Posts Tagged ‘Department of Justice’

“Fountain of Youth” Doctor Convicted in Healthcare Fraud Scheme

Picture courtesy of Connect Media

A Pittsburgh area cardiologist was found guilty of two counts of healthcare fraud, involving more than $13 million in falsified insurance billing. Dr. Samirkumar Shah submitted the fraudulent claims to Medicare, Medicaid and several private insurance companies and received payments in excess of $3.5 million.

During an eight day trial, evidence was submitted to show that Dr. Shah, 56, offered External Counter Pulsation (ECP) treatments to patients in Pennsylvania, Ohio, New York and Florida for a variety of ailments, including obesity, migraines and erectile dysfunction. He advertised the ECP treatments as “the Fountain of Youth” and claimed they made patients “younger and smarter,” according to the Department of Justice.

ECP involves the use of a specialized bed equipped with pressure cuffs, which exert pressure upon patients’ lower extremities as a means to increase blood flow to the heart.  Insurers only reimburse for ECP treatments for patients who suffer from disabling angina—or chest pain caused by decreased blood flow to the heart—and only when a physician supervised the treatment.

FBI Pittsburgh Special Agent in Charge Robert Jones called healthcare fraud a serious problem that impacts every American. “It takes critical resources from our health care system and increases health care costs for everyone. Dr. Shah’s disregard for safe patient care goes against the medical ethics he was to uphold,” Jones said.

According to the DOJ, evidence showed that Shah instructed his employees to indicate that every patient had disabling angina on billing sheets that were used to support false insurance claims. In some cases, Shah never even met patients and never reviewed ultrasound imagery before approving new patients to begin ECP. In addition to billing for ECP treatments that were not medically necessary and were not provided under direct physician supervision, Shah also double-billed insurers.

Contrary to health insurance requirements, ECP treatments routinely occurred while neither Shah nor any other medical doctor was present at his various locations. On one occasion, a patient experienced an adverse event during his ECP treatment and had to be transported via ambulance to the hospital.

U.S. Attorney Scott Brady said, “Health care fraud threatens the safety and integrity of our entire health care system. Doctors and medical professionals like Dr. Shah who issue false diagnoses, order unnecessary testing and fraudulently bill Medicare and Medicaid in effect steal from the most vulnerable in our community.”

Shah faces a maximum sentence of 10 years in prison, a fine of $250,000, or both.  Click here to read more from the Department of Justice.


Deputy Associate AG Talks False Claims Act

Yesterday, Deputy Associate Attorney General Stephen Cox delivered remarks on the False Claims Act and qui tam enforcement by the Department of Justice. 

His speech touched on five major topics:

  1. Fraud on the Taxpayer
  2. Qui Tam Dismissals
  3. Subregulatory Guidance
  4. Piling On
  5. Cooperation Credit
Read More…

Military Contractor PTP Settles Whistleblower Case

James Hoyer Partner Jillian Estes interviewed by ABC Action News

James Hoyer Partner Jillian Estes interviewed by ABC Action News about the PTP whistleblower case settlement

People Technology & Processes, LLC (“PTP”), a defense contractor based in Lakeland, Florida, agreed to settle a whistleblower case in which the company was accused of billing for work never performed for the U.S. Army in Afghanistan, the James Hoyer law firm announced today.  The company was also accused of falsifying records to cover up the fraud.  PTP paid the U.S. government $320,000 to resolve the allegations of improper billing and fraud.

Click here to watch the ABC Action News story on the whistleblower case by Investigative Reporter Adam Walser .

Improper Billing & Cover up

The allegations were exposed in a whistleblower lawsuit filed by former PTP employee Aidan Tamer Toprakci, a James Hoyer client.  Toprakci is a billing and accounting software specialist for PTP and discovered multiple billing discrepancies and efforts to cover them up. He resigned from the company in November of 2012, after efforts to get PTP to address the problem were rebuffed.  In 2013, Toprakci filed suit under the False Claims Act, which allows private citizens to act on behalf of taxpayers when they discover fraud against the government.

“I was auditing the records to make sure billings were done correctly, when I discovered they were billing for an employee who had been fired,” Toprakci said.  “I brought it to their attention, but they were not interested in correcting the problem. They started retaliating against me for raising the issue. It upset me greatly that I believed the U.S. Army was being ripped off, and I did not want to be a part of that.”

PTP- ABC Aidan intv

James Hoyer Client Adain Toprakci interviewed via FaceTime by ABC Action News

The government’s investigation after Toprakci filed suit confirmed that PTP was not only billing for an employee who had been fired, but also for an employee who was on vacation for a month and others even before they started working for the company.  Toprakci also provided evidence that the Defendants falsified records to cover up the fraudulent conduct.

