Financial Fraud

$102 Million Settlement reached to resolve False Claims Act Allegations against BP Energy Company

Settlement Amount: 
$102,000,000

A settlement has been reached to resolve False Claims Act allegations against BP Energy Company.

The allegations arose from a lawsuit that claimed BP Energy Company overcharged the state of California for natural gas between 2003 and 2012.

Allegedly, BP Energy regularly violated contracts to provide gas for numerous state agencies and other governments by exceeding the agreed-upon price cap, and then concealed the overcharges by providing false and misleading information, state Attorney General Xavier Becerra said.

Reportedly, BP Energy was overcharging local jurisdictions, public agencies and universities for natural gas over the course of a decade by selling the state “exotic financial derivative products.”

According to the lawsuit, BP Energy overcharged the state at least $150 million to $300 million, and the state sought triple damages. California no longer has natural gas contracts with BP.

 “BP thought it could get away with providing false and misleading information in order to line its own pockets,” Becerra said. “Today, we send a clear message: cheating the People of California will cost you more than it’s worth.”

These allegations were brought forward by a former BP employee, Chris Schroen, accusing the oil company of quoting and charging prices above a contractual cap.

Sort Amount: 
102000000.00
Company: 
BP Energy Company

$2.6 Million Settlement reached to resolve False Claims Act Allegations against Triple Canopy Inc

Settlement Amount: 
$2,600,000

A settlement has been reached to resolve False Claims Act allegations against Triple Canopy Inc.

The allegations arose from a lawsuit that claimed Triple Canopy Inc submitted false claims for payment to the Department of Defense for unqualified security guards stationed in Iraq.

According to the Department of Justice, allegedly Triple Canopy knowingly billed the United States for security guards who could not pass contractually required firearms proficiency tests. The tests were designed by the Army to ensure that the guards hired to protect U.S. and allied personnel were capable of firing their assigned weapons safely and accurately. In addition, allegedly Triple Canopy concealed the guards’ inability to satisfy the firearms testing requirements by creating false test scorecards that Triple Canopy was required to maintain for government review, in an effort to induce the government to pay for the unqualified guards.   

Triple Canopy contracts with the government to provide private security protection forces for U.S. government and allied personnel abroad. The settlement stems from a 2009 contract for security services at Al Asad Airbase in Iraq.

Reportedly, the government’s claims were based on a whistleblower suit filed by a former employee of Triple Canopy in 2011. The whistleblowers' share of the settlement will be $500,000.

 “Contractors must be held accountable for their actions, especially when the safety of government personnel is at stake,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, where the suit was filed. “This settlement should remind contractors of the high value we place on safeguarding our personnel abroad.”

Sort Amount: 
2600000.00
Company: 
Triple Canopy Inc

Over $3 Million Settlement reached to resolve False Claims Act Allegations against New York Contractors

Settlement Amount: 
$3,000,000

A settlement has been reached to resolve False Claims Act allegations against Zoladz Construction Company Inc  (ZCCI), Arsenal Contracting LLC (Arsenal), and Alliance Contracting LLC (Alliance), along with two owners, John Zoladz and David Lyons.

The allegations arose from a lawsuit that claimed Zoladz Construction Company Inc (ZCCI), Arsenal Contracting LLC (Arsenal), and Alliance Contracting LLC (Alliance), along with two owners, John Zoladz and David Lyons of improperly obtaining federal set-aside contracts designated for service-disabled veteran-owned (SDVO) small businesses.

Only small business owned and operated by service-disabled veterans are eligible to receive SDVO set-aside contracts. 

According to the government, allegedly ZCCI recruited a service-disabled veteran to serve as the purported owner and manager of Arsenal, which was merely a front for securing SDVO set-aside contracts.  Arsenal then subcontracted nearly all of the work under those SDVO contracts to Alliance and ZCCI.  Additionally, the owners allegedly made false representations to the U.S. Department of Veterans Affairs regarding Arsenal’s eligibility for SDVO contracts.

