United States

The United States has intervened in a lawsuit and filed a complaint against H. Ted Cain, Julie Cain, Corporate Management Inc, and Stone County Hospital Inc for submitting false claims to the Medicare program by knowingly charging excessive and ineligible expenses from 2002 to the present.  

The government’s complaint alleges that the Cains as well as the hospital and the management company abused the special Medicare rules for rural hospitals.  In particular, the government contends that they claimed to be serving the hospital in various management and directorship positions but in fact did little of the work for which the hospital paid them and any work they did duplicated work performed by the hospital and the management company staff, which were also paid by the hospital.  The government also contends that Ted Cain improperly claimed the expenses for his personal luxury automobiles on the hospital’s cost reports and his management company wrongfully charged to the hospital work that he did at his other businesses.

A settlement has been reached in a whistleblower class action lawsuit brought against Science Applications International Inc. (SAIC); its subcontractor, Applied Enterprise Solutions LLC (AES); AES CEO Dale Galloway; and former government employees Stephen Adamec and Robert Knesel. They are accused of submitting or causing the submission of false claims and conspired to submit such claims under a contract with the General Services Administration (GSA).

According to the settlement details,  SAIC will pay $20,400,000 and AES and Dale Galloway will pay $2,166,000. Adamec and Knesel are paying $110,000. The whistleblower will receive a $560,000 share of the recovery and was previously agreed to during the previous settlement of $2,000,000 with Lockheed Martin.

The contract in questions was to provide support services for the National Center for Critical Information Processing and Storage (NCCIPS) at the NAVO MSRC at the John C. Stennis Space Center in Hancock County, Miss. GSA awarded the NCCIPS task order in April 2004 to Science Applications International Corporation (SAIC), which teamed with Lockheed Martin and Applied Enterprise Solutions (AES) to perform under the task order. SAIC was paid a total of $115 million under the contract, of which Lockheed Martin was paid $2 million according to the terms of its subcontract with SAIC.

The case, filed in May 2009, alleged that prior to the issuance, and once the NCCIPS solicitation had been publicized, that then government employees, Stephen Adamec and Robert Knesel, conspired with Lockheed Martin, Galloway, SAIC and AES to ensure that SAIC and its teaming partners were awarded the task order by (a) sharing non public, advance procurement information with the SAIC team that was not provided to other potential bidders; (b) sharing information about the solicitation with the SAIC team before providing that information to other bidders; and choosing a type of contract and putting language in the solicitation in order to bias the selection process to favor the SAIC team.

A settlement has been reached to resolve False Claims Act allegations against Sandia Corporation who is accused of violating the Byrd Amendment and the False Claims Act with the improper use of federal funds.

The allegations include using federal funds for activities related to lobbying Congress and federal agencies to obtain a renewal of its Management and Operating (M&O) Contract with the Department of Energy’s (DOE’s) National Nuclear Security Administration (NNSA) to operate the Sandia National Laboratories (SNL).  Sandia is headquartered in Albuquerque, New Mexico, and is a wholly-owned subsidiary of Lockheed Martin Corporation (LMC).

Between 1993 and the present, NNSA contracted with Sandia to manage and operate the SNL, a government-owned, contractor-operated laboratory that is part of the NNSA’s nuclear weapons complex, with its main facilities located in Albuquerque and Livermore, California.  Between 2008 and 2012, Sandia allegedly used federal funds to support activities to lobby Congress and other federal officials to receive a non-competitive extension of the M&O Contract in violation of a federal law known as the Byrd Amendment, which prohibits the use of federal funds for lobbying.

A settlement has been reached in a whistleblower class action lawsuit brought against Baptist Health, which owns four Jacksonville hospitals, Memorial Hospital, Specialty Hospital, Lake City Medical Center, Orange Park Medical Center, University of Florida Health Jacksonville, and Century Ambulance Service Inc. 

The whistleblower will receive a $1.2 million share of the recovery.

According to the settlement terms, Baptist Health will pay $2.89 million; Memorial Hospital, Specialty Hospital, Lake City Medical Center and Orange Park Medical Center will pay a combined $2.37 million; University of Florida Health Jacksonville will pay $1 million; and Century will pay $1.25 million.

The case, filed in 2011, alleged that the hospitals routinely ordered ambulance transfers via Century that were medically suspect, costing Medicare, Medicaid, Tricare and the Federal Employees Health Benefits Program millions in unnecessary billings. Additionally, the complaint claimed that the hospitals routinely ordered life support ambulance transfers that were medically unnecessary. In association with this alleged healthcare fraud, Century was accused of knowingly up-coding claims from basic to advanced life support. Century was also accused of transporting patients unnecessarily and needlessly driving patients to their own homes as if it were an emergency.

A settlement has been reached in a whistleblower class action lawsuit brought against Lockheed Martin Inc who is accused of submitting or causing the submission of false claims and conspired to submit such claims under a contract with the General Services Administration (GSA) in support of the Naval Oceanographic Major Shared Resource Center (NAVO MSRC).

The whistleblower will receive a $560,000 share of the recovery.

The contract in questions was to provide support services for the National Center for Critical Information Processing and Storage (NCCIPS) at the NAVO MSRC at the John C. Stennis Space Center in Hancock County, Miss. GSA awarded the NCCIPS task order in April 2004 to Science Applications International Corporation (SAIC), which teamed with Lockheed Martin and Applied Enterprise Solutions (AES) to perform under the task order. SAIC was paid a total of $115 million under the contract, of which Lockheed Martin was paid $2 million according to the terms of its subcontract with SAIC.