The Defendants

PTP was a U.S. Army subcontractor for ManTech International, one of the prime U.S. contractors providing services in Afghanistan.  PTP billed ManTech for false hours, which U.S. taxpayers ultimately paid for.

Victor Buonamia is the President and CEO of PTP, and Nicole Buonamia, his daughter, is the CFO. The improper invoices submitted by PTP from November of 2011 through June of 2012,   were signed by Victor Buonamia, Nicole Buonamia, or both.

Stiff Penalty Sends Message

PTP was required to pay two-and-a-half times damages in this case, a penalty rarely sought by the government and an indication of the severity of the allegations.

“The level of disregard and abuse of taxpayer money is astonishing here,” said James Hoyer partner Jillian Estes who represents Toprakci. “It was very important for the government to seek the most severe damages to send a message that this behavior will not be tolerated by government contractors and subcontractors.”

“All contractors and subcontractors, who are ultimately paid with American taxpayer dollars, will be held accountable for submitting fraudulent claims to the Government,” said Special Agent in Charge of Defense Criminal Investigative Services, Southeast Field Office, John F. Khin, in a news release by the U.S. Department of Justice.

Past Problems with PTP

This is not the first time PTP has had a problem with performance.  In a suit with primary contractor SAIC, the company was chided for putting troops in danger in Afghanistan. According to the lawsuit between SAIC and PTP:

On August 28, 2013, the Army and several Defendants personnel had a meeting, during which the Army stated it was ‘fed up’ with PTP’s poor performance, lack of management, hostile work environment with a pattern of EEO violations/racial discriminations, and practices which endangered the lives of military personnel.

“This company was not only endangering the lives of soldiers, but also stealing money intended to keep them safe.  It’s a pattern of bad behavior that has to stop,” said attorney Estes.

The False Claims Act

The False Claims Act is the government’s most successful tool in fighting fraud.  In 2016 alone, the Justice Department recovered more than $4.7 billion from False Claims Act cases, the 3rd highest annual recovery in FCA history.  It would not be possible without brave whistleblowers like Aidan Toprakci, a native of Turkey who became a United States citizen in 2016.

“Like so many other courageous whistleblowers, Aidan put his livelihood on the line to come forward and expose fraud on behalf of American taxpayers,” said Estes.

“I am grateful to this country, and I want to give back for the many opportunities I have received here.  I am proud that my efforts returned money to U.S. taxpayers,” Toprakci said.

As an incentive to come forward to expose fraud against the government, whistleblowers receive a percentage of the money recovered as a reward.  In this case, Toprakci received 20% of the government’s recovery as a reward for his efforts.

Click here to read a news story on the settlement in the Lakeland Ledger.


DOJ: $4.7 Billion In Recoveries From 2016 Whistleblower Cases

DOJ Whistleblower Attorneys

DOJ Whistleblower AttorneysThe United States released data last week showing that the Department of Justice (DOJ) recovered more than $4.7 billion in 2016 from settlements and judgments in whistleblower cases involving fraud or false claims against the government. This is the third largest annual recovery in the history of the modern False Claims Act (FCA), which dates back thirty years to 1986. Read More…


Olympus Med Equip Co. to Pay $646 Million Over Kickbacks & Bribes

The  largest distributor of endoscopes and related equipment in the United States, Olympus Corporation, will pay $623.2 million to resolve criminal charges and civil claims relating to a scheme to pay kickbacks to doctors and hospitals, the Department of Justice announced today.  The Justice Department’s Criminal Division also announced that a subsidiary of the distributor will pay $22.8 million to resolve criminal charges relating to the Foreign Corrupt Practices Act (FCPA) in Latin America.

Lavish Gifts

The LA Times reports that after Olympus paid to fly three doctors from a prominent California hospital to Japan for a week-long vacation, one of the physicians thanked the company for providing them with “so much extra entertainment that we did not expect.”

The expense-paid trip was just one of the dozens of illegal kickbacks that the Japanese maker of endoscopes paid to American doctors and hospitals for at least five years as it sought to increase sales in its most lucrative market, according to a criminal complaint federal prosecutors released Tuesday.

Among the company’s other illegal payments and gifts, the complaint said, were $400,000 worth of endoscopes given to a doctor after he persuaded a New York hospital to buy millions of dollars’ worth of Olympus equipment, and the free use of scopes worth $1 million provided to a Midwestern institution.

At one Olympus-sponsored forum, the company paid for doctors’ lavish meals, ballooning, winery tours, golf and spa treatments because it was “a great way to network, talk business, socialize without our competitors,” an Olympus employee explained, according to the complaint.