“Contracts are set aside for service-disabled veteran-owned small businesses so to afford veterans with service-connected disabilities the opportunity to participate in federal contracting and gain valuable experience to help them compete for future economic opportunities,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “Every time an ineligible contractor knowingly pursues and obtains such set-aside contracts, they are cheating American taxpayers at the expense of service-disabled veterans.”

The allegations were brought forward by a whistleblower, who will receive $450,000 as a result of the settlement.

Sort Amount: 
3000000.00
Company: 
Zoladz Construction Company Inc, Arsenal Contracting LLC and Alliance Contracting LLC

$2.5 Million Settlement reached to resolve False Claims Act Allegations against Alaska Department of Health and Social Services

Settlement Amount: 
$2,500,000

A settlement has been reached to resolve False Claims Act allegations against Alaska Department of Health and Social Services.

According to the Justice Department, Alaska Department of Health and Social Services (ADHSS) has agreed to pay the United States $2,489,999 to resolve allegations that it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamps Program.

A consultant, who advised ADHSS disputes the federal claims about the program that provides financial assistance to low-income families so they can buy nutritious food.

Individuals in the program receive an electronic benefit transfer card that can be used at participating stores to buy eligible food such as fruits, vegetables, whole-grain products and other items.  Since 2010, SNAP has served on average more than 45 million Americans per month, and provided more than $71 billion annually.

“This settlement reflects the Justice Department’s commitment to ensuring that taxpayer funds are spent appropriately so that the public can have confidence in the integrity of programs like SNAP,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.

Reportedly, the settlement resolves allegations that ADHSS, beginning in late 2009, contracted with a consultant known as Julie Osnes Consulting to provide advice and recommendations designed to lower its SNAP quality control error rate. The United States alleged that Osnes Consulting’s recommendations, as implemented by ADHSS, injected bias into ADHSS’s quality control process and resulted in ADHSS submitting inaccurate quality control data and information to USDA and receiving performance bonuses for fiscal years 2010, 2011, 2012, and 2013, that it should not have received.

"Alaska terminated its contract with Osnes Consulting in early 2015 and has reviewed and changed its quality control practices," stated Department of Law spokeswoman Cori Mills.

Sort Amount: 
2500000.00
Company: 
Alaska Department of Health and Social Services

$108 Million Settlement reached to resolve False Claims Act Allegations against Wells Fargo

Settlement Amount: 
$108,000,000

A settlement has been reached to resolve False Claims Act allegations against Wells Fargo.

On August 4, 2017, Wells Fargo announced that it would pay the U.S. government $108 million after settling a lawsuit that claimed it had charged veterans hidden fees to refinance their mortgages.

The allegations arose from a lawsuit that claimed Wells Fargo charged veterans hidden fees when refinancing mortgages and hid the fees when veterans applied for federal loan guarantees.

The whistleblower lawsuit was filed by Georgia mortgage brokers Victor Bibby and Brian Donnelly in 2006, who sought to recoup money the government and taxpayers lost when those loans went into default. These loans were made under a Department of Veterans Affairs program.

"We're glad it's over, at least as to Wells Fargo," according to whistleblowers, Victor Bibby.

Reportedly, a Wells Fargo spokesman stated that the bank changed its methods for handling veterans' refinancing loans several years ago to fix the alleged problems and that the company settled the lawsuit to "put the matter behind us."

Allegedly, in 2011, the bank settled a similar class-action lawsuit in Georgia claiming misconduct in refinancing VA-backed loans.

"More than six years ago, when questions about fees on Veterans Administration refinance loans were raised, we resolved those concerns by improving our internal controls and made compensation available to VA customers who closed a refinance before that time," said Tim Sloan, Wells Fargo's chief executive officer. "Settling this longstanding lawsuit allows us to put the matter behind us and continue to focus on serving customers and rebuilding trust with our stakeholders. We are committed to serving the financial health and well-being of veterans, and we will continue to honor that commitment now and in the future."

Under the federal whistleblowers law, known as the Federal False Claims Act, people with knowledge of wrongdoing by a company can sue on behalf of the government and collect up to 30 percent of any resulting settlement or jury award.

