qui tam

The government has filed suit under the False Claims Act against Derish M. Wolff and Salvatore J. Pepe, respectively the former CEO and CFO of Louis Berger Group Inc. (LBG), for conspiring to overbill the U.S. Agency for International Development (USAID) and other government agencies for costs incurred performing reconstruction contracts in Afghanistan, Iraq, and other countries, the U.S. Department of Justice announced last month.

The government’s complaint alleges that Wolff and Pepe designed and directed various accounting schemes that resulted in LBG billing the government for indirect overhead costs at inflated rates.  According to the complaint, for example, Wolff and Pepe shifted portions of salaries of LBG executives and accounting personnel from contracts paid for by foreign and state governments and private entities to contracts paid for by the United States.  Wolff and Pepe allegedly certified the false rates and submitted them to the government in annual financial reports. 

The United States resolved criminal and civil claims against LBG arising from this conduct on Nov. 5, 2010.  At that time, LBG entered into a Deferred Prosecution Agreement and paid $50.6 million to resolve False Claims Act allegations.  Pepe pleaded guilty on that date to a charge of conspiracy to defraud the government and was later sentenced to one year probation.  Wolff pleaded guilty to the same charge on Dec. 12, 2014, and was later sentenced to 12 months of home confinement and required to pay a $4.5 million fine for his role in the scheme.  The complaint filed today asserts civil claims against Wolff and Pepe.

The United States filed its complaint in a lawsuit originally brought under the qui tam, or whistleblower, provisions of the False Claims Act, by Harold Salomon, an LBG accountant from March 2002 to October 2005.  Under the Act, a private citizen can sue on behalf of the United States and share in any recovery.  The United States is also entitled to intervene in the lawsuit, as it has done 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.

Evercare Hospice and Palliative Care has agreed to pay $18 million to settle allegations that it submittedor caused the submission of false claims to federal health care program Medicare, for hospice care for patients who were not eligible because they were not terminally ill, the U.S. Department of Justice announced yesterday.  Evercare, now known as Optum Palliative and Hospice Care, is a Minnesota-based provider of hospice care in Arizona, Colorado and other states across the United States.

Hospice care is special end-of-life care for terminally ill patients intended to comfort the dying.  When a terminally ill Medicare patient elects hospice, Medicare no longer covers traditional medical care designed to improve or heal the patient.  Only Medicare patients who have a life expectancy of six months or less are considered terminally ill and eligible for the Medicare hospice benefit. 

This settlement resolves a lawsuit brought by the government alleging that Evercare knowingly submitted or caused to be submitted false claims to Medicare for hospice care for Medicare patients who were not eligible for the Medicare hospice benefit because Evercare’s medical records did not support that they were terminally ill.  The government’s complaint alleged that Evercare’s business practices were designed to maximize the number of patients for whom it could bill Medicare without regard to whether the patients were eligible for and needed hospice.  These business practices allegedly included discouraging doctors from recommending that ineligible patients be discharged from hospice and failing to ensure that nurses accurately and completely documented patients’ conditions in the medical records. 

The allegations resolved by this settlement arose from whistleblower lawsuits initially filed by former employees of Evercare under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery.  The Act allows the United States to intervene in the lawsuits, which it did in this case.  The share to be awarded in this case 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.

Florida cardiologist Dr. Asad Qamar and his practice, the Institute of Cardiovascular Excellence (ICE), will pay $2 million, plus release any claim to $5.3 million in suspended Medicare funds, to resolve a lawsuit alleging that they improperly billed Medicare, Medicaid and TRICARE for medically unnecessary procedures and paid kickbacks to patients by waiving Medicare copayments irrespective of financial hardship, the U.S. Department of Justice announced yesterday.  Dr. Qamar also agreed to a three-year period of exclusion from participating in any federal health care program followed by a three-year   Integrity Agreement with the Department of Health and Human Services Office of the Inspector General (HHS-OIG). 

The settlement resolves the government’s lawsuit claiming that Dr. Qamar and ICE billed Medicare, Medicaid and TRICARE for excessive, medically unnecessary and inadequately documented peripheral artery interventional services and related procedures.  Many of the cardiovascular procedures for which Dr. Qamar and ICE billed Medicare and the other programs were not indicated by patients’ medical histories or records, or the severity of the patients’ symptoms. 

The government also alleged that to help facilitate this false billing scheme, Dr. Qamar and ICE routinely and indiscriminately waived the 20 percent Medicare copayment, irrespective of the patient’s financial need.  Medicare copayments assure that patients have an incentive to be smart healthcare consumers and avoid unnecessary procedures.  By waiving the required copayments indiscriminately, Dr. Qamar and ICE induced patients to agree to unnecessary and invasive procedures and other services.

The allegations resolved by today’s settlement were originally raised in two lawsuits filed pursuant to the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery.  The False Claims Act also permits the government to intervene in such lawsuits, as it has done in these cases.  The relators Dr. Robert A. Green and Ms. Holly A. Taylor will receive $1,327,721 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.

