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Stethoscope1The U.S. Department of Justice announced yesterday that Tennessee-based Community Health Systems Professional Services Corporation and three affiliated New Mexico hospitals (collectively “Community Health”) have agreed to pay the federal government $75 million to settle a relator’s allegations that they violated the False Claims Act by making illegal donations to county governments which were then used to fund the state share of Medicaid payments to the hospitals. The corporation manages more than 200 affiliated hospitals across 29 states. Community Health is one of the largest hospital organizations in the nation and employs 135,000 people, including 22,000 physicians. In September, the publicly traded company reported to its investors that it had set aside a reserve of $75 million to cover the claims involved in this case. Every aspect of the case, from discovery to dispositive motions, had been fiercely litigated with nearly 650 docket entries filed. Continue reading ›

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Hospital_billing-300x200On Monday, the U.S. Attorney’s Office for the Eastern District of Kentucky announced that Lafferty Enterprises, LLC, doing business as Trans-Star Ambulance Services (“Trans-Star”), has agreed to pay $948,000 to settle a relator’s allegations that it violated the False Claims Act by billing federal health care programs for medically unnecessary services over the course of several years. Between February 1, 2006 and December 31, 2012, the company transported Medicare patients to and from dialysis clinics by ambulance when an ambulance transport was not medically necessary. Medicare only covers non-emergency ambulance transports when all other forms of patient transportation are considered to pose a medical risk. The former owner of a different ambulance company operating in eastern Kentucky filed the complaint in this case. The relator, Kevin Fairlie, will receive $189,600 for his role in helping to uncover the fraud. Continue reading ›

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Marketing-StrategyOffice Depot, Inc. has agreed to pay $68.5 million to settle a relator’s allegations that the Florida-based office supply and services retailer had defrauded all political subdivisions within the state of California that had purchased goods and services from Office Depot. More specifically, in violation of the California False Claims Act, Office Depot allegedly charged the government entities more than it should have by failing to comply with a “Most Favored Public Entity” contractual provision, failing to comply with a “Pricing Commitment,” misrepresenting or omitting material information regarding pricing plans and switching customers from one plan to another without consent, using incorrect costs in calculating cost-based pricing; impermissibly changing list prices, and discontinuing or manipulating items on the “core lists” of products. Ultimately, more than 1,000 cities, counties, school districts and other government entities were impacted by the alleged fraud. Continue reading ›

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College-classroomYesterday, the Kansas Attorney General’s Office announced that it had filed suit under the state’s recently enacted False Claims Act against a New Jersey company that sent false invoices for textbooks that were never purchased or delivered to at least 317 Kansas public schools. The suit was filed against Robert Armstrong, an individual doing business as Scholastic School Supply LLC out of Franklinville, New Jersey. The company is not affiliated with Scholastic Inc., the well-known children’s book publisher. An investigation by the attorney general’s consumer protection division stemmed from multiple complaints received from school districts across Kansas that received false invoices from Scholastic School Supply between September and December 2014.  None of the Kansas schools receiving invoices had actually ordered textbooks from the company. The Kansas Department of Education worked with the attorney general to notify school districts statewide of the problem before they erroneously paid the invoices. Continue reading ›

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facts-among-untruths-300x234 2The Fifth Circuit Court of Appeals has revived the federal government’s False Claims Act case against Bollinger Shipyards, Inc. (“Bollinger”) in connection with a contract under which Bollinger was to modify eight vessels owned by the United States Coast Guard (“Coast Guard”). The $78 million in modifications ultimately rendered the vessels unseaworthy because Bollinger allegedly fraudulently miscalculated the hulls’ resistance to bending. The company had allegedly run three different calculations with false inputs and submitted the highest one to the Coast Guard. Bollinger also allegedly declined outside review of the calculations that it had made into preserving the integrity of the ships because of concerns that the review would reveal problems. Bollinger Shipyards specializes in new construction, steel fabrication, vessel repair, and conversion of a wide variety of Coast Guard and military vessels and commercial offshore and inland vessels. The company currently operates ten shipyards, all of which are located throughout South Louisiana and Texas. Continue reading ›

