2015 False Claims Act Cases

In 2015 the U.S. government recovered $2, 913,033,047 from False Claims Act Whistleblower cases. 

The cases collected below account for $1,065,010,000 of the overall amount recovered. The whistleblowers involved in these cases were awarded more than $121,980,054

The cases presented here between the months of January and May do not include any medical related (pharmaceutical companies, physicians, Medicare, etc…) False Claims Act Cases

Read the cases below for more information
 

Whistleblower Reveals Medical Company Paying Kickbacks to Medical Suppliers

December 23, 2015:  Coloplast Corp. and Liberator Medical have agreed to pay over $3.6 million to resolve allegations that they violated the False Claims Act. Coloplast Corp. paid kickbacks to several medical suppliers, including Liberator Medical, to induce them to conduct promotional campaigns designed to refer individual users to Coloplast products. 

This case was brought forward by two former Coloplast employees, who originally filed the case under the whistleblower provisions of the False Claims Act. The two whistleblowers were awarded a share of the settlement for having risked their jobs and livelihood to come forward with the evidence against these companies.

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Whistleblowers Stop Importers from Undermining U.S. Manufacturers 
December 21, 2015:  University Furnishings has agreed to pay $15 million to settle allegations that they violated the False Claims Act. The company made, and conspired with others to make, false statements to avoid paying duties for Chinese imported wooden bedroom furniture. The Texas based company knowingly misclassified the Chinese furniture to bypass the duties they owed, specifically the anti-dumping duty.

The University Loft Company stepped forward to report these false claims under the qui tam, or whistleblower, provisions of the False Claims Act. By doing so the University Loft Company exposed and prevented import fraud that would undermine U.S. businesses. They received $2.25 million as a reward for their help in exposing the fraudulent actions of University Furnishings. Read the DOJ Press Release

Two Whistleblowers Help Hold 32 Hospitals Accountable for Performing Unnecessary Procedures 
December 18, 2015:  Hospitals throughout 15 states will pay more than $28 million after violating the False Claims Act by submitting improper kyphoplasty billing to Medicare. Kyphoplasty is a minimally invasive procedure that treats spinal fractures to help relieve pain caused by osteoporosis. It was found that 32 hospitals billed Medicare for kyphoplasty procedures on a costly inpatient hospital admission basis, in order to increase their compensation from Medicare.

The case was originally brought forward by two whistleblowers, Craig Patrick, a former reimbursement manager for Kyphon, and Charles Bates, a former regional sales manager for Kyphon. For their help, and in acknowledgment of the risks they took, they received approximately $4.75 million.

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Whistleblower Reports Improper Billing from Splint Supplier
December 18, 2015:  Dynasplint Systems Inc. and its president have agreed to pay over $10 million to resolve allegations that they violated the False Claims Act. The two knowingly mischarged Medicare for splints used by patients in Medicare-certified skilled nursing facilities. Additionally, they plundered taxpayer-funded programs for their own enrichment.

This information was brought to light by whistleblower Meredith Deane, a former sales executive for Dynasplint, who originally filed the case under the qui tam provisions of the False Claims Act. Deane will receive at least $1.98 million for risking her career and livelihood for the benefit of others.

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Whistleblower Reveals that Oncology Company Had Been Conducting Unnecessary Laboratory Tests
December 18, 2015:  21st Century Oncology LLC, has agreed to pay $19.75 million to resolve allegations that they violated the False Claims Act. The company billed federal health care programs for laboratory tests that were not medically necessary. These tests were administered solely to increase profits, and were not based on medical reasonability or qualifications.

The case was originally filed by a  former 21st Century Oncology LLC medical assistant under the qui tam provisions of the False Claims Act. For putting their job and livelihood on the line, the whistleblower was rewarded $3.23 million. Read the DOJ Press Release

Whistleblower Protects the U.S. Department of Defense

November 2, 2015:  NetCracker Technology Corp., a telecom software and services company, and Computer Sciences Corp., an information technology services company, have agreed to pay $12.75 million to resolve allegations that they violated the False Claims Act. The companies used individuals without security clearances on a Defense Information Systems Agency contact.

