As of October 01, 2008

FY 2008 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 2008. 

Company Amount in Millions $ Date Nature of the fraud Medicare Medicaid
Merck 650 2/8/2008 Nominal pricing fraud, with kickback and best price violations for the arthritis drug Vioxx, the cholesterol drug Zocor, the acid-reflux drug Pepcid, the hypertensive medication Cozaar, the bone loss drug Fosamax, the migraine medication Maxalt, and the asthma medication Singulair.   X
Cephalon 375 11/9/2007 Off-label marketing of narcotic lollipop Actiq ("fentanyl citrate") as well as Gabitril (an epilepsy medication) and Provigil  (a narcolepsy medication).  An additional sum of $50 million was paid to settle criminal charges. X X
Amerigroup 225  7/23/2008  Final settlement post jury trial.  Company was cherry-picking the healthiest patients to reduce Medicaid HMO liability/spending.  The specific group excluded was pregnant women.   X
Staten Island University Hospital  88 9/17/2008 The hospital fraudulently billed Medicaid and Medicare for inpatient alcohol and substance abuse detoxification treatment beds for which it did not have certification, fraudulently inflated its patient count, and fraudulently billed Medicare for stereotactic body radiosurgery treatment that was provided on an out-patient basis to cancer patients.  X X
Medtronic/Kyphon 75 5/22/2008 Kyphon improperly advised customers to bill its kyphoplasty procedure -- a minimally invasive surgery used to treat spine fractures -- as an inpatient procedure.  Medtronic bought Kyphon X X
CoxHealth 60 7/22/2008 From January 1999 through December 2004, through entities controlled by Cox (Ozark Dialysis Services and Cox HPS of the Ozarks, Inc.), Cox improperly billed for end stage renal disease treatments provided to patients.  X X
Pratt and Whitney 52 8/2/2008 Pratt & Whitney and PCC (a P&W subsidiary) knowingly sold defective turbine blade replacements for jet engines used in F-15 and F-16 fighter aircraft used by the U.S. Air Force.    
Hanson Building Materials 42 12/11/2007 Company improperly mined 2 million cubic feet of sand -- used to make concrete -- from Suisun and San Francisco bays and defrauded the state out of millions of dollars in royalties.    
CVS 37 3/18/200 Illegally changing generic Zantac® prescriptions from tablets to higher priced capsules X X
WellCare 35.2 8/27/2008 Paid as a "desposit" for larger False Claims Act violations alleged, admitted to, and still being examined. X X
Walgreens 35 6/4/2008 Switching dosage forms in filling generic Prozac®, Zantac® and Eldepryl® prescriptions. X X
Healthfirst 35 9/17/2008 Healthfirst, the largest Medicaid Managed Care provider in New York, violated state and federal contracts by paying bonuses to employees based on the number of people they enrolled in managed care.  X X
National Air Cargo  28 3/12/2008 Billing Defense Department for overnight, but sending second day.     
Abbott (TX) 28 9/17/2008 Average Wholesale Price violations.  Abbott misreported drug prices to Medicaid, causing the state to overpay for prescription drugs.   X
Cigna, Express Scripts  27 7/30/2008 ExpressScripts committed fraud by disguising drug rebates as administrative and other fees and keeping them, and buy switching patients from one drug to another without doctor's authorization.  Express-Scripts managed the drug plan for Cigna which was a contractor for New York state's Empire Plan. X X
Saint Joseph's Hospital of Atlanta Inc. and Saint Joseph's Health System Inc 26 12/21/2007 Billed "outpatient visits" as "inpatient admissions." X X
Kinder Morgan Operating L.P., and Kinder Morgan Operating L.P. 25 11/29/2007 Inaccurate coal weights and measurements.     
Biovail 24.6 5/19/2008 Company paid doctors kickbacks to promote Cardizem LA, a heart medication. X X
Bechtel Infrastructure Corp. and PB Americas Inc. 23 1/24/2008 Companies agree to pay the United States and the Commonwealth of Massachusetts a total of $458 million to settle allegations that B/PB violated federal and state criminal and civil laws by failing to provide adequate construction management and quality assurance services to the Central Artery Tunnel, known as the Big Dig, in Boston.  Of this amount, Bechtel and PB Americas will pay over $23 million to the United States to settle federal False Claims Act allegations, over $40 million to the Commonwealth of Massachusetts to settle state False Claims Act allegations    
HealthSouth Corporation and two physicians, Drs. James Andrews and Lawrence Lemak   14.9 12/16/2007 Paid illegal kickbacks to physicians who referred patients for care in some of its hospitals, outpatient rehabilitation clinics, and ambulatory surgery centers. X X
Pasha Group, and its subsidiaries, American MOPAC International and Gateways International, and employees, Missy Donnelly and George Pasha.  13 5/29/2008 Conspiracy to rig bids, fix prices and allocate the market for the transportation of household goods belonging to military and Department of Defense (DoD) personnel between Europe and the United States    
McKesson Co. 13 5/5/2008 Company violated provisions relating to the sale of addictive prescriptive medicines (hydrocodone) later diverted to street sales.     
