As of September 30, 2006
FY 2006 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 2006.
Listed below are 95 False Claims Act cases that were resolved in FY 2006.
The 95 False Claims Act cases settled or brought to judgment in FY 2006 yielded a total of more than $3.166 billion.
31 cases were settled or resolved for a sum of $2 million or less.
6 cases were settled or resolved for a sum of $100 million or more.
Many of the largest False Claims Act cases settled in FY 2006 were settled for fractional damages. For example, Tenet is estimated to have stolen $1,900,000,000 dollars, but is only repaying $900 million dollars; St. Barnabas Health Systems is estimated to have stolen $630 million to $700 million, but is only repaying $265 million; Financier Mario Gabelli and associates made more than $200 million in profit from the sale of illegally obtained bandwidth, but are only repaying $130 million.
To compare these results to last year's statistics >> click here
Company Amount in Millions $ Date Nature of the fraud Medicare Medicaid Tenet Healthcare 900 06/29/06 A global settlement of a wide variety of health care frauds including outlier payment violations, kickbacks, and upcoding DRG's. x x Serono 567 10/17/05 Illegally marketing Serostim, an anti-wasting growth hormone sold to AIDS patients. Scam involved non-FDA approved computer software and machines to calculate body mass to falsely diagnose AIDS wasting; off-label marketing of Serostim, and; kickbacks to physicians and specialty pharmacies to get them to prescribe or recommend Serostim. Total settlement of $704 includes criminal fine. X Schering Plough 435
Off-label marketing and best price violations for Temodar, Intron-A, K-Dur, Claritin RediTabs X Saint Barnabas Hospitals of West Orange, New Jersey 265 06/15/06 Saint Barnabas Hospitals billed "outlier" payments which were based on fraudulently inflated charges. X Mario Gabelli and Lynch Interactive 130 06/13/06 FCC Bandwidth fraud -- billionaire masquerading as a "small business" King Pharmaceutical 124 11/01/05 Violation of Medicaid prescription drug "best price" regulations and the underpayment of rebates for the drugs Altace, Aplisol, Lorabid, and Fluogen. King Pharmaceutical was giving price breaks to pharmacy benefit management companies (PBMs) that it was not giving to the U.S. Government X Beth Israel Hospital 72 12/01/05 Hospital billed Medicare for non-reimbursable costs. X X Peter Rogan / Edgewater Medical Center (not qui tam case, court verdict) 64.2 09/30/06 Paying kickbacks to physicians for patient referrals. X X Tenet (Redding) and Dr. Fidel Realvasquez, Dr. Kent Brusett, Dr. Ricardo Javier Moreno-Cabral, Dr. Chae Moon 62.55 11/15/05 Tenet doctors performed unnecessary heart surgeries at the Redding Medical Center in Redding, California X ABN AMRO Mortgage Group, Inc. (ABN), 42 01/05/06 Made false certifications to the United States Department of Housing and Urban Development (HUD) in connection with 28,097 federally insured mortgages Erlanger Medical Center 40 10/05/05 Kickback and false billing by Tennessee hospital. Federal officials contended they had $120 million in valid claims against Erlanger X X Navigant Consulting Inc (California FCA case) -arbitration ruling 37 09/18/06 Electric distribution maintenance services Pediatrix 25.1 09/22/06 Overbilled Medicaid and TriCare for baby and infant care. X Balfour Beatty Construction, Inc. 24.75 10/10/05 Several contractors to Amtrak cheated the Government by inflating bills for installing the poles and an electrical power system used on the tracks between New Haven, Connecticut and Boston. Robert I. Bourseau, Dr. Rudra Sabaratnam,
RIB Medical Management Services, Inc., and Navatkuda, Inc.