A former NetCracker employee, John Kingsley, brought attention to this when he filed a lawsuit under the whistleblower provision of the False Claims Act. Due to his essential role in the case, as well the risk he took of losing his career and livelihood, Kingsley will be awarded $2,358,750 of the recovery. 

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Whistleblowers Reveal Wrongdoings in Nearly 500 Hospitals
October 30, 2015:  The Department of Justice has reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to implantable cardioverter defibrillators (ICD), which were implanted in Medicare patients in violation of Medicare Coverage requirements. If a patient has had a heart attack, heart bypass surgery or angioplasty they must wait a certain period of time before receiving an ICD. However, each of the settling hospitals implanted ICDs during the period prohibited by the National Coverage Determination, which governs Medicare coverage for the device.

Most of the settling defendants were named in qui tam, or whistleblower, lawsuits brought under the False Claims Act. Collectively, these whistleblowers have received more than $38 million from the settlements. Read the DOJ Press Release

Whistleblowers Expose Health Care Fraud and Kickbacks 

October 29, 2015:  Warner Chilcott U.S. Sales LLC will pay $125 million for committing health care fraud and submitting false claims to government health care programs. Warner Chilcott illegally marketed several of its drugs by providing inaccurate and misleading information to physicians and insurance companies. Company employees were instructed to bribe physicians with payments, expensive meals, and other receptions in order to get them to prescribe Warner Chilcott drugs and gain a competitive advantage over other drug companies. Employees were also told to submit false and misleading authorization requests to federal health care programs for several of their drugs, which they claimed were superior to less expensive drugs, in order to get around formulary restrictions.

Thanks to whistleblowers, this illegal activities have been stopped. For their aid in the case, the whistleblowers will receive $22.9 million from the total civil recovery.

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Whistleblower Stands Up Against Corrupt Healthcare System

October 16, 2015:  Toumey Healthcare Systems was sold to a different company and forced to pay $237 million in a case filed under the qui tam provisions of the False Claims Act by Dr. Michael K. Drakeford, an orthopedic surgeon, who had been offered an illegal contract by the company. Toumey Healthcare Systems was found guilty of violating the Stark Law and to have filed more than 21,000 false claims with Medicare.

The company entered into contracts with 19 specialist physicians that required the physicians to refer their outpatient procedures to Tuomey and, in exchange, paid them compensation that far exceeded fair market value and included part of the money Tuomey received from Medicare for the referred procedures.

Dr. Drakeford, in recognition of his important role as a whistleblower and his potential loss of career and livelihood, will be awarded $18.1 million of the settlement.

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Whistleblower Case Reveals Boeing Company Scammed U.S. Air Force

October 14, 2015:  The Boeing Company paid $18 million to settle allegations that the company submitted false claims for labor charged on maintenance contracts with the U.S. Air Force for the C-17 Globemaster aircraft. The aircraft, which is both manufactured and maintained by Boeing, is one of the military's major systems for transporting troops and cargo throughout the world. The Boeing Company knowingly charged the United States Air Force for time its mechanics spent on extended breaks and lunch hours, and not on maintenance and repair work properly chargeable to the contracts.

A former Boeing employee, James Thomas Webb, brought this information to light when he filed a lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act. In acknowledgment of his vital role in holding The Boeing Company accountable for its actions as well as the risks he faced in bringing this information forward, he will receive a substantial share of the settlement.

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Medical Malpractice Uncovered by Whistleblowers
October 9, 2015:  West Chester Hospital and its parent company, UC Health, have agreed to pay $4.1 million to settle allegations that they violated the False Claims Act by billing federal health care programs for costs associated with medically unnecessary spine surgeries. The surgeries were performed by Dr. Abubakar Atiq Durrani, who has since fled the country and remains a fugitive.

It was several former patients of Durrani who came forward, filing a lawsuit under the whistleblower provisions of the False Claims Act. Of the $4.1 million in taxpayer recovery, the state of Ohio and commonwealth of Kentucky will receive $72,000. The whistleblowers will receive $800,000 for their instrumental role in the case.
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Two Former Employees Expose False Claims for Hospice Patients That Were Not Terminally IlL
October 2, 2015:  Guardian. an Atlanta hospice company, will pay $3 million for submitting false claims to Medicare for hospice patients who were not terminally ill. Medicare provides benefits for patients who are terminally ill and have a life expectancy of six months or less. The benefits include providing comfort, care, and relief from pain, symptoms, and stress of those who are in their last stages of life. Guardian knowingly failed to train staff properly on hospice eligibility criteria and set aggressive targets to recruit patients for their hospices.

