FY 2005 FCA Fraud Settlements

Oct. 7, 2005

FY 2005 False Claims Act Settlements

The cases below represent a "running tally" of False Claims Act cases compiled by the Taxpayers Against Fraud Education Fund for Fiscal Year 2005.

A total of 99 cases were settled or brought to judgment in FY 2005.

These 99 cases yielded a total of $1,498,824 million in settlements.

Just four cases -- Gambro, HealthSouth, Caremark and GlaxoSmithKline-- represented 61 percent of the settlement revenue.

Of the 99 cases settled or brought to judgment in FY 2005, 48 cases yielded more than $2 million.

To compare these results to last year's statistics >> click here

Company Amount in Millions $ Date Nature of the fraud
Medicare Medicaid

Gambro 325.5 12/15/2005 Gambro paid kickbacks to physicians for referrals to the company’s clinics, set up a sham company to feed inflated billings to Medicare, and falsified billing statements to patients to justify compensation for unnecessary tests and services. Gambro also paid a $25 million criminal fine and paid $15 million to resolve state claims. X

HealthSouth 325 12/31/2004 HealthSouth billed group physical therapy at individual physical therapy rates and often had unlicensed personnel doing the work.
X

GlaxoSmithKline 140 9/20/2005 False pricing of anti-nausea drugs Zofran and Kytril in order to market the spread. GSK also paid $10 million to resolve state claims.
X X

Caremark 137.5 9/9/2005 Reselling of drugs by AdvancePCS, acquired by Caremark X

Staten Island (N.Y.) University Hospital 76.5 5/19/2005 Medicaid false-billing charges related to a program designed to encourage providers to operate in medically underserved areas

Northrop Grumman 62 3/1/2005 Northrop Grumman fraudulently inflated scrapping claims on the B2 bomber in order to inflate total contract price.

Novartis / OPI Properties 44.7 2/16/2005 Novartis / OPI Properties fraudulently billed and marketed enteral nutritional products. X

PricewaterhouseCoopers 41.9 6/2/2005 Over-billed the government for travel-related expenses.

Gambro 37.5 9/26/2005 State settlement of Gambro renal care fraud involving kickbacks, unnecessary tests, over billing.
X

PolyMedica 35 12/2/2004 Medicare was not reimbursed for packages that were returned to PolyMedica and billed for test strips mailed to people that did not order them. X

Harvard University, Andrei Schleifer, Jonathan Hay 31 8/3/2005 USAID contract violation involving work on Russian stock market. Fraud by Shleifer and Hay who worked for Harvard. USAID contract with Harvard.

Apria Healthcare 17.6 8/10/2005 Incomplete or inaccurate documentation supporting a portion of the Company’s Medicare billings during the period from mid-1995 through 1998.
X

Gold Banc 16 11/19/2004 Gold Banc, a Kansas banking company, charged excessive interest rates and fees on federally guaranteed agricultural loans.

Florida International University 11.5 2/15/2005 Florida International University mis-charged costs and over billed under several contracts and grants with the U.S. Department of Energy. These contracts and grants dealt with testing and developing environmental technologies.

Wiggins, Kenneth Earl (King Drugs and Pharmacy) 10.5 6/20/2005 Wiggins and pharmacy submitted reimbursement claims to Medicaid and federal employee benefits programs for “free samples” collected and repackaged.

OfficeMax 9.8 5/19/2005 OfficeMax agrees to pay $9.8 million to settle charges it submitted false claims when it sold office products to the U.S. Government that were not permitted by a GSA contract that required all covered office products to be made in countries covered by the Trade Agreements Act.

Humanscale Corporation (formerly Softview Computer Products) 9 6/30/2005 Failed to disclose current, accurate and complete discount and pricing information to the General Services Administration (GSA).

Oracle 8 5/13/2005 Billing for services not provided and keeping the overpayment.

