Archive for 2014

DOJ Releases FY2014 Statistics, Record False Claims Act Recoveries

On the heels of the SEC’s recent report of its whistleblower statistics, the Department of Justice released statistics detailing the staggering False Claims Act recoveries in FY2014.  In the fiscal year ending September 30, 2014, the United States obtained a record $5.69 billion in settlements and judgments from civil cases involving false or fraudulent claims against the government.  This brings the five year total since January 2009 to $22.75 billion – more than half the recoveries since the inception of the modern False Claims Act in 1986.

Acting Assistant Attorney General Joyce Branda – in the role she took over when Stuart Delery became the Acting Associate Attorney General in September 2014 – said, “It has been an extraordinary year for civil fraud recoveries … The False Claims Act was enacted to both protect vital taxpayer dollars and deter those who would misuse public funds.  The department will continue to enforce the law aggressively to ensure the integrity of government programs designed to keep us safer, healthier and economically more prosperous.”

The number of False Claims Act qui tam suits initiated by whistleblowers exceeded 700 for the second year in a row.  In FY2014, qui tam cases accounted for nearly $3 billion, with whistleblowers receiving $435 million as relator’s share awards.

The Department of Justice’s report details specific recoveries from the housing and mortgage fraud arena, which totaled $3.1 billion from various banks and financial institutions, and from the health care fraud area, which totaled $2.3 billion.  Notably, FY2014 was the fifth straight year that the Department of Justice has recovered more than $2 billion from healthcare related cases.  The Department of Justice’s report also identifies the $85 million recovery from Halifax Hospital Medical Center, in which James Hoyer acted as local counsel for relator Elin Baklid-Kunz.

Finally, the Department of Justice’s press release specifically recognizes the invaluable efforts of False Claims Act whistleblowers.  The report acknowledges that the growing number of qui tam lawsuits has led to increased recoveries.  Branda commented, “We acknowledge the men and women who have come forward to blow the whistle on those who would commit fraud on our government programs.  In strengthening and protecting the False Claims Act, Congress has given us the law enforcement tools that are so essential to guarding the treasure and deterring others from exploiting and misusing taxpayer dollars.  We are grateful for their continued support.”

For the Department of Justice’s full press release, click here.

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.


DOJ Announces Record Recovery for False Claims Act in 2014

The Department of Justice announced today it recovered nearly $6 Billion from False Claims Act Cases in Fiscal Year 2014.  It is the first annual recovery to exceed $5 Billion.  More than 700 Whistleblower Lawsuits were filed for second consecutive year.
Noted in the DOJ news release:
“It has been an extraordinary year for civil fraud recoveries, but the true significance is not in breaking records or making history; it is in the billions of dollars restored to the federal treasury,” said Acting Assistant Attorney General Branda.  “The False Claims Act was enacted both to protect vital taxpayer dollars and deter those who would misuse public funds.  The department will continue to enforce the law aggressively to ensure the integrity of government programs designed to keep us safer, healthier and economically more prosperous.”
Click here to read the entire DOJ news release.

SEC Annual Report Highlights More Awards, Increase in Whistleblower Tips

Photo Credit: SEC

Photo Credit: SEC

The Securities and Exchange Commission, Office of the Whistleblower released its 2014 Annual Report to Congress on the Dodd-Frank Whistleblower Program.

According to the report, the SEC issued more whistleblower rewards in Fiscal Year 2014 than every previous year combined.  Recently, the SEC authorized an award of more than $30 million to a whistleblower “who provided key original information” regarding “an ongoing fraud that otherwise would have been very difficult to detect.” This award is the largest made by the SEC’s whistleblower program to date.  It also marked the fourth award to a whistleblower living in a foreign country, “demonstrating the program’s international reach.”  In total, the SEC issued fourteen (14) awards in FY2014. This year also saw other notable developments for whistleblowers, including a significant increase in the number of whistleblower tips and the first anti-retaliation award in the program’s history.