24 9/19/06 Judgment. Manipulation of Medicare cost reports at a psychiatric hospital in Chula Vista,
X Tenet San Diego ** 21 05/17/06 Kickbacks to physicians (may be mostly criminal settlement). X X Beverly (under U.S. and Calif. FCA) 20 08/22/06 Beverly subsidiary MK Medical submitted false DME claims for payment to the Medicare and Medi-Cal programs from 1998 until 2002, . X X York County PA 18.5 04/27/06 County overbilled Dept. of Homeland Security for immigration detention. BearingPoint 15 01/03/06 Overbilled the government for travel expenses and did not disclose rebates. Horizon West Inc. and Horizon West Healthcare Inc. 14.7 09/26/06 Falsely inflated the number of nursing hours spent on Medicare patients X University Hospitals of Cleveland 14 08/22/06 University Hospitals of Cleveland, entered into improper financial arrangements with physicians to motivate them to make referrals to other doctors within the system in Medicare cases. X Odyssey HealthCare 13.5 07/11/06 Billed Medicare for services provided to hospice patients who were not terminally ill and therefore were ineligible for the Medicare hospice benefit. X Hunt Valve 13.2 11/01/2005 Northrop Grumman, General Dynamics Electric Boat and other defendants failed to stop obvious quality and fraud problems at Hunt Valve, a key maker of parts used in nuclear submarines and nuclear waste storage tanks. Fluor Corp. 12.5 11/04/05 Knowingly overbilled the Departments of Energy and Defense for overhead not used in federal projects, including buildings and parking lots rented to other companies General Electric 11.5 07/25/06 Turbine Matria 10 03/08/06 Diabetes company billed Medicare for unapproved durable medical equipment claims, double billed, and did not credit Medicare for returned goods that were never ordered. X Custer Battles 10 03/10/06 Contract fraud in Iraq involving the Iraqi money exchange program. Lincare 10 05/24/06 Home oxygen company paid kickbacks to doctors. X X AGE Refining 9 08/09/06 False certification of SBA HUBZone compliance in order to get government fuels contract. Baxter International 8.5 06/13/06 Baxter International falsely reported prices of drugs to the Texas Medicaid system. X State of Indiana 8.3 06/29/06 E-rate fraud. Indiana Intelenet Commission (now defunct) inflated prices, falsified invoices, engaged in non-competitive bid practices, and did not contribute the state share. Intrepid U.S.A. 8 02/09/06 Home health company fraudulently overbilled Medicare, Medicaid, and TRICARE/CHAMPUS X X Staples 7.4 10/18/05 Company submitted false claims when it sold office products to the U.S. Government that were not permitted by a General Services Administration (GSA) contract that required all covered office products to be made in countries covered by the Trade Agreements Act. Tenet Florida 7 02/21/06 Settlement of false outlier payment claims in Florida. X Corporate Express 5 02/10/06 Company submitted false claims when it sold office supply products manufactured in countries not permitted by the Trade Agreements Act Clark Atlanta University 5 04/14/06 University received money from the Department of Energy to train a new minority workforce in environmental scientists, but did not use the money for that purpose Evertec 4.8 10/24/05 Company defrauded the E-Rate program which is designed to subsidize bringing the internet to public schools in poor area. Highmark 4.5 06/27/06 Medicare secondary payer X Ernst & Young LLP 4.47 01/03/06 Overbilled the government for travel expenses and did not disclose rebates Riverbend Rehabilitation Hospital 4 10/13/05 Payment of illegal management fees to owners of hospital X X St. Barnabas Health Care System 3.9 12/07/05 Billing for inpatient care for outpatient care. X X Our Lady of Lourdes Regional Medical Center, Louisiana 3.8 08/18/06 Submitted claims for medically unnecessary elective angiogram, medically unnecessary elective angioplasty, and medically unnecessary elective stenting procedures. X X Visiting Nurse Association of Brooklyn 3.8 09/30/06 VNAB improperly characterized various expenditures in its cost reports. X Marion County Medical Center 3.75 07/25/06 Stark violations rising to FCA concerns X X Piedmont Hospital