whistleblower act

Judge Boosts UTC’s Penalty to $664M From $473M

Submitted by mma on July 29, 2013
July 29, 2013

A federal judge increased United Technologies Corp.’s False Claims Act penalties by 40 percent, to $664.4 million, Reuters reported earlier this month.  Last month, Connecticut-based UTC was found liable for $473 million in damages and penalties arising from a contract with the U.S. Air Force for fighter aircraft engine, the highest recovery ever obtained by the government in a False Claims Act case.

United Technologies allegedly proposed prices for the engine contract that misrepresented how the company calculated those prices.  Specifically, the government alleged that United Technologies failed to include in its price proposal historical discounts that it received from suppliers, and instead knowingly used outdated information that excluded such discounts.  As a result, the government paid hundreds of millions more than it otherwise would have paid for the engines.

The U.S. Department of Justice requested the increase, in order to reflect interest on the $473 million judgment.  Interest rates on the award varied from 6 percent to 8 percent per year, and the interest imposed dated back to 1986.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Shredding Companies Settle Contract Fraud Claims for $1.1M

Submitted by mma on July 26, 2013
July 26, 2013

Two of the country’s largest commercial shredding services companies, Shred-It Incorporated and Iron Mountain, recently agreed to pay $1.1 million between them to settle allegations that the companies knowingly submitted or caused the submission of false claims to the federal government, related to contracts for secure shredding services, the U.S. Department of Justice announced this month.

According to the complaint (see below), Iron Mountain and Shred-It obtained government contracts to provide document-shredding services under certain terms, including that documents be shredded to a very secure size not exceeding 1/32 inch in width with a 1/64-inch tolerance by 1/2 inch in length.  (The smaller the shred size, the more secure the shredded document is against unauthorized attempts to reconstruct it.)  However, the defendants allegedly did not even possess equipment that could shred documents to the secure shred size that was agreed to in the contract.  Furthermore, the defendants allegedly obtained additional revenue by reselling the improperly shredded documents to paper recyclers.

The lawsuit was originally filed by Douglas Knisely, the owner and operator of a small, family-owned secure shredding business, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and claim a share in the recovery.  Knisely’s share of the settlement has yet to be determined.

A third defendant, Cintas Corporation, continues to contest the allegations.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

PDFs: 
application/pdf icondouglas_knisely_qui_tam_complaint.pdf
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$1.8M Award to be Paid to SAIC Contract Fraud Whistleblower

Submitted by mma on July 25, 2013
July 25, 2013

Whistleblower Richard Priem will receive $1.8 million as his share of the Science Applications International Corporation (SAIC) settlement with the U.S. government, the Associated Press reported recently.

SAIC received federal grant money through the New Mexico Institute of Mining and Technology to provide course management, development, and instruction to first responder personnel to prevent and respond to terrorist attacks involving explosive devices.  The government alleged that SAIC’s cost proposals falsely represented that SAIC would use far more expensive personnel to carry out its efforts than it actually did use, resulting in inflated charges to the United States.

The U.S. Department of Justice announced in June that SAIC would settle the allegations for $11.75 million.

According to Priem, a former project manager for SAIC, high-level executives at the company were aware of the billing issues and worried about being caught.

Priem initiated the lawsuit under the whistleblower provisions of the False Claims Act.  Under the False Claims Act, a private citizen with knowledge of fraud against the government can sue on behalf of the government and share in the recovery. 

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Gallup Settles Contract Fraud Claims for $10.5M; Whistleblower to Get $1.9M

Submitted by mma on July 22, 2013
July 22, 2013

The polling and market research firm Gallup Organization has agreed to pay $10.5 million to resolve allegations that the company violated the False Claims Act and the Procurement Integrity Act for conduct involving several of its federal government contracts and subcontracts, the U.S. Department of Justice announced this month.  Gallup is headquartered in Washington, D.C.

The government alleged that Gallup knowingly overestimated labor hours in proposals to the U.S. Mint and State Department for contracts that were to be awarded without competition; as a result, the two federal agencies awarded Gallup contracts at inflated prices.  Gallup also allegedly engaged in improper employment negotiations with a then-Federal Emergency Management Agency (FEMA) official, Timothy Cannon, in order to obtain a FEMA subcontract at an inflated price and additional FEMA funding after the subcontract was awarded. 

