a $17.4 million criminal penalty in connection with a scheme to pay bribes to government officials in Mexico and for violations of the internal controls provisions of the Foreign Corrupt Practices Act involving the company’s operations in Mexico and Brazil. The company agreed to pay an additional $13 million in penalties and disgorgement to settle related SEC charges for a total payout of more than $30 million. DOJ

Connecticut home healthcare provider Family Care Visiting Nurse and Home Care Agency, LLC agreed to pay roughly $5.25 million to resolve allegations it violated the False Claims Act by billing for services which under Medicaid required a registered nurse when in fact a registered nurse did not provide the services. DOJ (DCT)

The Confederated Tribes of the Colville Reservation agreed to pay roughly $246,000 to settle charges it violated the False Claims Act by submitting false claims to Medicaid seeking the reimbursement of mental health counseling services either not provided or not medically necessary. DOJ (EDWA)


Volkswagen AG agreed to plead guilty to three criminal felony counts and pay a $2.8 billion criminal penalty as a result of the company’s long-running scheme to sell approximately 590,000 diesel vehicles in the U.S. by using a defeat device to cheat on emissions tests mandated by the Environmental Protection Agency and California Air Resources Board, and lying and obstructing justice to further the scheme. In separate civil resolutions of environmental, customs and financial claims, VW also agreed to pay $1.5 billion for a total payout of $4.3 billion in criminal and civil penalties. DOJ

Ireland-based Shire Pharmaceuticals LLC agreed to pay $350 million to settle charges that Shire and the company it acquired in 2011, Advanced BioHealing, violated the False Claims Act and Anti-Kickback Statute by using kickbacks and other unlawful methods to induce clinics and physicians to use or overuse their “Dermagraft” skin product. Whistleblower Insider