Sort Amount: 
108000000.00
Company: 
Wells Fargo

$4.6 Million Settlement reached to resolve False Claims Act Allegations against Energy & Process Corporation

Settlement Amount: 
$4,600,000

A settlement has been reached to resolve False Claims Act allegations against Energy & Process Corporation.

The allegations arose from a lawsuit that claimed Energy & Process Corporation (E&P) of Tucker, Georgia, knowingly failed to perform required quality assurance procedures and supplied defective steel reinforcing bars (rebar) in connection with a contract to construct a Department of Energy (DOE) nuclear waste treatment facility.

According to the Department of Justice, allegedly Department of Energy (DOE) paid Energy & Process Corporation (E&P) a premium to supply rebar that met stringent regulatory standards for the Mixed Oxide Fuel Fabrication and Reactor Irradiation Services facility in the DOE’s Savannah River site near Aiken, South Carolina, but that E&P failed to perform most of the necessary quality assurance measures, while falsely certifying that those requirements had been met. In addition, allegedly one-third of the rebar supplied by E&P and used in the construction was found to be defective.

Reportedly, E&P replaced some of the defective rebar. The settlement award will also go to the replacement costs incurred by E&P.

“Compliance with contract requirements is expected by all who contract with the U.S. government, but is especially critical in connection with the construction of a nuclear facility,” said Acting Assistant Attorney General Chad A. Readler said in a statement.

These allegations were brought forward by Deborah Cook, a former employee of the prime contractor that subcontracted with E&P in the course of building the DOE facility. The whistleblowers' share of the settlement has not been determined.

Sort Amount: 
4600000.00
Company: 
Energy & Process Corporation

$7 Million Settlement reached to resolve False Claims Act Allegations against Wisconsin Department of Health Services

Settlement Amount: 
$6,991,905

A settlement has been reached to resolve False Claims Act allegations against Wisconsin Department of Health Services.

The allegations arose from a lawsuit that claimed the Wisconsin Department of Health Services (WDHS) violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP), formally known as the Food Stamp Program.

According to the Department of Justice, as part of the settlement, WDHS admitted that, beginning in 2008, it utilized the services of Julie Osnes Consulting, a quality control consultant, to review the error cases identified by WDHS quality control workers. Allegedly, WDHS further admitted that based on instructions from Julie Osnes Consulting it implemented several improper and biased quality control practices, including: (1) finding a basis for dropping error cases from the review by discouraging beneficiaries from cooperating with information requests and pursuing unnecessary information; (2) selectively applying requirements and policies to overturn and reduce errors; (3) asking beneficiaries leading questions to obtain desired answers to eliminate error potential; (4) arbitrating any and all differences with USDA; (5) subjecting error cases to additional scrutiny and quality control casework with the goal of overturning an error or dropping a case; and (6) omitting verifying information in documents made available to USDA.

Reportedly, these practices improperly decreased WDHS’s reported error rate, and as a result, WDHS earned performance bonuses for 2009, 2010, and 2011 to which it was not entitled.

 "This settlement reflects the Justice Department’s commitment to ensuring that taxpayer funds are spent appropriately so that the public can have confidence in the integrity of programs like SNAP,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.

Sort Amount: 
6991900.00
Company: 
Wisconsin Department of Health Services

$7.1 Million Settlement reached to resolve False Claims Act Allegations against Virginia Department of Social Services

Settlement Amount: 
$7,150,436

A settlement has been reached to resolve False Claims Act allegations against Virginia Department of Social Services (VDSS).

The allegations arose from a lawsuit that claimed Virginia Department of Social Services (VDSS) violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP), formally known as the Food Stamp Program.