National Air Cargo 11.75 3/27/2008 Including criminals fines, a total of $28 million to settle charges the company submitted fraudulent claims to DoD for the shipment of freight.    
Lockheed Martin Space Systems 10.5 5/14/2008 Company submitted invoices for payment it was not entitled to receive on a multi-billion dollar contract connected to the Titan IV space launch vehicle program.    
Medicaid Dental Center  (aka Smile Starters and Carolina Dental Center) 10.05 4/9/2008 Billing for medically unnecessary dental services performed on indigent children.   X
Walgreens 9.9 9/28/2008 Billed Medicare and Medicaid for charges prescription drug costs that that should have been billed to third-party private insurance. X X
Gohmann Asphalt and Construction Company, Inc.  8 12/10/2007 Fraud related to  asphalt density as part of federal highway contracts in Indiana and Kentucky.    
Baptist Health South Florida Inc. 7.75 5/13/2008 Stark violations - excessive compensation to an oncology group that was a source of patient referrals to two of Baptist's hospitals. X X
Warren Hospital in Phillipsburg, N.J.,  7.5 12/11/2007 Hospital system improperly increased charges to Medicare in order to obtain enhanced outlier payments X  
Dr. Fred Steinberg 7 4/15/2008 Overcharging Medicare for CT scans and billing the federal program for some tests that were not medically necessary. X  
Orange County, CA 7 12/21/2007 OC Health Care Agency billed Medicare for psychiatric evaluations performed by OCHCA personnel that were not certified.  OCHCA also improperly billed and was paid for dispensing self-administered methadone to drug-addicted patients, which is a non-covered service. X  
W.W. Grainger Inc 6 7/25/2008 Grainger sold government agencies products from countries that do not have reciprocal trade agreements with the U.S., such as China and Taiwan.  Grainger was required by its contract with the GSA and by the Trade Agreements Act to prevent such items from being offered for sale to U.S. government agencies.    
Greybor Medical Transportation, Inc.,  6 12/11/2007 Greybor regularly submitted claims for ambulance transport to Medicare that falsely stated a patient was “bed-confined,” when in fact the Medicare beneficiary was not. X  
MedCath Corporation (Arizona Heart Hospital) 5.8 12/11/2007 Billed for endoluminal graft devices (utilized to treat aneurysms) that had not received final marketing approval from the Food and Drug Administration. X X
Cathedral Healthcare System Inc 5.3 3/5/2008 Hospital system improperly increased charges to Medicare in order to obtain enhanced outlier payments X  
Memorial Health University Medical Center 5.08 4/25/2008 Stark violations X X
National City Mortgage  4.6 5/23/2008 Company did not properly underwrite 58 federally insured mortgage loans submitted to the Department of Housing and Urban Development.     
Otsuka Pharmaceutical Co. Ltd.'s  4 3/27/2008 Off-label marketing of Abilify.    
Cooper University Hospital in Camden, N.J.,  3.8 9/24/2008 Hospital engaged in Medicare fraud by inflating its Medicare claims to increase its revenues. X  
Yale-New Haven Hospital 3.78 3/24/2008 Hospital overbilled Medicare for infusion therapy, chemotherapy administration and blood transfusion services performed on patients X  
Premier Manufacturing of South Carolina  3.1 12/7/2007 Company importer, has agreed to pay an additional $3.1 million to settle civil claims that between 1995 and 2002, it deliberately understated the weights of cigarettes that it imported, the Justice Department announced. The company had previously agreed to pay $7.16 million in restitution as part of a criminal guilty plea that it entered in 2005.    
Heartland Dental Care  3 4/15/2008 Improper billing to Medicaid and allowing newly hired dentists to issue prescriptions prior to registration with the DEA.   X
Besler & Co. Inc.,  2.9 3/7/2008 Consultant induced hospitals to fraudulently increase Medicare outlier claims X  
Intertex International Inc., J.J. Basics, Inc. and Red Zone, Inc 2.8 5/14/2008 Companies tried to avoid tariffs by falsely claiming apparel was "Made in Korea" when it was made in China.    
Bayonne, N.J., Medical Center 2.5  2/5/2008 Hospital system improperly increased charges to Medicare in order to obtain enhanced outlier payments X  
Premier Medical Group and Dr. Mohammed Aiti 1.9 1/25/2008 Ordering expensive medical tests for patients who did not need them X X
Sioux Manufacturing Corp 1.9 12/19/2007 Company did not follow instructions in making protective material for military helmets used by U.S. soldiers fighting in Iraq and Afghanistan.    