Harlan, Sprague, Dawley Inc. 7.2 3/1/2005 Harlan, Sprague, Dawley Inc., a supplier of genetically pure laboratory mice and rats, sold genetically contaminated stock wrecking untold amounts of medical research. NIH

Inter-Tel Technologies 7 1/5/2005 Inter-Tel agreed to plead guilty and to pay fines totaling $8.71 on charges of bid rigging and wire fraud in connection with a program intended to connect schools and libraries to the internet (the E-Rate program). In addition to the $7 million FCA fine, and additional $1.71 million was levied in criminal fines.

Omnicare and Upstate Pharmacies in Western NY 6.75 5/16/2005 Billing for drugs never delivered and a wide variety of billing irregularities.

Turner Construction Company 6.6 7/25/2005 Turner received credits for bonds on dozens of federal contracts without passing on the credits to the federal government.

Turner Construction Company 6.6 6/28/2005 Company received credits for bonds on dozens of federal contracts without passing the credits on to the federal government.

Arthur D. Little (aka Dehon Inc.) 6.5 3/25/2005 Inflated overhead on government contracts.

Providian and Total System Services 6 9/20/2005 Postage rate fraud - claiming a lower postage rate than entitled.

AdminaStar Federal Inc. 6 9/21/2005 Company misrepresented Medicare evaluations and overcharged CMS for claims processing. X

PharMerica 5.95 3/29/2005 PharMerica paid a kickback for Medicare and Medicaid contracts and disguised it in the form of an inflated price for a long-term care pharmacy that existed to do only one day’s worth of business. X X

Office Depot 4.75 9/19/2005 Sold office supply products manufactured in countries not permitted by the Trade Agreements Act to United States government agencies.

Cornell University 4.3 6/21/05 Defrauded government by charging all or too much salary to NIH grant given to university’s Children’s Clinical Research Center even though employees did not do work on grant.

U. of Miami 3.9 5/18/2005 U. of Miami double-billed and overcharged Medicaid through several of its outpatient clinics.

Resurgens 3.8 5/23/2005 Resurgens doctors paid kickbacks to the surgery center for using the Center’s Medicare provider number. The kickbacks were steered to a lockbox at an Atlanta bank. X X

Simi Valley Hospital 3.7 7/21/2005 Pneumonia upcoding.
X X

UnitedHealthcare 3.5 12/12/2004 While working as a Medicare contractor, UnitedHealthcare mishandled telephone calls involving the Medicare program, and then reported to Medicare they were doing a good job in order to retain the contract and get bonuses. X

McKesson Corp (TBC Products) 3.4 11/13/2004 TBC Products, a McKesson subsidiary, distributing tube-feeding equipment to patients too sick to eat on their own. As part of its sales plan, TBC distributed invoices that made it look like McKesson was charging for tube-feeding pumps that were free. This paperwork made it possible for nursing homes to bill taxpayers for the free pumps. Along with the $3.4 million civil False Claims Act fine, McKesson pled guilty and paid a $4 million criminal fine. X

Frank S. Chuang 3.4 2/8/2005 Mr. Huang submitted false claims to state and federal transportation agencies for work not performed.

U. of Alabama at Birmingham 3.39 4/14/2005 Double billing Medicare for patients in research trials.

Engenderhealth 3.3 4/29/2004 Failure to return unused USAID funding for family planning.

Western Sales and Testing 3 3/23/2005 Western Sales and Testing faked pressure tests and inspection of high-pressure truck cylinders used for over-the-road transportation of hydrogen, helium, methane, hydrogen chloride, and other gases. Several federal agencies were defrauded, include the DoE, NASA, and DoD.

Cleveland Clinic Florida Hospital 2.75 2/14/2005 From 1993 to 2001, the Cleveland Clinic billed for “for extra observation charges during normal recovery periods following minor surgery or emergency room visits.” X

Applied Consulting and sister company Applied Case Management 2.75 9/13/2005 Firms signed contracts with Mount Vernon (N.Y.) Hospital and Catskill Regional Medical Center in which kickbacks for patient referrals were disguised as “administrative service contracts.” X X

Honeywell 2.75 5/26/2005 Falsely stated in a contract proposal to the United States Air Force that it had a fully compliant cost management system, then tried to bill Government to create one.