Separately, in April 2013, Cannon paid the government $40,000 to resolve allegations that he violated the Procurement Integrity Act by improperly negotiating for and accepting an offer of employment from Gallup while being personally and substantially involved in Gallup’s subcontract with FEMA.  In related criminal proceedings, on January 15, 2013, Cannon pled guilty to a federal conflict of interest statute, and was subsequently sentenced to probation. 

The lawsuit was originally filed by Michael Lindley, a former Gallup employee, under the whistleblower provision of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Lindley will receive $1.9 million as his share of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Jackson Cardio. and Allegiance Health Settle Healthcare Fraud Claims for $4M

Submitted by mma on July 16, 2013
July 16, 2013

Michigan-based healthcare practices Jackson Cardiology Associates (JCA) and Allegiance Health have agreed to pay a total of $4 million to settle allegations that the facilities knowingly submitted or caused the submission of false claims to Medicare, Medicaid, and other federal health programs, the U.S. Department of Justice announced this week.

JCA owner Dr. Jashu Patel and his associates allegedly performed medically inappropriate cardiac procedures, including invasive catheterizations at Allegiance Health.  Specifically, the evidence showed that Dr. Patel ordered catheterizations for patients based on findings from nuclear stress tests that he improperly read as positive.  The government found that three-quarters of these patients had no significant heart blockages.  These catheterizations involve snaking a hollow tube into the heart through an incision in the patient’s groin.

Patel and Jackson Cardiology Associates also allegedly performed a variety of other office-based unnecessary tests and procedures, including peripheral stenting. 

Because the unnecessary procedures were paid for by Medicare or Medicaid, these constituted false claims.

The lawsuit was originally filed by Dr. Julie Kovach, a Michigan cardiologist, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Kovach’s share of the settlement has not been announced.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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SAIC Settles Contract Fraud Claims for $5.75M; Whistleblower to Get $977.5K

Submitted by mma on July 15, 2013
July 15, 2013

Science Applications International Corporation (SAIC) has agreed to pay the U.S. government $5.75 million to settle allegations that the company knowingly submitted or caused the submission of false claims under a contract with the General Services Administration (GSA), the U.S. Department of Justice announced earlier this month.

In 2006, GSA awarded a blanket purchase agreement (BPA) to SAIC for professional engineering and consulting services related to the study and evaluation of new products and emerging technologies.  The government alleged that SAIC personnel provided false information to GSA contracting officials to induce them to award the BPA to SAIC.  In particular, the government alleged that SAIC caused Lt. Colonel Steve Stallings (ret.), allegedly an agent of SAIC, to falsely represent himself as an employee of the Senior Executive Staff of the Department of Defense and the Director of another federal agency.  As a result, SAIC received federal funding it would not otherwise have received, had the company not provided false information to procure the contract.

The lawsuit was originally filed by Richard Ferner, a retired Lt. Colonel in the U.S. Air Force, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Ferner will receive $977,500 as his share of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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U.S. Joins Case to Enforce Law Against Kickbacks to Referring Doctors

Submitted by mma on July 9, 2013
July 9, 2013

The federal government has intervened in a False Claims Act lawsuit against Infirmary Health System Inc. and related entities IMC-Diagnostic and Medical Clinic  (IMC), Diagnostic Physicians Group P.C. and Infirmary Medical Clinics  (DPG), the Department of Justice announced this week. 

The lawsuit alleges that IMC, in Mobile, Ala., billed Medicare for services referred by physicians belonging to DPG, in violation of the Stark Law and Anti-Kickback Statute. 

The suit also alleges that IMC improperly paid DPG doctors out of funds obtained from Medicare for tests and procedures that those doctors referred to the clinic.  These improper payments, and the resulting submission of false claims to the Medicare program, violated the Stark Law and Anti-Kickback Statute. 

The Stark Law and the Anti-Kickback Statute are intended to ensure that physicians’ medical judgment is not compromised by improper financial incentives.  The Stark Law forbids a clinic or hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the entity, while the Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of services or items covered by federal health care programs, including Medicare. 

“The Stark Law and Anti-Kickback Statute were enacted to prevent financial ties from influencing the level of care provided to patients,” said Kenyen Brown, U.S. Attorney for the Southern District of Alabama. “By bringing cases such as this one against Infirmary Health System, we hope to ensure that precious health care resources are not wasted due to improper financial relationships among health care providers.”

