Archive for October, 2014

North Florida Shipyards and Matt Self to Pay $1 Million to Resolve False Claims Allegations

North Florida Shipyards and its president, Matt Self, will pay the United States $1 million to resolve allegations that they violated the False Claims Act by creating a front company, Ind-Mar Services Inc., in order to be awarded Coast Guard contracts that were designated for Service Disabled Veteran Owned Small Businesses (SDVOSBs), the Justice Department announced today.  North Florida Shipyards has facilities in Jacksonville, Florida.

“Those who expect to do business with the government must do so fairly and honestly,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “We will not tolerate contractors who seek to profit at the expense of our veterans and taxpayers.”

To qualify as a SDVOSB on Coast Guard ship repair contracts, a company must be operated and managed by service disabled veterans and must perform at least 51 percent of the labor.  The government alleged that North Florida created Ind-Mar merely as a contracting vehicle and that North Florida performed all the work and received all the profits.  The government further alleged that if the Coast Guard and the Small Business Administration (SBA) had known that Ind-Mar was nothing but a front company, the Coast Guard would not have awarded it contracts to repair five ships.

In December 2013, the SBA suspended North Florida, Matt Self, Ind-Mar and three others from all government contracting.  In April 2014, North Florida and Matt Self entered into an administrative agreement with the SBA in which they admitted to having created and operated Ind-Mar in violation of its Coast Guard contracts and SBA statutes and regulations.

“Special programs to assist service disabled veterans are an important part of the SBA’s business development initiative,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida.  “False claims such as this undermine the integrity of this vital program and, where found, will be vigorously pursued by our Office.”

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Biomet Companies to Pay Over $6 Million to Resolve False Claims Act Allegations Concerning Bone Growth Stimulators

EBI LLC, doing business as Biomet Spine and Bone Healing Technologies and Biomet Inc. have agreed to pay $6.07 million to resolve allegations that EBI violated the False Claims Act by paying kickbacks to induce use of its bone growth stimulators and billing federal health care programs for refurbished stimulators, the Department of Justice announced today.  EBI is a medical device company located in Parsippany, New Jersey, that sells bone growth stimulators, which are used to repair fractures that are slow to heal.  It is a subsidiary of Biomet, which is based in Warsaw, Indiana.

“Medical device companies must not use improper financial incentives to influence the decision to use their products,” said Acting Deputy Assistant Attorney General August Flentje of the Justice Department’s Civil Division.  “This settlement demonstrates the department’s commitment to protect patients, and the taxpayers who fund their care, by ensuring that medical decisions are based on the patients’ medical needs rather than the financial interests of others.”

The United States alleged that, from 2001 to 2008, EBI paid staff at doctors’ offices to influence doctors to order its bone growth stimulators.  These payments were allegedly provided pursuant to personal service agreements with staff members. The United States concluded that these payments violated the Anti-Kickback Act and resulted in false billings to various federal health care programs, including Medicare.  The settlement also resolves EBI’s disclosure that it received federal reimbursements for bone growth stimulators that had been refurbished.

“This settlement demonstrates our resolve in ensuring that patients receive, and the government pays for, health care that is based on sound medical judgment, and not compromised by kickbacks,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts.

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Satyabrata Chatterjee and Ashwini Anand,Kentucky Cardiologists Agree to Pay $380,000 to Settle False Claims Act Based on Illegal Referrals

The Department of Justice announced today that two cardiologists based in London, Kentucky, have agreed to pay $380,000 to resolve allegations that they violated the False Claims Act by entering into sham management agreements with Saint Joseph Hospital, also based in London, Kentucky, in exchange for the referral of cardiology procedures and other healthcare services to Saint Joseph.

“Physicians who place their financial interests above the well-being of their patients will be held accountable,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division.  “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public healthcare programs.”