Mount Vernon Hospital 2.65 8/2/2005 Kickbacks and billing for unlicensed drug and alcohol treatment centers X

Diebold 2.6 11/11/2004 Diebold made false claims about the security and certification status of its electronic voting machines and tabulation systems. As a result, six counties were misled into buying the machines.

Company	Amount in Millions $	Date	Nature of the fraud	Medicare	Medicaid
Gambro	325.5	12/15/2005	Gambro paid kickbacks to physicians for referrals to the company’s clinics, set up a sham company to feed inflated billings to Medicare, and falsified billing statements to patients to justify compensation for unnecessary tests and services. Gambro also paid a $25 million criminal fine and paid $15 million to resolve state claims.	X
HealthSouth	325	12/31/2004	HealthSouth billed group physical therapy at individual physical therapy rates and often had unlicensed personnel doing the work.	X
GlaxoSmithKline	140	9/20/2005	False pricing of anti-nausea drugs Zofran and Kytril in order to market the spread. GSK also paid $10 million to resolve state claims.	X	X
Caremark	137.5	9/9/2005	Reselling of drugs by AdvancePCS, acquired by Caremark		X
Staten Island (N.Y.) University Hospital	76.5	5/19/2005	Medicaid false-billing charges related to a program designed to encourage providers to operate in medically underserved areas
Northrop Grumman	62	3/1/2005	Northrop Grumman fraudulently inflated scrapping claims on the B2 bomber in order to inflate total contract price.
Novartis / OPI Properties	44.7	2/16/2005	Novartis / OPI Properties fraudulently billed and marketed enteral nutritional products.	X
PricewaterhouseCoopers	41.9	6/2/2005	Over-billed the government for travel-related expenses.
Gambro	37.5	9/26/2005	State settlement of Gambro renal care fraud involving kickbacks, unnecessary tests, over billing.		X
PolyMedica	35	12/2/2004	Medicare was not reimbursed for packages that were returned to PolyMedica and billed for test strips mailed to people that did not order them.	X
Harvard University, Andrei Schleifer, Jonathan Hay	31	8/3/2005	USAID contract violation involving work on Russian stock market. Fraud by Shleifer and Hay who worked for Harvard. USAID contract with Harvard.
Apria Healthcare	17.6	8/10/2005	Incomplete or inaccurate documentation supporting a portion of the Company’s Medicare billings during the period from mid-1995 through 1998.	X
Gold Banc	16	11/19/2004	Gold Banc, a Kansas banking company, charged excessive interest rates and fees on federally guaranteed agricultural loans.
Florida International University	11.5	2/15/2005	Florida International University mis-charged costs and over billed under several contracts and grants with the U.S. Department of Energy. These contracts and grants dealt with testing and developing environmental technologies.
Wiggins, Kenneth Earl (King Drugs and Pharmacy)	10.5	6/20/2005	Wiggins and pharmacy submitted reimbursement claims to Medicaid and federal employee benefits programs for “free samples” collected and repackaged.
OfficeMax	9.8	5/19/2005	OfficeMax agrees to pay $9.8 million to settle charges it submitted false claims when it sold office products to the U.S. Government that were not permitted by a GSA contract that required all covered office products to be made in countries covered by the Trade Agreements Act.
Humanscale Corporation (formerly Softview Computer Products)	9	6/30/2005	Failed to disclose current, accurate and complete discount and pricing information to the General Services Administration (GSA).
Oracle	8	5/13/2005	Billing for services not provided and keeping the overpayment.
Harlan, Sprague, Dawley Inc.	7.2	3/1/2005	Harlan, Sprague, Dawley Inc., a supplier of genetically pure laboratory mice and rats, sold genetically contaminated stock wrecking untold amounts of medical research.	NIH
Inter-Tel Technologies	7	1/5/2005	Inter-Tel agreed to plead guilty and to pay fines totaling $8.71 on charges of bid rigging and wire fraud in connection with a program intended to connect schools and libraries to the internet (the E-Rate program). In addition to the $7 million FCA fine, and additional $1.71 million was levied in criminal fines.