Harris Methodist HEB Hospital  1.9 12/11/2007 Kickbacks on orthopedic items and services . X X
Carlson Therapy Network 1.8 9/24/2008 Billed group therapy as individual therapy X X
Roxane, a division of Boehringer Ingelheim 1.8 9/24/2008 Average Wholesale Price violations.  Roxane misreported drug prices to Medicaid, causing the state to overpay for prescription drugs   X
Touro Infirmary (New Orleans) 1.75 4/18/2008 Kickbacks to refer Dr. Maria Carmen Palazzo to refer psychiatric patients. X X
Community Memorial Health System (CMHS), Ventura, CA 1.52 12/20/2007 Stark violations in the form or interest-free loans, rental arrangements at below-market rents, employment arrangements with physicians’ family members and gifts. X X
Dr. Patrick Chan and Blackstone Medical  1.5 1/4/2008 Kickbacks to Chan in the form of bogus consulting contracts, fake research studies, and gifts to use Orthofix devices in back surgeries. X X
Gregory Glase Pinegar  1.5 12/4/2007 Overbilling for prescription drugs used to treat anemia and arthritis. X X
Computer Sciences Corp   5/14/2008 Company provided improper payments "and other things of value" on technology contracts with government agencies.      
Gulshan Sultan 1.1 3/21/2008 Submitted fraudulent psychiatric  X X
Saint Louis University  1  7/8/2008 Saint Louis University  overcharged federal agencies by misrepresenting time spent by faculty members working on research projects funded by federal grants.    
Stars Behavioral Health Group  1 11/6/2007 Company charged Medi-Cal for treatment at a San Leandro clinic on days when the youths were home with their families.   X
Protective Products International  0.96  4/11/200 Company sold Zylon bulletproof vests that it knew were defective.  These vests were purchased by the United States, and by various state, local, and/or tribal law enforcement agencies, which were partially reimbursed by the United States.    
Rockingham Regional Ambulance  0.958 1/29/2008 billed Medicare and Medicaid  for advanced life support services when they were not medically necessary or not documented properly. X X
Ivy Ridge Personal Care Center, Inc. (“Ivy Ridge”), Brookwood Personal Care Home, Inc. (“Brookwood”), Conlyn House, Inc. (“Conlyn”), Thoroughgood, Inc., (“Thoroughgood”), Health Horizons Unlimited, Inc. (“Health Horizons”), and current owner Rosalind S. Lavin.  0.7 6/10/2008 Company failed to provide necessary services, including food, medical care, security, and  sanitation to nursing home residents. X X
Seven freight forwarding companies – Air Land Forwarders, Arpin International Group, Covan International, Jet Forwarding, and SIRVA, the parent company of Allied Freight Forwarding, Global Worldwide and North American Van Lines  0.666 7/22/2008 Bid rigging by these freight forwarding companies for packing and unpacking services within Germany and for services performed at German ports.    
Greenwich Hospital  0.605 5/12/2008 Double billing for infusion therapy and chemotherapy administration services. X X
Bryan Corporation  0.485 1/4/2008 Interstate shipment of misbranded drug product and adulterated devices.  Bryan Corporation agreed to pay a criminal fine of $4,514,700 in addition to  $485,300 under the FCA.     
Miron Balyasny 0.45 4/23/2008 Upcoding of patients at Adult Day care in order  to get higher reimbursements.  X X
Hardeman County Memorial Hospital  0.4 4/1/2008 Improper lease agreement with one physician violated Stark self-referral law; hospital self-reported. X  
InterDent, Inc., InterDent Service Corporation and Dedicated Dental Systems Corporation  0.375 7/3/2008 Bakersfield, California-based company knowingly submitted false claims for orthodontic care to Medi-Cal’s dental program (Denti-Cal).   X
Dr. Kee Y. Shum 0.275 4/24/2008 Dr. Shum illegally imported cancer drugs as a way to cut costs and boost their income X X
Peck & Hale  0.275  3/27/2008 Bid rigging for cargo tie-down equipment.    
Everett Wilson 0.26 8/1/2008 Collected federal disability payments under two different Social Security numbers between 1993 and 2006.    
Dr Igal Staw 0.25 5/28/2008 Submitted claims to insurance companies for physical therapy sessions, nutritional counseling sessions, and massage therapy sessions, which were rendered by non-physician providers.  An additional $171,000 was paid to private insurance companies/   X  
Marion County (SC) Medical Center 0.036 5/20/2008 Insufficient care provided to patient that died.   X
Green Mountain Knitting  0.025 11/30/2007 Company lied about whether its product met military specifications.     
TOTAL 2008 2.10 billion