qui tam

Samsung Electronics America Inc. has agreed to pay $2.3 million to resolve allegations that the company knowingly submitted or caused the submission of false claims for products sold on contracts, in violation of the Trade Agreements Act of 1979 (TAA), the U.S. Department of Justice announced earlier this week.

Multiple Award Schedule (MAS) contracts are awarded by General Service Administration (GSA) to multiple companies supplying comparable products and services.  Once GSA negotiates and awards the contract, any federal agency may purchase under it.  Like many other federal procurement contracts, GSA MAS contracts require the vendor to certify that all products it offers for sale comply with the TAA.  The TAA generally requires the United States to purchase products made in the United States, or another designated country with which the United States has a trade agreement. 

Samsung has authorized resellers who hold GSA MAS contracts.  Samsung certifies to the authorized resellers that Samsung will provide TAA compliant products and the resellers in turn list those products on the resellers’ GSA MAS contracts.  The settlement resolves allegations that Samsung caused resellers of its products to sell items on their GSA MAS contracts in violation of the TAA by knowingly providing inaccurate information to the resellers regarding the country of origin of the goods.  The United States alleges that Samsung represented to the resellers, who in turn represented to federal agencies, that the specified products were made in TAA designated countries, generally Korea or Mexico, when the specified products were in fact manufactured in China, which is not a TAA designated country.

The lawsuit was originally filed by Robert Simmons, a former Samsung employee, under the whistleblower provision of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Simmons’ portion 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.

California-based pharmaceutical distributor McKesson Corporation has agreed to pay $18 million to resolve allegations that the company improperly set temperature monitors used in shipping vaccines under its contract with Centers for Disease Control and Prevention (CDC), the U.S. Department of Justice announced last week.

The government alleged that McKesson failed to comply with the shipping and handling requirements of its vaccine distribution contract with the CDC.  Under the contract, McKesson provided distribution services, receiving vaccines purchased by the government from manufacturers and then distributing the vaccines to health care providers.  The government alleged that the contract required McKesson to ensure that during shipping, the vaccines were maintained at proper temperatures by, among other things, including electronic temperature monitors set to detect when the air temperature in the box reached two degrees Celsius and below or eight degrees Celsius and above.  The government alleged that McKesson failed to set the monitors to the appropriate range and, as a result, knowingly submitted false claims to the CDC for shipping and handling services that did not satisfy its contractual obligations. 

The lawsuit was originally filed by Terrell Fox, a former McKesson employee, under the whistleblower provisions of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Fox’s portion 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.

Community Health Systems (CHS), the nation’s largest operator of acute care hospitals, has agreed to pay $98.15 million to resolve allegations that the company knowingly submitted or caused the submission of false claims to government health care programs, the U.S. Department of Justice announced earlier this week.  One of the company’s affiliated hospitals, Laredo Medical Center (LMC), also allegedly billed Medicare for services in violation of the Stark Law.  The Stark Law prohibits a hospital from submitting claims for patient referrals made by a physician with whom the hospital has an improper financial relationship, and is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives, and is instead based on the best interests of the patient. 

CHS allegedly engaged in a deliberate corporate-driven scheme to increase inpatient admissions of Medicare, Medicaid and the Department of Defense’s (DOD) TRICARE program beneficiaries over the age of 65 who originally presented to the emergency departments at CHS hospitals.  The government further alleged that the inpatient admission of these beneficiaries was not medically necessary and that the care needed by, and provided to, these beneficiaries should have been provided in a less costly outpatient or observation setting. 

In addition, the government alleged that LMC presented false claims to the Medicare program for certain cardiac and hemodialysis procedures performed on a higher cost inpatient basis that should have been performed on a lower cost outpatient basis.  The government also alleged that LMC improperly billed Medicare for services referred to LMC by a physician who was offered a medical directorship at LMC, in violation of the Stark Law.  

As part of the agreement, CHS entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), requiring the company to engage in significant compliance efforts over the next five years.  Under the agreement, CHS is required to retain independent review organizations to review the accuracy of the company’s claims for inpatient services furnished to federal health care program beneficiaries.