This information was brought forward by two whistleblowers, Rose Betts and Jennifer Williams. For their help in the case, the two women will receive $510,000 from the settlement. Read the DOJ Press Release

Former Employees Speak Out Against Illegal Compensation Arrangements
September 21, 2015:  Adventist Health System, a non-profit healthcare organization that operates hospitals and other health care facilities in 10 states, has agreed to pay $115 million to settle allegations that it violated the False Claims Act by maintaining improper compensation arrangements with referring physicians and by miscoding claims. Adventist submitted false claims to the Medicare and Medicaid programs for services rendered to patients referred by employed physicians who received bonuses based on a formula that improperly took into account the value of the physicians' referrals to Adventist hospitals.

The case was originally brought forward by four whistleblowers that filed under the qui tam provisions of the False Claims Act. Three of the whistleblowers worked at one of Adventist's hospitals and the fourth worked at Adventist's corporate office. The bravery of these four citizens has helped make hospitals and the health care system a safer place for all patients. In recognition of this, as well as the potential loss of career and livelihood that they face, the whistleblowers will receive a portion of the taxpayer recovery.

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Whistleblower Reveals Hospital District's Excessive Pay to Physicians in Exchange for Patient Referrals

September 15, 2015:  The North Broward Hospital District will pay $69.5 million for violating the False Claims Act. The hospital district was discovered to have been giving excessive compensation to physicians who referred their patients to the hospital district's facilities. 

Dr. Michael Reilly, a whistleblower who filed the case under the qui tam provisions of the False Claims Act, helped to shed light on North Broward Hospital District's fraudulent behavior. For his help, Dr. Reilly has received $12,045,655.51 from the settlement.

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Whislteblower Exposes Plot to Evade Customs Duties 
September 4, 2015:  Robert Wingfield and Bill Ma have agreed to pay $435,000 for conspiring to evade customs duties on imports of aluminum extrusions from the People's Republic of China. They were part of a scheme, involving four other cases, where importers used false statements to import goods into the United States. Wingfield and Ma conspired to form a company, Northeastern Aluminum Corp. to import the goods and shield the real importers from liability. They also misrepresented the country of origin for their goods in order to avoid paying duties.

The whistleblower in this case was James F. Valenti Jr. For his help in exposing this plot to illegally import goods and evade customs, Mr. Valenti received $79,000.
Read the DOJ Press Release 

Whistleblower Executive Reveals Corruption in His Own Company
September 4, 2015:  Columbus Regional Healthcare System and Dr. Andrew Pippas have agreed to pay $25.425 million to resolve allegations that they violated the False Claims Act by submitting claims in violation of the Stark Law. Columbus Regional provided excessive salary and directorship payments to Pippas, violating the Stark Law, and submitted claims to federal health care programs for services at higher level than actually performed.

The settlement resolves two separate lawsuits, both filed by Richard Barker. He was a former Columbus Regional executive and filed both cases under the qui tam, or whistleblower, provisions of the False Claims Act and the Georgia False Medicaid Claims Act. Of the $25.425 million in taxpayer recovery, $24,666,040 will go to the federal government and $758,960 will go to the state of Georgia. Barker will be awarded a share for his instrumental role of bringing this corruption to attention as well as in acknowledgment of the potential loss of career and livelihood that he faces. Read the DOJ Press Release

KMART Pharmacist Reveals Company Scams Medicare System
September 1, 2015:  Kmart has agreed to pay $1.4 million to resolve allegations that it violated the False Claims Act by using drug manufacturer coupons and gasoline discounts as improper Medicare beneficiary inducements. Kmart knowingly and improperly influenced the decisions of Medicare beneficiaries to bring their prescriptions to Kmart pharmacies by permitting the Medicare beneficiaries to use drug manufacturer coupons to reduce or eliminate prescription co-pays that they otherwise would be obliged to pay. Kmart also encouraged Medicare beneficiaries to bring their prescriptions to Kmart pharmacies by offering them carrying levels of discounts on the purchase of gasoline based on the number of prescriptions they filled.