Omnicare and Upstate Pharmacies in Western NY	6.75	5/16/2005	Billing for drugs never delivered and a wide variety of billing irregularities.
Turner Construction Company	6.6	7/25/2005	Turner received credits for bonds on dozens of federal contracts without passing on the credits to the federal government.
Turner Construction Company	6.6	6/28/2005	Company received credits for bonds on dozens of federal contracts without passing the credits on to the federal government.
Arthur D. Little (aka Dehon Inc.)	6.5	3/25/2005	Inflated overhead on government contracts.
Providian and Total System Services	6	9/20/2005	Postage rate fraud - claiming a lower postage rate than entitled.
AdminaStar Federal Inc.	6	9/21/2005	Company misrepresented Medicare evaluations and overcharged CMS for claims processing.	X
PharMerica	5.95	3/29/2005	PharMerica paid a kickback for Medicare and Medicaid contracts and disguised it in the form of an inflated price for a long-term care pharmacy that existed to do only one day’s worth of business.	X	X
Office Depot	4.75	9/19/2005	Sold office supply products manufactured in countries not permitted by the Trade Agreements Act to United States government agencies.
Cornell University	4.3	6/21/05	Defrauded government by charging all or too much salary to NIH grant given to university’s Children’s Clinical Research Center even though employees did not do work on grant.
U. of Miami	3.9	5/18/2005	U. of Miami double-billed and overcharged Medicaid through several of its outpatient clinics.
Resurgens	3.8	5/23/2005	Resurgens doctors paid kickbacks to the surgery center for using the Center’s Medicare provider number. The kickbacks were steered to a lockbox at an Atlanta bank.	X	X
Simi Valley Hospital	3.7	7/21/2005	Pneumonia upcoding.	X	X
UnitedHealthcare	3.5	12/12/2004	While working as a Medicare contractor, UnitedHealthcare mishandled telephone calls involving the Medicare program, and then reported to Medicare they were doing a good job in order to retain the contract and get bonuses.	X
McKesson Corp (TBC Products)	3.4	11/13/2004	TBC Products, a McKesson subsidiary, distributing tube-feeding equipment to patients too sick to eat on their own. As part of its sales plan, TBC distributed invoices that made it look like McKesson was charging for tube-feeding pumps that were free. This paperwork made it possible for nursing homes to bill taxpayers for the free pumps. Along with the $3.4 million civil False Claims Act fine, McKesson pled guilty and paid a $4 million criminal fine.	X
Frank S. Chuang	3.4	2/8/2005	Mr. Huang submitted false claims to state and federal transportation agencies for work not performed.
U. of Alabama at Birmingham	3.39	4/14/2005	Double billing Medicare for patients in research trials.
Engenderhealth	3.3	4/29/2004	Failure to return unused USAID funding for family planning.
Western Sales and Testing	3	3/23/2005	Western Sales and Testing faked pressure tests and inspection of high-pressure truck cylinders used for over-the-road transportation of hydrogen, helium, methane, hydrogen chloride, and other gases. Several federal agencies were defrauded, include the DoE, NASA, and DoD.
Cleveland Clinic Florida Hospital	2.75	2/14/2005	From 1993 to 2001, the Cleveland Clinic billed for “for extra observation charges during normal recovery periods following minor surgery or emergency room visits.”	X
Applied Consulting and sister company Applied Case Management	2.75	9/13/2005	Firms signed contracts with Mount Vernon (N.Y.) Hospital and Catskill Regional Medical Center in which kickbacks for patient referrals were disguised as “administrative service contracts.”	X	X
Honeywell	2.75	5/26/2005	Falsely stated in a contract proposal to the United States Air Force that it had a fully compliant cost management system, then tried to bill Government to create one.
Mount Vernon Hospital	2.65	8/2/2005	Kickbacks and billing for unlicensed drug and alcohol treatment centers		X
Diebold	2.6	11/11/2004	Diebold made false claims about the security and certification status of its electronic voting machines and tabulation systems. As a result, six counties were misled into buying the machines.