Our firm has significant experience representing whistleblowers who have filed tips with the SEC Office of the Whistleblower.  If you have knowledge of a violation of federal securities laws or regulations and are considering filing a complaint with the SEC, please contact James Hoyer for an evaluation of your claims.  Click here for more information about the firm and to submit your information electronically, or you may contact our office at 800-651-2502.


Founding Partner Chris Hoyer Interviewed about Grand Juries


Al Tompkins – Poynter Institute

As the country awaits the grand jury decision in Ferguson, Missouri on whether to indict Officer Darren Wilson in the shooting death of teenager Michael Brown, the question of what exactly a grand jury does is of prime interest. Al Tompkins, a Senior Faculty Member at the Poynter Institute and a leading authority on journalism worldwide, tackled the topic in a column for Poynter.

Tompkins interviewed James Hoyer Founding Partner Chris Hoyer to get his insights as a former federal and state prosecutor.  Here is an excerpt:

Grand jury sessions are far less formal than open court sessions partly because there is no judge inside the grand jury room. The prosecutor for that jurisdiction is usually present and guides the grand jury through the law and the gathering of evidence. Still, grand juries can hear whomever they want and ask lots of questions.

Chris Hoyer, who was a federal prosecutor for 10 years and state prosecutor in Tampa, Florida, for eight years says grand jury rooms feel a lot like a classroom. “There are lots of questions, a lot of conversation, lots of participation,” he said. Often, he says, an investigator from the prosecutor’s office will come to the grand jury with a thick file of evidence. “The case agent summarizes what police have found, what witnesses said and what tests have been done.” In open court, each person who did that work would have to personally testify as to what they discovered but in a grand jury hearsay evidence is allowed.

Click here to read the entire column on the Poynter Institute website.


Careall Companies Agree to Pay $25 Million to Settle False Claims Act Allegations

CareAll Management LLC and its affiliated entities (collectively “CareAll”) have agreed to pay $25 million, plus interest, to the United States and the state of Tennessee to resolve allegations that CareAll violated the False Claims Act by submitting false and upcoded home healthcare billings to the Medicare and Medicaid programs, the Department of Justice announced today.  CareAll is based in Nashville, Tennessee, and is one of Tennessee’s largest home health providers.

“Home health agencies may only bill Medicare and Medicaid for care that is necessary and covered by the programs,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “This settlement is another example of the department’s commitment to ensuring that home health care dollars – which are so vital to ensure the care of homebound patients – are spent for their intended purposes.”

This settlement resolves allegations that between 2006 and 2013, CareAll overstated the severity of patients’ conditions to increase billings and billed for services that were not medically necessary and rendered to patients who were not homebound.

“This case demonstrates that enforcement of the False Claims Act is a priority of the U.S. Attorney’s Office for the Middle District of Tennessee,” said U.S. Attorney David Rivera for the Middle District of Tennessee.  “The U.S. Attorney’s Office and our law enforcement partners are committed to protecting the public and vigorously pursuing all those who knowingly submit false claims affecting the Medicare and Medicaid programs.”

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Whistleblowers Make a Difference, Study Finds

Whistleblower Case StudyA study released last week by the Social Science Research Network proves what False Claims Act attorneys have known all along: whistleblowers matter.

Four researchers evaluated penalties for misrepresentation from the Department of Justice and the Securities & Exchange Commission from 1978 to 2012.  The researchers controlled several factors and then compared cases that involved whistleblowers and those that did not. Read More…


Oklahoma company Ocean Dental agrees to pay $5.05M fraud settlement

Oklahoma Attorney General Scott Pruitt said preventing fraud is a priority to ensure that people who truly need assistance can get it.

Ocean Dental had been accused of submitting false claims to the Oklahoma Medicaid program for dental restorations by former employee Robin Lockwood between January 2005 and September 2010.

Lockwood was sentenced to 18 months in federal prison for fraud in a separate case. Lockwood, who was released in April, also must pay more than $375,000 in restitution.

Ocean Dental’s $5.05 million settlement releases the company and owner Chad Hoecker from any civil liability in the case, authorities said, although it is required to adhere to additional record-keeping, reporting and compliance requirements.

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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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