This information was brought to light by Joshua Leigher, a former Kmart pharmacist, under the qui tam, or whistleblower, provisions of the False Claims Act. In Acknowledgment of his actions, and the potential risks he faced to bring forward this information, he will receive $248,500 from the settlement.

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Former Executive Reveals Shortcuts Taken on Background Checks
August 19, 2015:  The U.S. Investigations Services Inc. (USIS), with its parent company, Altegrity, violated the False Claims Act in a contract with the U.S. Office of Personnel Management (OPM) for background checks for the federal Government. The company released cases to the OPM representing them as complete when the investigations were actually not. During the time this was taking place the OPM issued payments and contract incentives to the USIS that would have otherwise not have been given if they had known the background checks had not gone through the quality review processes as they were required to. The companies have forgone their payments for their fraudulent investigative services to the OPM, which is valued at least at $30 million dollars worth of Federal taxpayer money.

Blake Percival, a former executive at USIS helped reveal the unfinished background investigations. Percival helped to prevent $30 million dollars of Federal money from being paid to a private company who submitted incomplete background checks. For his help, Percival will receive a portion of the funds that would have otherwise been paid to USIS had he not come forward with his information.

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Whistleblower Physician Helps End Patient Exploitation

August 13, 2015:  Two Southwest Missouri health care providers, who own and operate a hospital as well as other health care facilities, have agreed to pay $5.5 million to settle allegations that they violated the False Claims Act by engaging in improper relationships with referring physicians. The two companies submitted false claims to the Medicare program for services rendered to patients referred by physicians who received bonuses based on a formula that improperly took into account the value of the physicians' referrals of patients to the clinic.

The lawsuit was originally filed by whistleblower Dr. Jean Moore, a physician employed by one of the companies, under the qui tam provisions of the False Claims Act. His actions helped end the exploitation of patients and the Medicare system which the two health care providers were engaged in. In acknowledgement of his role as well as his potential loss of career and livelihood, he will receive $825,000 from the settlement.

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Ex-Executive Reveals Company Misinformed the National Nuclear Security Administration
August 11, 2015:  PC Specialists Inc., doing business as Technology Integration Group (TIG), has agreed to pay $5.9 million to settle allegations that the company inflated the price of computers sold through another company to the National Nuclear Security Administration (NNSA). TIG sold Dell computers to Sandia Corporation for resale to the US under Sandia's contract with NNSA. However, TIG knowingly inflated the amounts it charged Sandia by failing to give credits for rebates and discounts it received from Dell as required by its contract and causing false claims to the government for the inflated price.

Maverick Granger, a former TIG executive, released this information when he filed a lawsuit against the company under the qui tam, or whistleblower, provisions of the False Claims Act. Granger will receive a share of the settlement for risking his career and livelihood as well as his role in the case.
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Whistleblower Exposes Kickback Program and Unapproved Spinal Surgeries

July 30, 2015:  NuVasice Inc., a medical device manufacturer, has agreed to pay $13.5 million to resolve allegations that the company caused health care providers to submit false claims to Medicare and other federal health care programs for spine surgeries by marketing the company's CoRoent System for surgical uses that were not approved by the FDA. The company also violated the Anti-Kickback Statue by offering and paying illegal remuneration to certain physicians to induce them to use the CoRoent System in spine fusion surgeries.

Kevin Ryan, a former NuVasive sales representative, originally filed the lawsuit under the whistleblower provision of the False Claims Act, filed a qui tam suit against the company.  Due to his important role in the case and in acknowledgement of his potential loss of career and livelihood, he has been awarded $2.2 million of the settlement. The federal government will receive $12,583,413.84  and California Medicaid will receive $916,586.16

Read the DOJ Press Release

 

Nursing Facility's Elaborate Kickback Scheme Reported By Whistleblower

June 16, 2015:  Hebrew Homes has agreed to pay $17 million to resolve allegations that they violated the False Claims Act and Anti-kickback statue by improperly paying doctors for referrals of Medicare patients requiring skilled nursing care. Hebrew Homes operated a sophisticated kickback scheme ßin which they hired numerous physicians as "medical directors" and who were under contracts that specified numerous job duties and hourly requirements. These were in reality ghost positions and most of the medical directors were required to perform few, if any, of their contracted duties. The payments were to assure that the physicians would refer patients to Hebrew Homes.