in Atlanta 3.5 06/09/06 Hospital billed for work not performed by physician. x Booz Allen Hamilton 3.37 01/03/06 Overbilled the government for travel expenses and did not disclose rebates Alabama Physicians (Gerald M. ("Max") Burleson, his wife Frances R. Burleson, and their businesses (Haleyville Medical Supplies, Inc., City Pharmacy of Haleyville, Inc., Care Medical of Jasper, Inc., Care Pharmacy, Inc., and Winfield Medical Supply, Inc.) 3.14 07/10/06 Burlesons paid kickbacks to individuals who improperly referred patients to the Burlesons for durable medical equipment and respiratory medications X X Williams Brothers Construction Company 3 12/14/05 Company illegally claimed it was eligible for Disadvantaged Business Enterprise (DBE) contracts for road construction. McKesson 3 02/16/06 Charged Defense Department medical treatment facilities more for pharmaceutical products than was permitted under its contracts. AT&T 2.9 06/27/06 AT&T knowingly passing through to government customers, in violation of the terms of AT&T's contract with GSA certain, costs and fees known as Presubscribed Interexchange Carrier Charges AT&T 2.9 07/05/06 AT&T knowingly passed through to government customers, in violation of the terms of AT&T's contract with GSA, certain costs and fees known as Presubscribed Interexchange Carrier Charges. The charges are a fee that long distance companies pay to local telephone companies to recover part of the costs of providing facilities that link each telephone customer to the telephone network. KPMG LLP 2.77 01/03/06 Overbilled the government for travel expenses and did not disclose rebates Amir Hussein 2.6 02/27/06 Cardiologist overbilled Medicare for elderly and disabled patients, from 1997-2003 X Honeywell 2.6 06/15/06 Honeywell did not properly test electrostatic protective metallic sheets used to protect sensitive electronic parts used by NASA and DoD. Prime Care Services, Inc. 2.528 11/08/05 Billed Medicare for 10,00 sq. ft. house on golf course. X P.B. Fasteners 2.5 11/14/05 Defrauded government over a 10-year period when it failed to conduct test on fasteners used in airplanes. Life Care Center of Lawrenceville (GA) 2.5 12/22/05 Systemic failure to provide care to nursing home patients X X U. of Conn 2.5 01/11/06 Overcharged costs on over 500 federal research grants. Sequel Contractors Inc. and JHTM & Associates 2.5 04/10/06 Company officials conspired to pad construction invoices and keep the cash. Harlem Hospital 2.3 05/31/06 Hospital double-billed Medicare from January 1992 through June 2001 X Farmers Bancorp 2.1 06/01/06 FEB improperly charged excessive fees and inflated interest rates on federally-guaranteed agricultural loans, Phoenix Fabricator 2 05/23/06 Did not test welds on water tanks as required. Dr. Philip N. Chiotellis and Cardiac Rehabilitation 1.9 05/18/06 Overbilled Medicare from 1995 through 2001 for thousands of cardiac rehabilitation services that were performed, but billed to the Medicare program as cardiovascular stress tests X Force Protection (SC) 1.8 08/31/06 Maker of armored vehicles for the Pentagon failed to advance payments to expedite production of vehicles MediCenter Diabetic Supply, 1.6 12/07/05 Claims double billed and physician and patient signatures forged. X X AEPTEC 1.6 04/07/06 Company overcharged the Navy on four contracts for shipboard automation technology. Group II Medical Supports of Beckley, WV 1.57 05/15/06 Group II routinely supplied high cost inflatable mattresses developed to treat the most advance and serious forms of pressure ulcers or bed sores, to Medicare and Medicaid patients who did not have the required ulcers and otherwise did not qualify. x x GA Paper International (USA) Inc. and Ramtech Overseas Inc. 1.31 10/25/05 Companies defrauded USAID while participating in the agency's Commodity Import Program. The two companies knowingly submitted more than 100 false and inflated claims for reimbursement. Illinois Nursing Home Companies and Owners: Robert D. Wacther, R. William Breece, American HealthCare Management, Inc. (AHM) and three nursing facilities managed by AHM; Claywest House HealthCare LLC, Lutheran HealthCare LLC and Oak Forest North LLC. 1.25 10/24/05 