Financial Fraud

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.

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.

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.

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

The allegations arose from a lawsuit that claimed CA Inc, an information technology firm, made false statements and claims in the negotiation and administration of a General Services Administration (GSA) contract.

According to the Department of Justice, this settlement resolves allegations connected to a GSA contract awarded to CA for software licenses and maintenance services.  GSA pre-negotiates prices and contract terms for subsequent orders by federal agencies. A price reduction clause in the GSA contract required CA to provide government customers discounts in line with commercial customers.

Reportedly, this settlement resolves allegations that CA did not fully and accurately disclose its discounting practices to GSA contracting officers.  Specifically, this agreement resolves claims that CA allegedly provided false information about the discounts it gave commercial customers for its software licenses and maintenance services at the time the contract was negotiated in 2002 and was extended in 2007 and 2009. Additionally, the settlement resolves claims that CA violated the price reduction clause in the contract by not providing government customers with additional discounts when commercial discounts improved.

A former CA Software Israel LTD employee and whistleblower, Dani Shemesh, first brought up the allegations in a lawsuit filed under the False Claims Act, which allows Shemesh to receive more than $10 million from the settlement.

“GSA contractors must be honest and forthcoming when doing business with the federal government,” GSA Inspector General Carol Fortine Ochoa said in a statement. “American taxpayers deserve a fair deal.”

A settlement has been reached to resolve False Claims Act allegations against Para-Plus Translations Inc.

The allegations arose from a lawsuit that claimed Para-Plus Translations Inc “purposefully overstated the travel time and mileage incurred by its interpreters” in invoices it sent federal and state governments, according to a US Department of Justice.

This settlement resolves allegations that Para-Plus submitted false claims for payment to various federal and state agencies, including components of the United States Department of Justice.

“As this settlement demonstrates, we will continue to enforce the law to ensure that federal monies are used to benefit the public,” said Acting U.S. Attorney Song.

Para-Plus will pay the United States Federal Government $879,000 within 10 business days from the date of the last signature on the settlement agreement on November 23, 2016, with the balance of $621,000 to be paid out to the States of Delaware and New Jersey over five years in quarterly payments of $32,000, plus interest at 3.5% per annum.

The settlement was the result of a 2014 whistleblower lawsuit filed by Kimberly Martin, a former employee in Para-Plus’ billing department. The whistleblower will receive 22% of each payment received by the United States Government, Delaware, and New Jersey.

A settlement has been reached to resolve False Claims Act allegations against Jackson State University.

The allegations arose from a lawsuit that claimed Jackson State University mismanaged National Science Foundation (NSF) Grants.

According to the Department of Justice, allegedly between June 1, 2006 and September 30, 2011, Jackson State University submitted claims and/or expended funds under NSF Grants and in so doing, impliedly certified that every claim and/or expenditure was supportable, allocable, and allowable and that Jackson State University would maintain adequate records to support these claims and expenditures. In 2012, an audit of the NSF Grants performed under contract for the NSF Office of Inspector General ("NSF-OIG") identified salary and non-salary expenditures that were unallowable, not allocable, and/or had insufficient, inadequate and/or no supporting documentation. A subsequent NSF-OIG investigation determined that, in preparation for the audit, and subsequently in response to the preliminary audit findings, Jackson State University employees fabricated time and effort reports and provided them to the auditors, and in some instances presented inadequate and/or no supporting documentation.

Reportly, as part of the settlement, Jackson State University has also agreed to take specific steps to prevent these events from reoccurring by instituting a compliance program, which includes a comprehensive training program on time and effort reporting and other aspects of federal grants management, for a five-year period beginning in February.

"Recipients of federally-funded grants must adhere to the regulations applicable to those grants and accurately report the required information. This settlement sends a strong signal to grant recipients that failure to follow the applicable requirements may lead to significant financial consequences," stated Gregory K. Davis, United States Attorney for the Southern District of Mississippi.

A settlement has been reached to resolve False Claims Act allegations against Monaco Enterprises Inc.

The allegations arose from a lawsuit that claimed Monaco Enterprises Inc overbilled military bases and other government buildings for installation of fire safety equipment.

The settlement resolves claims that Monaco Enterprises falsely billed the government for work it never provided, hid costs from contracting officers and inflated others without requiring the company to admit wrongdoing.

The whistleblowers, former employees of Monaco Enterprises, Jason Voss, Drake Osborn and Lisa Osborn, and Maximillian Salazar III brought the suits forward alleging that for years Monaco Enterprises engaged in numerous practices designed to defraud the federal government involving Monaco’s fire safety services at military bases throughout the country.