The lawsuit was originally filed by Dr. Christian Heesch, a former physician with DPG, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The act also allows the government to intervene on its own behalf, which the U.S. government has elected to do in this case.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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55 Hospitals Settle Health Fraud Claims for $34M; Whistleblowers to Get $5.5M

Submitted by mma on July 5, 2013
July 5, 2013

Fifty-five hospitals located throughout the United States have agreed to pay the U.S. government over $34 million to settle allegations that the facilities knowingly submitted or caused the submission of false claims to Medicare for kyphoplasty procedures, the U.S. Department of Justice announced this week. 

Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures, often related to osteoporosis.  In many cases, kyphoplasty can be performed safely and effectively as an outpatient procedure without any need for a more costly hospital admission.  The agreements announced today resolve allegations that the settling hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings.   

A sampling of the hospitals involved, and the amounts they settled for, include:

  • Atrium Medical Center, Middletown, Ohio: $4,232,992.50.
  • Cedars Sinai Medical Center, Los Angeles, Calif.: $1,485,846.
  • Mount Sinai Medical Center, Miami, Fla.: $1,846,194.00.
  • Twenty-three hospitals affiliated with HCA Inc., Nashville, Tenn.: $7,145,842.72 (including hospitals located in Florida, Texas, California, Georgia, and more).

The Justice Department has now reached settlements totaling approximately $75 million, with over 100 hospitals, to resolve allegations that they mischarged Medicare for kyphoplasty procedures. 

In addition to today’s settlement, the government previously settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million, to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures.

All but four of the settling facilities announced today were named as defendants in a lawsuit brought by Craig Patrick and Charles Bates, former Kyphon employees, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Patrick and Bates will receive approximately $5.5 million as their share of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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CyTerra Settles Contract Fraud Claims for $1.9M; Whistleblowers to Get $361K

Submitted by mma on July 3, 2013
July 3, 2013

Massachusetts-based CyTerra Corporation has agreed to pay the U.S. government $1.9 million to settle allegations that CyTerra failed to provide the U.S. Army with accurate, complete, and current cost or pricing data for its products, causing the government to pay more than it should have, the Justice Department announced this week.

In 2003, the U.S. Army awarded CyTerra a contract for the production and delivery of AN/PSS-14 hand-held mine detection units.  The contract was modified several times to provide for the production and delivery of additional mine detection units.  The government alleged that, in negotiations concerning three of these contract modifications, CyTerra knowingly failed to provide the Army with the most recent cost or pricing data on the number of labor hours needed to produce a mine detector.  Under the Truth in Negotiations Act, CyTerra was required to provide “accurate, complete and current” cost or pricing data.  The government alleged that if the Army had received such information, it would have negotiated a lower price.         

The lawsuit was originally filed by Kevin Bartczak and Keith Aldrich, former CyTerra executives, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and claim a share of the recovery.  Bartczak and Aldrich will receive $361,000 as their share of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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General Electric Aviation Systems Settles Contract Fraud Claims for $6.58M

Submitted by mma on June 26, 2013
June 26, 2013

Ohio-based General Electric Aviation Systems (GEAS) has agreed to pay $6.58 million to resolve allegations that the company knowingly submitted or caused the submission of false claims in connection with contracts made with the Department of Defense, the U.S. Department of Justice announced today.  GEAS manufactures and sells integrated systems and components for commercial, corporate, military and marine aircraft.

GEAS was contracted to manufacture and deliver to the Navy external fuel tanks for use on the F/A-18 Hornet strike fighter jet, which GEAS manufactured at its plant in Santa Ana, California.  In March 2008, a GEAS-manufactured tank failed government testing, which led to a multi-year investigation by local and federal agencies.  As a result, the United States alleged that GEAS knowingly failed to comply with contract specifications and failed to undertake proper quality control procedures in connection with 641 external fuel tanks it delivered to the Navy between June 2005 and February 2008.

The settlement also resolves allegations that, between June 2010 and June 2011, GEAS knew that it falsely represented to another government contractor that GEAS had performed a complete inspection of 228 drag beams to be used on Army UH-60 Blackhawk helicopters, and that those 228 drag beams conformed to all contract specifications. 

Allegations about GEAS’s misconduct at the Santa Ana facility were originally included in a lawsuit filed by Jeffrey Adler, a former GEAS employee, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows a private citizen with knowledge of fraud against the government to sue on behalf of the government and claim a share of the recovery.  Adler’s share of the settlement has not yet been determined.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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