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MassachusettsThe Attorney General of Massachusetts announced today that Canton-based environmental services company National Water Main Cleaning Co. (“NWMC”) has agreed to pay more than $650,000 to settle allegations that it submitted fraudulent bills and records on multiple public contracts for sewer, storage tank, and catch basin cleaning, maintenance, and repair in violation of the Massachusetts False Claims Act. The company also allegedly illegally discharged sewage and wastewater in violation of the Massachusetts Clean Waters Act. Under the terms of the settlement, NWMC will pay $405,000 to resolve the allegations it violated the state’s False Claims Act and $250,000 in civil penalties to resolve allegations that it violated the Massachusetts Clean Waters Act, of which $75,000 will be paid to the Massachusetts Natural Resource Damages Trust. NWMC will also be required to impose revised protocols regarding proper waste disposal and to provide comprehensive environmental compliance training for its employees. Continue reading ›

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Whistle-300x225On Wednesday, an Alabama federal court judge refused to dismiss a whistleblower’s complaint filed against Safety-Kleen Systems Inc. (“Safety-Kleen”) under the False Claims Act. The Texas-based provider of environmental services, oil re-refining, and responsible cleaning solutions allegedly overbilled the federal government for cleaning solvents used by a military depot. More specifically, the suit alleges that Safety-Kleen repeatedly billed Northeast Alabama’s Anniston Army Depot for the total potential amount of solvent used each week to clean military equipment, including unused non-spent solvent that the government had already paid for. Safety-Kleen earned nearly $635,000 over the life of the contract at issue, which covered a period extending from August 1, 2008 through July 31, 2013. The PD680II solvent was used at the Army Depot to degrease tanks, vehicles and small arms returning from overseas combat. Continue reading ›

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internal-auditOn Monday, the U.S. Department of Justice announced that the Research Foundation for the State University of New York (“SUNY”) has agreed to pay $3.75 million to settle allegations made by a number of relators that its Center for Development of Human Services (“CDHS”) violated the False Claims Act by manipulating the audits that it performed of federally funded health care programs in the state. The Research Foundation is a nonprofit educational corporation that administers grants and contracts that are awarded to university research projects by federal, state, and private entities. CDHS is a Research Foundation program headquartered at Buffalo State College, with offices in Albany, Buffalo, Syracuse, Rochester, and New York City. The complaint against the Research Foundation was filed in April 2010 by five of its former employees. The federal government then elected to intervene in the case. The relators will collectively receive $825,000, or 22%, of the total settlement for their role in uncovering the fraud. Continue reading ›

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Food-Safety-300x200On Monday, overseas military contractors pled guilty in federal court to criminal fraud in connection with overcharging the federal government for food and water supplied to soldiers in Afghanistan. Supreme Foodservice GmbH, a privately-held Swiss company, and Supreme Foodservice FZE, a privately-held United Arab Emirates company, (collectively “Supreme Foodservice”) will pay the government over $288 million, the maximum criminal fines allowed. In addition, the companies have agreed to pay $101 million to resolve a relator’s allegations of fraud pursuant to the False Claims Act. The relator will receive $16.16 million of the civil settlement for his role in uncovering the fraud. The companies fraudulently inflated the price charged for Local Market Ready goods and bottled water sold to the government under an $8.8 billion Subsistence Prime Vendor Contract for services through 2013. Continue reading ›

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College-classroomThe federal government and the state of Florida have filed a civil complaint under the False Claims Act, intervening in a relator’s case against FastTrain College (“FastTrain”). The now defunct Miami-based for profit chain of schools allegedly submitted fraudulent documents to the U.S. Department of Education on behalf of students in order to gain access to federal financial aid programs. The conduct allegedly occurred from at least January 1, 2009 through June 22, 2012 when the schools were closed. Over this period, the school and its students received $4.34 million in student loans and $2.2 million in federal Pell Grants. In October, the school, its owner, and three other employees were charged in a 15-count indictment for conspiring to steal government money. Continue reading ›

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