The case, filed in May 2009, alleged that prior to the issuance, and once the NCCIPS solicitation had been publicized, that then government employees, Stephen Adamec and Robert Knesel, conspired with Lockheed Martin, Galloway, SAIC and AES to ensure that SAIC and its teaming partners were awarded the task order by (a) sharing non public, advance procurement information with the SAIC team that was not provided to other potential bidders; (b) sharing information about the solicitation with the SAIC team before providing that information to other bidders; and choosing a type of contract and putting language in the solicitation in order to bias the selection process to favor the SAIC team.

A settlement has been reached in a whistleblower class action lawsuit brought against John D. Archbold Memorial Hospital Inc who is accused of submitting false claims to the state of Georgia’s Medicaid program.

The whistleblower will receive $695,151 from the settlement amount.

The whistleblower case, filed in 2008, alleged that between November 2002 and July 2008, the Thomasville, Ga.-hospital made false representations to the Georgia Department of Community Health, the state agency that administers the Medicaid program in Georgia, that it was a public hospital for Medicaid purposes in order to increase the amount of Medicaid funds provided to the hospital. Under Medicaid rules, only public hospitals may participate in the Medicaid Upper Payment Limit (UPL) program. In addition, public hospitals receive additional Disproportionate Share Hospital (DSH) program funds that are not available to private hospitals. Contrary to its certification to the Georgia Department of Community Health, Archbold Memorial was in fact a private hospital, and as a result received millions of dollars in UPL and DSH funds to which it was not entitled.

A settlement has been reached in a whistleblower class action lawsuit brought against EMC Corporation who is accused of violating both the False Claims Act and the federal Anti-kickback Act.

The whistleblower reward for this settlement was not disclosed.

The original whistleblower case was filed in September 2004. The United States complaint alleged that, by misrepresenting its commercial pricing practices, EMC fraudulently induced the General Services Administration (GSA) to enter into a contract with prices that were higher than they would have been had the information technology company not made false misrepresentations. Specifically, the United States alleged that the Hopkinton, Mass.-based company represented during contract negotiations that, for each government order under the contract, EMC would conduct a price comparison to ensure that the government received the lowest price provided to any of the company’s commercial customers making a comparable purchase. According to the government’s complaint, EMC knew that it was not capable of conducting such a comparison, and so EMC’s representations during the negotiations – as well as its subsequent representations to GSA that it was conducting the comparisons – were false or fraudulent.

The United States also alleged that EMC engaged in an illegal kickback scheme designed to influence the government to purchase the company’s products. EMC maintained agreements whereby it paid consulting companies fees each time the companies recommended that a government agency purchase an EMC product.

A settlement has been reached in a whistleblower class action lawsuit brought against Dr. Todd J. Scarbrough and Melbourne Internal Medicine Associates P.A. (MIMA), who are accused of submitting false claims to Medicare and the military’s health care program - TRICARE.

The whistleblower will receive $2.64 million of the settlement.

The case was originally filed in July 2008.  The United States alleged MIMA Cancer Center had defrauded the federal health care programs by improperly inflating claims through various schemes specifically designed to cloak the fraudulent practices. In particular, the MIMA Cancer Center billed for services not supervised, duplicate and unnecessary services, services not rendered and upcoded services - a practice in which provider services are billed for higher procedure codes than were actually performed. The United States’ investigation found that MIMA executives had knowledge of a substantial number of the fraudulent billing practices at the facility, but had failed to stop the fraudulent billing.

A settlement has been reached to resolve False Claims Act allegations against Lincoln Fabrics Ltd, and its American subsidiary.  They are accused of knowingly selling the government defective products.

In October 2009, the United States filed suit against Lincoln for violations of the False Claims Act and related claims. The $4 million settlement resolves this lawsuit.

The United States allegations are in relation to Lincoln Fabrics Ltd's role in the weaving of Zylon fabric used in the manufacture and sale of defective Zylon bullet-proof vests.

Using Zylon fiber manufactured by Toyobo Corp., Lincoln wove ballistic fabric for the body armor industry. Lincoln’s woven Zylon fabric was used in the manufacture of Zylon bullet-proof vests sold by several companies, including Second Chance Body Armor Inc., First Choice Armor Inc. and Point Blank Body Armor Inc. These vests were purchased by the United States, and by various state, local, and/or tribal law enforcement agencies, who were partially reimbursed by the United States.

The United States alleged that the Zylon in these vests lost its ballistic capability quickly, especially when exposed to heat and humidity. The United States further alleged that Lincoln was aware of the defective nature of the Zylon by at least December 2001, but continued to sell Zylon for use in ballistic armor until August 2005, when the National Institute of Justice issued a report that Zylon degraded quickly in ballistic applications. At that time, all American body armor manufacturers stopped using Zylon in body armor.

A settlement has been reached in a whistleblower class action lawsuit brought against Visiting Physicians Association who is accused of submitting false claims to Medicare, TRICARE and the Michigan Medicaid program.

The lawsuit was one of four filed against the defendants.  The whistleblowers will share in a recovery of approximately $1.7 million.

The United States alleged that Visiting Physicians Association submitted claims to the Medicare, TRICARE and Michigan Medicaid for unnecessary home visits and care plan oversight services, for unnecessary tests and procedures, and for more complex evaluation and management services than the services that Visiting Physicians Association actually provided.