The lawsuit was originally filed by Stephen Beaujon, a former CFO of Hebrew Homes, under the qui tam provisions of the False Claims Act. Due to his instrumental role in the case and his potential loss of career and livelihood, he will be awarded $4.25 million from the settlement.

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Whistleblowers Expose Educational Fraud
June 24, 2015: Education Affiliates, a for-profit education company,  will pay $13 million to resolve allegations that they violated the False Claims Act by submitting false claims for federal student aid to the Department of Education for their students. The for-profit group altered admissions test results to admit unqualified students, created fraudulent high school diplomas, falsified students' federal aid applications, and misrepresented graduation and job placement rates.

The company's actions were brought to light by five courageous whistleblowers, who will receive $1.8 million from the settlement.

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Whistleblower Reveals Children's Hospitals' False Cost Reports

June 15, 2015:  Children's Hospital, Children's National Medical Center Inc. (CNMC) and its affiliated entities have agreed to pay $12.9 million to resolve allegations that they violated the False Claims Act by submitting false cost reports and other applications to the components and contractors of the Department of Health and Human Services. The CNMC misstated information on cost reports and applications in two distinct manners to HHS, resulting in overpayment.

James A Roark Sr., a former employee of CNMN, filed the lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act. Roark was awarded $1,890,649.98 for risking his career and livelihood as well as for the essential role he played in the case.

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Whistleblower Exposes UPS Scheme to Falsify Delivery Requirements to U.S. Government Agencies

May 19, 2015:  The United Parcel Service Inc., more commonly known as UPS, has agreed to pay $25 million to settle allegations that they violated the False Claims Act due to falsifying claims to the federal government in regards to its delivery of Next Day Air overnight packages. UPS, under contracts with the federal government, provides delivery services to hundreds of federal agencies throughout the United States. From 2004 to 2014 UPS concealed its failure to meet delivery guarantees, which deprived federal agencies the ability to request refunds for the late delivery of packages. They knowingly participated in practices that made it appear as if the packages were delivered on time when they were not.

A former employee of UPS, Rober K. Fulk, exposed UPS by filing the case against them under the whistleblower provisions of the False Claims Act. For his role in the case, Fulk received $3.75 million from the settlement.

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Whistleblower Reveals Company Created Fake Office to Receive Government Bribe
April 8, 2015:  Air Ideal Inc. and its majority owner, Kim Amkraut, have agreed to pay $250,000 to resolve allegations that they made false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company. Air Ideal claimed that their principal office was located in a designated HUBZone although this office was in fact only a "virtual office" where none of the company employees worked. Not only did Air Ideal knowingly provide false information about the location of their principal office, but they also fabricated a lease agreement as well as other documents for the alleged office. They then used the fraudulently procured HUBZone certificate to obtain government contracts.

Patricia Hopson, a construction industry employee, originally filed the lawsuit against Air Ideal under the qui tam provisions of the False Claims Act. In acknowledgment of her important work, and the risks to her career and livelihood she faced in coming forward, Hopson will be awarded $42,500.

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Whistleblower Exposes Importers Illegally Undermining Domestic Business
February 12, 2015:  Three importers- C.R. Laurence Co. Inc., Southeastern Aluminum Products Inc. and Waterfall Group LLC- have agreed to pay over $3 million to resolve a False Claims Act lawsuit alleging that the companies engaged in schemes to evade customs duties on imports of Aluminum extrusions from China. The three companies evaded antidumping and countervailing duties by knowingly giving false information about their import's country of origin. The companies claimed all their imports came from Malaysia when in reality the goods were manufactured in China and simply shipped through Malaysia.

The lawsuit was originally filed by whistleblower James F. Valenti Jr. under the qui tam provisions of the False Claims Act. Mr. Valenti will receive a portion of the settlement for his help in exposing the companies' fraudulent behavior.</span">

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