Genentech Inc. and OSI Pharmaceuticals LLC have agreed to collectively pay $67 to resolve allegations that the pharmaceutical companies knowingly submitted or caused the submission of false claims in connection with misleading statements about the effectiveness of the drug Tarceva in treating non-small cell lung cancer, the U.S. Department of Justice announced yesterday.  Genentech and OSI Pharmaceuticals co-promote Tarceva, which is approved to treat certain patients with non-small cell lung cancer or pancreatic cancer.  

The settlement resolves allegations that Genentech and OSI Pharmaceuticals made misleading representations to physicians and other health care providers about the effectiveness of Tarceva to treat certain patients with non-small cell lung cancer, when there was little evidence to show that Tarceva was effective to treat those patients unless they also had never smoked or had a mutation in their epidermal growth factor receptor, which is a protein involved in the growth and spread of cancer cells.

As a result of the $67 million settlement, the federal government will receive $62.6 million and state Medicaid programs will receive $4.4 million.  The Medicaid program is funded jointly by the state and federal governments.

The settlement resolves allegations filed in a lawsuit by former Genentech employee Brian Shields, in federal court in San Francisco.  The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  Shields will receive approximately $10 million.

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.

The United States has filed a complaint in the U.S. District Court for the District of Columbia against Guild Mortgage Company, alleging that the company knowingly submitted or caused the submission of false claims to the federal government by improperly originating and underwriting mortgages insured by the Federal Housing Administration (FHA), the U.S. Department of Justice announced last week.  Guild is a mortgage lender headquartered in San Diego, California.

Guild participated in the FHA insurance program as a direct endorsement (DE) lender.  As a DE lender, Guild had the authority to originate, underwrite and certify mortgages for FHA insurance.  If a DE lender such as Guild approves a mortgage loan for FHA insurance and the loan later defaults, the U.S. Department of Housing and Urban Development (HUD), FHA’s parent agency, is responsible for the losses resulting from the defaulted loan.  Under the DE lender program, neither the FHA nor HUD reviews the underwriting of a loan before it is endorsed for FHA insurance.  HUD therefore relies on DE lenders to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance and DE lenders must certify that every loan endorsed for FHA insurance is underwritten according to the applicable FHA standards.

The government’s complaint alleges that Guild knowingly submitted, or caused the submission of, claims for hundreds of improperly underwritten FHA-insured loans.  The complaint further alleges that Guild grew its FHA lending business by ignoring FHA rules and falsely certifying compliance with underwriting requirements in order to reap the profits from FHA-insured mortgages.  For example, Guild allegedly allowed underwriters to waive compliance with FHA requirements when underwriting a loan.  Additionally, Guild used unqualified junior-underwriters who did not have a DE certification to waive mandatory conditions on higher risk loans where HUD required underwriting only by highly trained DE underwriters.

The government’s complaint further alleges that Guild’s senior management focused on growth and profits and ignored quality.  Guild conducted at least 125 branch audits in which almost 40 percent resulted in either a qualified rating or unsatisfactory rating.  A qualified rating was defined as having a “significant number of findings, and/or findings noted that have more serious impact or risk to Guild,” or “Knowledge of procedures and controls; however, they appear to be inefficient.”  An unsatisfactory rating was defined as one where “serious concerns were noted: lack of knowledge, procedures, and/or controls in branch.”  The complaint alleges that, through Guild’s quality control reviews, significant defects were found in over 20 percent of the FHA loans reviewed and over half the loans had either significant or moderate defects.  Significant defects included fraud, misrepresentation and other serious findings while moderate defects included not following guidelines.  However, Guild did not calculate or distribute any error rate during the relevant time period, thus management was not presented with these findings.  Additionally, Guild did not even distribute any of the quality control findings to management.  As a result, Guild management often did not review or remediate findings from quality control audits.  In the quarters where Guild management actually did review quality control findings, it did so almost a year after the loans closed and failed to timely remediate any identified problems.  When Guild finally began addressing the quality of its FHA underwriting, Guild’s head of quality control pointed out the ineffectiveness of its past efforts at addressing loan quality:  “I’m not optimistic about training reminders and individual follow-ups being all that effective.”

The government’s complaint alleges that as a result of Guild’s knowingly deficient mortgage underwriting practices, HUD has already paid tens of millions of dollars of insurance claims on loans improperly underwritten by Guild, and that there are many additional loans improperly underwritten by Guild that are currently in default and could result in further insurance claims on HUD.  For example, the government’s complaint identifies a mortgage loan that was improperly underwritten in violation of HUD requirements, causing the borrower to default and HUD to pay the loss on the loan.  Specifically, Guild failed to verify the borrower’s prior rental payments, overstated the borrower’s income, failed to develop a credit history for the borrower who had no credit score, exceeded FHA’s qualifying debt to income ratio without determining whether certain compensating factors were present, and failed to identify the source of a large deposit made to the borrower’s account.  The underwriter at Guild improperly waived multiple conditions and allowed an unauthorized junior underwriter to do the same for other conditions.  In sworn testimony, the Guild underwriter admitted the loan failed to comply with FHA underwriting requirements.

The lawsuit was brought under the qui tam, or whistleblower, provisions of the False Claims Act by a former employee of Guild.  Under the act, a private party may bring suit on behalf of the United States and share in any recovery.  The government may intervene in the case, as it has done here.  The False Claims Act allows the government to recover treble damages and penalties from those who violate it.

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.