Satyabrata Chatterjee and Ashwini Anand jointly owned Cumberland Clinic, a physician group that provided cardiology services.  The government alleged that St. Joseph Hospital entered into sham agreements with Chatterjee and Anand, under which the physicians were paid to provide management services but did not in fact do so.  The government further alleged that, in exchange for the sham agreements, Chatterjee and Anand agreed to enter into an exclusive agreement with St. Joseph to refer Cumberland Clinic patients to the hospital for cardiology and other services in violation of the Stark Law and the Anti-Kickback Statute.  The Stark Law forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the entity.  The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare.

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Whistleblowing Without the False Claims Act: The Case of the Ebola Whistleblower

Ebola-Virus-Pictures-4Many of our clients who come forward to file a case under the False Claims Act are motivated by a common desire: to right a wrong. While some people think of corporate fraud as a victimless crime, whistleblowers know it is not. They realize that every business decision impacts a human life – that behind every decision to use a lower-cost, substandard component to build a grenade is a soldier whose life is going to depend on the grenade exploding when needed, that behind every misbranded medication is a child whose life may be forever altered by unknown side-effects, that behind every false promise of higher education is a student crippled by debt.

While the False Claims Act can be used to expose and correct certain wrongs, not all “wrongs” necessarily results in the submission of false claims.  Some wrongs, however, are still so egregious that a whistleblower is willing to come forward and expose the issues in the name of public safety and justice.

Such is the case of Brianna Aguirre, a nurse at Texas Presbyterian Hospital in Dallas, Texas, where Ebola victim Thomas Eric Duncan was treated and where two other nurses have since contracted Ebola after treating Duncan. Last week, Aguirre came forward to expose what she says are substandard protocols to prevent the transmission of Ebola by hospital and CDC employees. Among other issues, Aguirre says that the hospital failed to dispose of the massive medical waste caused by treating an Ebola patient, and CDC officials were in isolation areas with no covering garbs so germs were potentially transmitted to “clean” areas on their clothes or shoes.

After nurses Nina Pham and Amber Vinson contracted Ebola, Aguirre was upset to hear that the nurses were being blamed by the media. The nurses did what they were told, Aguirre has publicly stated, but the hospital and CDC failed them.

It remains to be seen why there were so many errors or oversights, which resulted in Pham and Vinson contracting Ebola. Was it simply a result of a lack of preparation and planning, or was there a cost-benefit analysis conducted at some level, which deemed it too expensive to have all of the necessary protocols in place to prevent disease transmission?

Whatever the cause, Aguirre clearly felt that the only way to right this wrong – to stop the blame being placed on the nurses and expose the internal flaws which led to their illnesses – was to publicly blow the whistle and call for changes. Yet, it still remains to be seen whether she will be lauded as a hero for breaking the silence in hopes of getting a better system in place, or whether she will face retaliation for speaking out of turn at the hospital’s and CDC’s expense.

There are some state-level whistleblower laws that may protect someone like Aguirre from retaliation, but they are not nearly as strong as the protections associated with the False Claims Act. In Texas, for example, the Texas Whistleblower Act (Tex. Code 554.001) protects only public employees who report certain violations by a governmental agency or another public employee to the appropriate law enforcement authority. There are additional protections for very specific situations such as registered nurses reporting incidence of poor nursing to the State Board of Nurse Examiners or physicians reporting the misconduct of another physician to the State Board of Medical Examiners. But, by and large, Texas whistleblowers may not be protected if they are retaliated against for their efforts.

Some states, like Florida, have more comprehensive whistleblower laws (Fla. Stat. § 112.3187) that protect private citizens in addition to public employees. However, Florida whistleblowers must meet several exacting requirements prior to claiming protection under the law, including providing written notice to the employer about the fraudulent activity, and giving the employer the opportunity to correct the wrong.  Each state is different and requires a careful analysis of the law to determine if a whistleblower has any protection under state laws.

Whistleblowers come from all different backgrounds, with different experiences, which lead to their desire to right wrongs. Many times, the fraud involves false claims made to the Government so a law firm specializing in the False Claims Act can help a whistleblower file a qui tam case to expose the fraud. Other times, whistleblowers must seek alternative ways to blow the whistle. These people deserve as much praise and protection as is afforded to False Claims Act whistleblowers for attempting to make the world a safer place.