In October 2015, the government partially intervened alleging that Monaco Enterprises routinely overcharged government agencies by 35 % or more for products Monaco Enterprises falsely claimed to have manufactured.

The whistleblowers who originally filed the case will receive between 15-25 % of the total settlement.

A settlement has been reached to resolve False Claims Act allegations against Total Call Mobile LLC.

The allegations arose from a lawsuit that claimed Total Call Mobile LLC defrauded the Lifeline Program, a federal government subsidy program that offers discounted mobile phone services to eligible low-income consumers.

According to the Department of Justice, Total Call Mobile LLC, with the knowledge and involvement of its affiliate, co-defendant LOCUS TELECOMMUNICATIONS LLC, and their shared corporate parent, co-defendant KDDI AMERICA INC, knowingly submitted false claims for federal payments by seeking reimbursement for consumers who did not meet Lifeline eligibility requirements.

Specifically, Total Call Mobile repeatedly used the same eligibility proof to enroll multiple consumers, altering identification or eligibility proof documentation, deliberately altering the way consumer information was input to avoid the detection of duplicate subscriber enrollments, and submitting false consumer addresses and social security numbers. Even though the Company's managers were aware of fraudulent practices, Total Call Mobile continued to approve enrollments and request government reimbursement.

As part of the settlement, Total Call Mobile LLC admitted and accepted responsibility for its misconduct, including seeking reimbursement for tens of thousands of ineligible consumers, and agreed to no longer participate in the Lifeline Program. 

Under the settlement, defendants are required to pay approximately $22.54 million to the United States, and to forego payment of approximately $7.46 million in Lifeline reimbursements claimed by Total Call Mobile but held by the Government pursuant to a prior FCC Order.

A settlement has been reached to resolve Foreign Bribery Schemes in Asia and Africa against General Cable Corporation.

The allegations arose from a lawsuit that claimed General Cable Corporation engaged in improper payments to government officials in Angola, Bangladesh, China, Indonesia and Thailand to corruptly gain business in violation of the Foreign Corrupt Practices Act (FCPA).

“General Cable paid bribes to officials in multiple countries in a scheme that involved a high-level executive of the company and resulted in profits of more than $50 million worldwide,” said Assistant Attorney General Caldwell.  “But General Cable also voluntarily self-disclosed this misconduct to the government, fully cooperated and remediated.  This resolution demonstrates the very real upside to coming in and cooperating with federal prosecutors and investigators. It also reflects our ongoing commitment to transparency.”

According to the U.S. Department of Justice, General Cable Corporation acknowledged, some parent-level and subsidiary-level employees, including executives, knew that some of its foreign subsidiaries used third-party agents and distributors to make corrupt payments to foreign officials in order to obtain and retain business. In one case the foreign subsidiary made corrupt payments directly to foreign officials.  The corrupt conduct began in 2002.  In 2011, when employees from a General Cable subsidiary expressed concerns to regional and parent-level executives that commission payments were being used for improper purposes, including potentially bribery, General Cable nevertheless failed to implement and maintain a system of internal accounting controls designed to detect and prevent such corruption and otherwise illegal payments. 

Between 2002 and 2013, General Cable subsidiaries paid approximately $13 million to third-party agents and distributors, a portion of which was used to make unlawful payments to obtain business, ultimately netting the company approximately $51 million in profits.

General Cable entered into a non-prosecution agreement and agreed to pay a criminal penalty of $20,469,694.80 to resolve the matter.

Source: https://www.justice.gov/

A jury awarded $20 million to Trish Williams, a former Wyndham timeshare sales representative, who was wrongfully terminated for reporting time share fraud on the elderly by the world’s largest timeshare company.

According to the plaintiff, Trish Williams, who reported back in 2010, that elderly customers were being defrauded by Wyndham salespeople, who were opening and maxing out credit cards without their knowledge and lying about reducing interest rates, maintenance fees and the ability to obtain rental income from their timeshares.

Allegedly, Wyndham employees took part in high pressure sales tactics involving deliberate lies and misrepresentations to get individuals to buy more timeshare "points."

Some practices that employees were involved in included "TAFT" days, which stands for "Tell Them Any F@#*ing Thing" days, in which employees would say anything to make a sale as long as they didn't put it in writing.

The plaintiff also revealed an illegal, industry-wide practice of falsely representing that if owners spend enough money, Wyndham would buy back the timeshare at full value at the owner’s request.