Whistleblower was Chief Compliance Officer

Pharmalot reports the agreements resolve a long-running investigation that was triggered by a whistleblower lawsuit filed by a former Olympus executive. John Slowik had worked at the device maker for nearly 18 years before becoming its first chief compliance officer in 2009. However, he was fired the following year after protesting kickbacks and attempting to implement reforms, according to his attorney. Slowik will receive $51.1 million from the civil settlement, before paying attorneys fees.

Anti-Kickback Statute Violations

The DOJ news release says Olympus Corp. of the Americas (OCA) was charged in a criminal complaint filed today in Newark, New Jersey, federal court with conspiracy to violate the Anti-Kickback Statute (AKS), which prohibits payments to induce purchases paid for by federal health care programs.  OCA has entered into a three-year deferred prosecution agreement (DPA) that will allow it to avoid conviction if it complies with the reform and compliance requirements outlined in the agreement.

“For years, Olympus Corporation of the Americas and Olympus Latin America dropped the compliance ball and failed to have in place policies and practices that would have prevented the substantial kickbacks and bribes they paid,” said U.S. Attorney Fishman. “It is appropriate that they be punished for that.  At the same time, the deferred prosecution agreement takes into account the companies’ cooperation and commitment to fully functional corporate compliance.”

As a result of the conduct outlined in the government’s criminal complaint and DPA, OCA has agreed to pay a $312.4 million criminal penalty and an additional $310.8 million to settle civil claims under the federal and various state False Claims Acts, the largest total amount paid in U.S. history for violations involving the AKS by a medical device company.

“The Department of Justice has longstanding concerns about improper financial relationships between medical device manufacturers and the health care providers who prescribe or use their products,” said Principal Deputy Assistant Attorney General Mizer.  “Such relationships can improperly influence a provider’s judgment about a patient’s health care needs, result in the use of inferior or overpriced equipment, and drive up health care costs for everybody.  In addition to yielding a substantial recovery for taxpayers, this settlement should send a clear message that we will not tolerate these types of abusive arrangements, and the pernicious effects they can have on our health care system.”

In a separate DPA, Olympus Latin America Inc. (OLA), a subsidiary of OCA, will pay a $22.8 million criminal penalty for violations of the FCPA.

The criminal complaint against OCA, which OCA agrees is true, charges that OCA won new business and rewarded sales by giving doctors and hospitals kickbacks, including consulting payments, foreign travel, lavish meals, millions of dollars in grants and free endoscopes.  For example:

  • OCA gave a hospital a $5,000 grant to facilitate a $750,000 sale;
  • OCA held up a $50,000 research grant until a second hospital signed a deal to purchase Olympus equipment;
  • OCA paid for a trip for three doctors to travel to Japan in 2007 as a quid pro quo for their hospital’s decision to switch from a competitor to Olympus; and
  • a doctor with a major role in a New York medical center’s buying decisions received free use of $400,000 in equipment for his private practice.

These and other kickbacks helped OCA obtain more than $600 million in sales and realize gross profits of more than $230 million.

The criminal complaint alleges that the improper payments happened while Olympus lacked training and compliance programs.  Unlike other medical and surgical products companies, Olympus did not create the position of compliance officer until 2009 and did not hire an experienced compliance professional until August 2010.

The DPA requires OCA to adopt several compliance measures to remedy its problems:

  • OCA must enhance its compliance training and maintain an effective compliance program;
  • OCA must maintain a confidential hotline and website for OCA employees and customers to report wrongdoing;
  • OCA’s chief executive officer and board of directors must certify annually that the program is effective; and
  • OCA must adopt an executive financial recoupment program requiring executives who engage in misconduct or fail to promote compliance to forfeit up to three years of performance pay.

Larry Mackey, a former federal prosecutor best known for trying the Oklahoma City bombing cases, has been selected as an independent monitor to evaluate and oversee Olympus’ compliance with the DPA.  He was selected by U.S. Attorney Fishman under department guidelines and approved by the Deputy Attorney General.  The DPA and monitor will remain in place for three years and can be extended for another two years if Olympus violates the DPA.

In the civil settlement, Olympus agrees to pay $310.8 million to the federal government and the states to resolve claims that Olympus’s payment of kickbacks caused false claims to be submitted to federal health care programs Medicare, Medicaid and TRICARE, and thus violated not only the AKS but also the federal and various state False Claims Acts.  The federal share of the civil settlement is $267,288,323, and Olympus will pay $43,512,053 million to participating states that contributed to the falsely claimed Medicaid payments at issue.

The civil settlement resolves a lawsuit filed by John Slowik, the former chief compliance officer of OCA, in the District of New Jersey, under the federal and various state False Claims Acts.  The acts permit whistleblowers to file suit for false claims against the government entities and to share in any recovery.  Mr. Slowik will receive $44,102, 573 million from the federal share and $7 million from the state share of the civil settlement amount.