To contact James Hoyer about a suspected False Claims Act violation, or if you are being retaliated against as a whistleblower, please contact us here or call us toll-free at 1-800-651-2502.


Operators of Houston Area Diagnostic Centers Agree to Pay $2.6 Million to Settle Alleged False Claims Act Violations

Two groups of Houston-based diagnostic centers have agreed to pay the United States a total of more than $2.6 million to settle allegations that they violated the False Claims Act, announced Acting Assistant Attorney General Joyce R. Branda for the Department of Justice’s Civil Division and U.S. Attorney Kenneth Magidson for the Southern District of Texas.  The settlements were finalized without an admission of liability and without commencement of litigation.

One group of centers, which operates under the name One Step Diagnostic and is owned and controlled by Fuad Rehman Cochinwala, has agreed to pay $1.2 million.  The payment is being made to settle allegations that it violated the Stark Statute and the False Claims Act by entering into sham consulting and medical director agreements with physicians who referred patients to One Step Diagnostic Centers.

The other group of centers, which is owned and controlled by Rahul Dhawan, has agreed to pay $1,457,686.  This group consists of Complete Imaging Solutions LLC doing business as Houston Diagnostics, Deerbrook Diagnostics & Imaging Center LLC, Elite Diagnostic Inc., Galleria MRI & Diagnostic LLC, Spring Imaging Center Inc. and West Houston MRI & Diagnostics LLC.  The United States alleged that these centers engaged in improper financial relationships with referring physicians and improperly billed Medicare using the provider number of a physician who had not authorized them to do so and had not been involved in the provision of the services being billed.

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James Hoyer Media Team Members Nominated for Emmys

James Hoyer Media Team

James Hoyer Media Team – Angie Moreschi and Larry Wiezycki

Congratulations to our media team members Angie Moreschi and Larry Wiezycki.  Both have been nominated for Emmys in the 38th annual Suncoast Emmy Awards.

Larry’s nomination is for his work on the highly acclaimed PBS documentary JFK in Tampa: The 50th Anniversary.  Angie received two nominations for her Consumer Wise reports on Bay News 9 in Tampa and Central Florida News 13 in Orlando, one for Consumer/Business Reporting and the second for On-Camera Talent.

Angie is the Communications Director and Investigative Producer here at James Hoyer,  and Larry is our Creative Director. Together they produce the powerful documentaries the firm shares with the government and media to help educate them on our whistleblower cases.  They are a great team, and we are proud to have their talents as one of our assets here at the James Hoyer law firm.  Congratulations and good luck!


Felicar Williams, a Detroit-Area Operator of Adult Day Care Center, and Two Home Health Care Company Owners Convicted in $29 M Medicare Fraud

A federal jury in Detroit late yesterday convicted the operator of an adult day care center and two individuals who owned and operated a network of home health care companies for their participation in a $29 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Detroit Office and Special Agent in Charge Jarod Koopman of the Internal Revenue Service – Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.

According to evidence presented at trial, Felicar Williams, 51, of Dearborn, Michigan, operated Haven Adult Day Care Center LLC (Haven), which purported to provide adult day care services for patients suffering from mental health disorders such as schizophrenia and dementia.  At Williams’s direction, Haven billed Medicare for sophisticated mental health services purportedly provided by other, unlicensed staff members.

Evidence at trial also established that Abdul Malik Al-Jumail, 54, and his daughter, Jamella Al-Jumail, 25, both of Brownstown, Michigan, owned and operated a series of fraudulent home health care companies, including ABC Home Care Inc., Associates in Home Care Inc., Accessible Home Care Inc., Swift Home Care LLC, and Be Well Home Care LLC.  The companies billed Medicare for home health services that were not needed or not provided.  At the instruction of both Abdul Malik Al-Jumail and Jamella Al-Jumail, employees of the home health companies fabricated patient medical records to make it appear that the services were needed and provided.

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