Fraudulent nursing home billings for substandard care. Nursing homes residents suffered from dehydration and malnutrition, were left for extended periods of time without being cleaned or bathed, and contracted preventable pressure sores. X X Option Care of Nevada 1.25 10/25/05 Improperly diluted and split Synagis powder dosage for infants X X Carlinville Area Hospital 1.25 12/22/05 Filed padded Medicare claims from February 1997 to December 2001. X Development Alternatives Inc. of Bethesda 1.2 12/30/05 Overcharged the U.S. Agency for International Development in three contracts for overseas economic development work Shinwha Electronics Corporation of South Korea 1.2 02/06/06 Company failed to inspect fire suppression equipment at U.S. Army and Air Force bases throughout South Korea. Marisco Ltd. 1.2 02/06/06 Fraud in the handling of a surplus Navy drydock in Hawaii which was supposed to be moved to Alaska. Moshe Lavid (M.L. Energia Inc.) 1.1 11/11/05 Violated the terms of government grants and contracts by applying for funds from one agency after already having received money from another under the same proposal. Shaul Debbi 1.015 Ophthalmologist filed false claims Medicare to obtain reimbursement for work not done or not needed at long-term residential facilities. X Rush University Medical 1 12/13/05 Billed for cancer treatment covered by research grants X X Beebe Medical Center and two Delaware physicians (Richard Caruso and Vinod Parashe) 1 03/21/06 Kickback: the two doctors were paid a fee by the hospital, from federal Medicare reimbursements, on top of money they received from the government for performing the services. X Insight Public Sector, Inc. 1 03/28/06 A predecessor corporation, Comark Government & Education Services (CGES), falsely certified itself as a "small business" on its application for inclusion on the General Services Administration's Multiple Award Schedule (MAS). Dr. James N. Hauser 1 11/07/05 Billing for medically unnecessary services X Rehabilitation Specialists of Livingston County, Michigan (Mark Miller) 1 08/09/06 Company overbilled Medicare for costs associated with physical, occupational and speech therapy. X Allied Home Medical Inc (TN) 0.98 10/03/05 submitted false claims for power wheelchairs that were not medically needed in 2001 and 2002 X X Moore Farms, William Jesse Moore and Bobby Elbridge Moore 0.9 04/01/06 Moore Farms filed false insurance claims for the 1998 growing season related to thousands of acres of cotton and wheat sorghum that were never planted. Tenet 0.82 02/23/06 Improperly billed outpatient lab services. Global settlement with 22 states. X X Star Physical Therapy 0.655 11/20/05 Group therapy billed as individual therapy. X X Lawall Prosthetics-Orthotics 0.645 11/02/05 Improperly billing Medicare for additional services and add-ons that were never provided for the orthotic and prosthetic devices X Siouxland Surgical Center, South Dakota and Center for Neuroscienses, Orthopedics & Spine (CNOS) 0.345 09/24/06 CNOS doctors accepted payments from Stryker Corp. as an incentive for using their orthopedic products. X X Stryker and Dakota Dunes health clinic 0.325 06/26/06 Artificial joint manufacturer paid clinic kickbacks to use its products which were billed to Medicare and Medicaid. X X Winsted Pediatric and Mohammad S. Khera, M.D. 0.206 01/05/05 Charged Medicaid for vaccines provided free-of-charge from the Vaccines For Children (VFC) program. X P & D MARKET, INC. and Atulkuma Patel 0.2 03/17/06 Food stamp fraud Harbor Healthcare and Rehabilitation Center 0.15 11/10/05 Inadequate care X Charles D. Malis of Carlisle, Massachusetts 0.102 03/28/06 Upcoding of office medical visits. X Rock Valley Community Programs and chief executive officer, Irwin McHugh 0.092 04/11/06 Submitted false claims for payment to the Federal Bureau of Prisons. TOTAL 3,166.093
* Note that this number does not include a $10 million jury verdict in the Custer Battles battles case which was reversed by a judge and which is on appeal, nor does it include a $40 million settlement announced by Medtronic but not yet formally announced by the U.S. Department of Justice. Combined these two cases total an additional $50 million.