The settlement resolves lawsuits filed by Kathleen Bryant, former Director of Health Information Management at CHS’s Heritage Medical Center in Shelbyville, Tennessee; Rachel Bryant, former nurse at CHS’s Dyersburg Hospital in Dyersburg, Tennessee; Bryan Carnithan, former Emergency Medical Services Coordinator at CHS’ Heartland Hospital in Marion, Illinois; Amy Cook-Reska, former coder for CHS’ LMC in Laredo; Sheree Cook, former nurse at CHS’s Heritage Medical Center in Shelbyville; James Doghramji, former internal medicine and emergency room physician at CHS’s Chestnut Hill Hospital in Philadelphia; Thomas Mason, former emergency room physician at Lake Norman Regional Medical Center in Mooresville, North Carolina; Scott Plantz, former emergency room physician at CHS’s Longview Regional Medical Center in Longview, Texas; and Nancy Reuille, former nurse and Supervisor of Case Management at CHS’s Lutheran Hospital in Fort Wayne, Indiana.  The lawsuits were filed under the whistleblower provision of the False Claims Act, which allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Their portion of the settlement has yet to be 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.

Paris-based global financial institution BNP Paribas has agreed to pay $80 million to settle allegations that it knowingly submitted or caused the submission of false claims for payment guarantees issued by the U.S. Department of Agriculture (USDA), the U.S. Department of Justice announced last week.

The United States filed a lawsuit against BNP Paribas in connection with its receipt of payment guarantees under USDA’s Supplier Credit Guarantee (SCG) Program.  The program provided payment guarantees to U.S.-based exporters for their sales of grain and other agricultural commodities to importers in foreign countries.  The program encouraged American exporters to sell American agricultural commodities to foreign importers and covered part of the losses if the foreign importers failed to pay.  The SCG Program regulations provided that U.S. exporters were ineligible to participate in the SCG Program if the exporter and foreign importer were under common ownership or control.

The judgment entered by the court resolves the government’s allegations that BNP Paribas participated in a sustained scheme to defraud the SCG Program.  American exporters and Mexican importers who were under common control improperly obtained SCG Program export credit guarantees for transactions between the affiliated exporters and importers.  In some cases, the underlying transactions were shams and did not involve any real shipment of grain.  BNP Paribas accepted assignment of the credit guarantees from the American exporters, even though it knew that the affiliated exporters and importers were ineligible for SCG Program financing, and a BNP Paribas vice-president, Jerry Cruz, received bribes from the exporters.  When the Mexican importers began defaulting on their payment obligations, BNP Paribas submitted claims to the USDA for the resulting losses.

On Jan. 20, 2012, Cruz pleaded guilty to conspiracy to commit bank fraud, mail fraud and wire fraud, and conspiracy to commit money laundering.  

The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Had there been a whistleblower in this case, he or she would have been eligible to receive up to 30 percent 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.

Alabama-based Infirmary Health System (IHS), two affiliated clinics, and Diagnostic Physicians Group P.C. (DPG) have agreed to pay $24.5 million to settle allegations that they knowingly submitted or cause the submission of false claims to the Medicare program, the U.S. Department of Justice announced earlier this week.

Two IHS affiliated clinics—IMC-Diagnostic and Medical Clinic, in Mobile, and IMC-Northside Clinic, in Saraland, Alabama—allegedly had agreements with DPG to pay the group a percentage of Medicare payments for tests and procedures referred by DPG physicians, in violation of the Stark Law and the Anti-Kickback Statute.  Also named in the lawsuit was Infirmary Medical Clinics P.C. (IMC), an affiliate of IHS that directly owns and operates approximately 30 clinics in the Mobile area, including the two clinics involved in this lawsuit.

The Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives.  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.  The Stark Law forbids a hospital or clinic from billing Medicare for certain services referred by physicians who have a financial relationship with the entity.

IMC allegedly purchased IMC-Diagnostic and Medical Clinic from DPG and agreed to pay DPG a share of the revenues the clinics collected, including Medicare revenues from diagnostic imaging and laboratory tests.  After IMC acquired the IMC-Northside Clinic in 2008, the physicians practicing there joined DPG and entered into an agreement with the same key terms as the earlier agreement with IMC-Diagnostic and Medical Clinic.  The government contended that these payments were illegal kickbacks and constituted a prohibited financial relationship under the Stark Law, and that an attorney for DPG warned employees of both IMC and DPG that the compensation being paid to the physicians likely violated the law.  Nevertheless, the agreements allegedly were neither modified nor terminated for another 18 months.

The lawsuit was originally filed by Dr. Christian Heesch, a former DPG employee, under the whistleblower provision of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Dr. Heesch will receive $4.41 million as his portion 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.