According to the Department of Justice, as part of the settlement, VDSS allegedly admitted that, beginning in 2010, it retained Julie Osnes Consulting, a quality control consultant, to reduce its SNAP benefits determination error rate by training VDSS quality control workers to “use whatever means necessary” to find a benefits decision “correct” rather than finding an error. Allegedly, VDSS also admitted that if its quality control staff “could not find a way to make a benefits decision correct,” they were instructed to “find a reason to ‘drop’ the case, or eliminate it from the sample.” VDSS allegedly acknowledged that this outcome-driven method, as implemented by VDSS between 2010 and 2015, “injected bias into the case review process” because it was designed to lower VDSS’s reported error rate by falsely reporting errors as “correct” or eliminating them from the sample. Through its use of these biased methods, VDSS was improperly awarded USDA performance bonuses for 2011, 2012, and 2013.

In addition, VDSS allegedly admitted that VDSS quality control workers did not want to use the methods proposed by Julie Osnes Consulting because they believed the methods lacked integrity, injected bias into the quality control process, and violated USDA requirements, and that they communicated these concerns to their supervisors. VDSS admitted that the former VDSS quality control manager pressured and intimidated these employees to force them to adopt these methods, including, according to these employees, threatening termination, providing negative performance reviews, taking away teleworking and flexible scheduling privileges, and engaging in other forms of harassment and retaliation.

Reportedly, VDSS had taken certain corrective actions beginning in 2015, including terminating its use of the improper quality controls methods devised by Julie Osnes Consulting.

Sort Amount: 
7150440.00
Company: 
Virginia Department of Social Services

$19.8 Million Settlement reached to resolve allegations of Drug Overcharges to the Department of Veterans Affairs against Sanofi Pasteur

Settlement Amount: 
$19,800,000

A settlement has been reached to resolve allegations of drug overcharges to the Department of Veterans Affairs against Sanofi Pasteur.

The allegations arose from a lawsuit that claimed Sanofi Pasteur incorrectly calculated drug prices and thereby overcharged the U.S. Department of Veterans Affairs (VA) for drugs under two contracts between 2002 and 2011.

The Veterans Health Care Act mandates that pharma companies charge the so-called federal ceiling price (FCP) for their drugs. The FCPs for certain drugs are exactly what Sanofi Pasteur miscalculated in this case.

“It is important that pharmaceutical companies provide complete, accurate, and current information to the VA about the pricing of their drugs,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice will ensure that pharmaceutical companies follow the rules for drug pricing when selling to the government.”

Sanofi Pasteur has paid millions to resolve False Claims Act allegations. In 2012, the company paid over $109 million in a False Claims Act investigation regarding its knee injection, Hyalgan. Allegedly, the company used free samples as kickbacks to lower the drug’s effective price, to avoid cutting its actual invoiced price and trigger lower reimbursements.

Reportedly, in addition to paying approximately $19.8 million, Sanofi Pasteur has agreed that it will not pursue claims for reimbursement for sales where it contends its error in calculating the FCP resulted in a lower price to the VA.

Sort Amount: 
19800000.00
Company: 
Sanofi Pasteur

$1.8 Million Settlement reached to resolve False Claims Act Allegations against Charles River Laboratories International Inc

Settlement Amount: 
$1,800,000

A settlement has been reached to resolve False Claims Act allegations against Charles River Laboratories International Inc.

The allegations arose from a lawsuit that claimed Charles River Laboratories International Inc improperly charged for labor and other associated costs that were not actually provided on certain National Institutes of Health contracts.

 “Contractors are expected to deal fairly with federal agencies when receiving taxpayer funds,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice will continue to ensure that contractors spend taxpayer dollars appropriately and that those who do not are held accountable.”

The company holds contracts for services related to the development, maintenance and distribution of colonies of animals, and the provision of laboratory animals.

According to the Justice Department, the company billed for labor and associated costs of employees at facilities in Raleigh, North Carolina, and Kingston, New York, but these employees didn't render the services claimed.

Charles River revealed the improper billing to the Department of Justice and the Department of Health and Human Services. The company stated that it has cooperated to ensure proper repayment and resolution.

Sort Amount: 
1800000.00
Company: 
Charles River Laboratories International Inc

Pages

Subscribe to RSS - Financial Fraud
Go to top