From Taxpayers Against Fraud :: 202-296-4826
As of October 01, 2010
FY 2010 False Claims Act Settlements
Taxpayers Against Fraud calculates the U.S. Department of Justice recovered over $3.1 billion of America's stolen money in Fiscal Year 2010 thanks to whistleblowers and the federal False Claims Act.
More than 80 percent of all successful False Claims Act recoveries are brought to the government by whistleblowers and their lawyers, making the law the most important tool the U.S. Government has in the war against fraud.
The False Claims Act provides for triple damages plus statutory fines of up to $11,000 per false claim.
Whistleblowers that bring evidence of fraud to the U.S. Government are eligible for awards of 15 to 30 percent of the total amount recovered under the Act.
80 percent health:
Approximately 80 percent of all fraud recoveries under the False Claims Act occur in health care, but significant amounts of fraud are also found in defense, education, transportation, and the oil and gas industries.
$15 back for ever $1 invested:
Taxpayers Against Fraud calculates that the False Claims Act is returning more than $15 back to the American people for every dollar invested in health care investigations and prosecutions.
28 State False Claims Acts:
In recent years, significant Medicaid recoveries have returned hundreds of millions of stolen dollars back to the states. In order to increase the amount of money coming back to them, and to initiate their own recoveries, 28 states and the District of Columbia have now passed their own versions of the federal False Claims Act.
Congress created IRS and SEC whistleblower offices:
Along with state False Claims Acts, the success of the federal False Claims Act has also spurred the creation of an IRS Whistleblower Office focused on large tax frauds (over $2 million per recovery) and an SEC Whistleblower Office designed to end market manipulations and massive stock swindles.
About the Top Ten Cases:
4 All of the top ten federal False Claims Act settlements in FY 2010 involved health care, with eight involving fraud committed by pharmaceutical companies.
4 Of 145 False Claims Act cases settled or resolved in FY 2010, the top 10 cases accounted for $2.7 billion of the more than $3.16 billion recovered.
To compare these results to last year's statistics >> click here
Major False Claims Act Cases
Resolved in Fiscal Year 2010
Nature of the fraud
Off-label marketing practices involving Botox
AstraZeneca LP and AstaZeneca Pharmaceuticals LP
Illegally marketed the anti-psychotic drug Seroquel
Novartis Pharmaceuticals Corporation
Unapproved promotion of Trileptal
Forest Laboratories Inc. and Forest Pharmaceuticals, Inc.
Marketed the thyroid drug Levothroid without FDA approval and unlawfully promoted the two antidepressants Celexa and Lexapro for pediatric use.
The Elan Corporation, PLC
Improperly sold and marketed the antiepileptic drug Zonegran
Set and reported inflated prices for medications dispensed by pharmacies and other providers, who were then reimbursed by state Medicaid programs
WellCare Health Plans Inc. 
Defrauded Medicare and Medicaid programs in several states.
Mylan Pharmaceuticals, et al. 
The companies improperly classified certain drugs to evade rebate obligations.
Omnicare Inc. and IVAX Pharmaceuticals
Omnicare engaged in kickback schemes with several parties, including IVAX.
The Health Alliance of Greater Cincinnati (and The Christ Hospital)
Violated the Anti-Kickback Statute and the False Claims Act by paying unlawful remuneration to doctors in exchange for referring cardiac patients to The Christ Hospital in a pay-to-play scheme
Violated the False Claims Act and the federal Anti-kickback Act by misrepresenting its commercial pricing practices and by fraudulently inducing the General Services Administration (GSA) to enter into a higher contract
Ortho-McNeil -Janssen Pharmaceutical LLC
These two Johnson & Johnson subsidiaries engaged in off-label promotion of the epilepsy drug Topamax.
Novartis Vaccines & Diagnostics Inc. and Novartis Pharmaceuticals Corporation
The company caused false claims to be submitted to federal health care programs for certain off-label uses of TOBI.
University of Phoenix
The university unlawfully accepted federal funds while in violation of statutory and regulatory provisions prohibiting post-secondary schools from paying admissions counselors certain forms of incentive-based compensation tied to the number of students recruited.
Defrauded the government as part of a student loan subsidy program
Hewlett-Packard Co. (HP)
Knowingly paid kickbacks to systems integrator companies Sun Microsystems and Accenture in exchange for recommendations that the agencies purchase HP products
Cisco Systems Inc. and Westcon Group
The companies knowingly provided incomplete information to GSA contracting officers during negotiations regarding Westcon's contract with the agency
Knowingly underpaid royalties owed on natural gas produced from federal and Indian leases
The company paid kickbacks to health care providers to induce them to promote or prescribe Kadian and made misrepresentations about the safety and efficacy of the drug.
James Jones Company LLC; Mueller Co. Ltd.; Tyco International; and Watts Water Technologies
Provided substandard parts for water supply systems
Mobil Natural Gas Inc.
Knowingly underpaid royalties owed for pumping natural gas produced from federal and American Indian leases
McAllen Hospitals L.P. 
Violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute by paying kickbacks to doctors.
Ciena Capital LLC
(and subsidiary Business Loan Center (BLC))
Submitted false claims for payment on loans they originated, underwrote, and serviced.
FORBA Holdings LLC
Billed state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid
Nursing Personnel Home Care; Extended Home Car; Excellent Home Care
Three home health agencies submitted false claims to the New York Medicaid and Medicare programs regarding the training requirement of home health aides.
MPC Products Corporation
+ 2,500,000.00 criminal fine
The company overcharged the government in a series of military contracts.
Boston Scientific Corporation
Guidant, a subsidiary company, used post-market studies to pay kickbacks to physicians
Schwarz Pharma Inc.
Misrepresented the regulatory status of two unapproved, unqualified drugs— Deponit and Hyoscyamine Sulfate Extended Release
The company inflated the price of Albuterol and other drugs
Defrauded the Medicaid programs in Michigan and Massachusetts by knowingly charging the agencies as much as four times the amount charged private healthcare insurers for the same drugs
Eli Lilly and Co.
Promoted unapproved off-label uses of its anti-psychotic drug, Zyprexa
Overcharged 21 New York school districts and the SUNY system
Dr. Sushil Sheth
Sheth submitted false claims to seek payment from Medicare and Medicaid for services that were not performed.
Renal Care Group, Renal Care Group Supply Company, and Fresenius Medical Care Holdings, Inc.
Billed Medicare for home dialysis supplies and equipment that did not qualify for the program
Bell Helicopter Textron Inc.
Overcharged the government on certain contracts
The company and four of its subsidiaries conspired to submit rigged bids, fix prices and allocate market shares on marine fenders and plastic pilings purchased by the U.S. Navy and other federal departments and agencies.
Mariner Health Care Inc. and SavaSeniorCare Administrative Services LLC
Solicited kickback payments from Omnicare
St. John Health System
Billed Medicare and Medicaid for referrals from doctors with whom the providers have a financial relationship
Northrop Grumman Systems Corporation
Knowingly submitted false claims regarding electronic parts supplied for navigation systems for military aircraft, military submarines and for certain equipment used in space, to a number of government agencies
Dr. Todd J. Scarbrough and Melbourne Internal Medicine Associates P.A.
Defrauded Medicare and TRICARE by improperly inflating claims
Intercare Health Systems (and Robert Bourseau and Rudra Sabaratnam)
Billed Medicare and Medi-Cal for a variety of medical services not offered and for performing unnecessary medical services on homeless people
Tutor Perini Corporation
Fraudulently reported that certain minority and disadvantaged business enterprises (DBEs) were performing subcontracted work on federally funded construction projects in the New York City area
Visiting Physicians Association
Submitted false claims to Medicare, TRICARE and the Michigan Medicaid program, for unnecessary services
The health care facilities submitted false claims to Medicare involving kyphoplasty.
Our Lady of Lourdes Health Care Services, Inc.
Two New Jersey hospitals fraudulently inflated charges in order to obtain higher reimbursement from Medicare.
Wright Medical Technology Inc.
The company’s fraudulent marketing practices caused false claims to be submitted to Medicare
The University of Chicago Medical Center
Sought reimbursement from the Illinois Medicaid program for care provided to babies in its Wyler Children’s Hospital on days when the NICU exceeded Illinois state regulations on bed spacing and capacity
Dominion Oklahoma Texas Exploration & Production Inc. and Marathon Oil Company
The companies knowingly underpaid royalties owed on natural gas produced from Federal and American Indian lands
Imported and marketed bullet-proof vests containing defective Zylon fiber
Robert Wood Johnson University Hospital
The hospital defrauded Medicare by inflating its charges to obtain supplemental outlier payments
Cardinal 110 and Bindley Western Industries, Inc.
The companies charged medical treatment facilities more than the Distribution and Pricing Agreement (DAPA) price negotiated by the Department of Defense and drug manufacturers.
Saint John's Health
The hospital submitted false, inflated claims to increase Medicare “outlier payments.”
Grand Canyon Education Inc. (formerly Significant Education, Inc.),
Repeatedly violated the incentive compensation ban placed
+ $100,000 forfeiture
The company illegally imported unapproved medical devices and provided them to physicians for use in patients.
Learning Tree International Inc.
Improperly invoiced federal agencies and retained money paid for information technology training courses that were not provided
Lincoln Fabrics Ltd.
Manufactured and sold defective Zylon bullet-proof vests
St. Jude Medical Inc.;
Parma Community General Hospital; and Norton Healthcare
St. Jude paid illegal kickbacks to two hospitals to secure heart-device business
The company marketed its surgical ablation devices for uses not approved by the U.S. Food and Drug Administration (FDA).
Kaiser Entities in Northern and Southern California (4)
Falsely reported that services had been provided by teaching physicians when the services had been provided by resident physicians without the supervision of teaching physicians.
Actavis Elizabeth LLC
Reported false and inflated prices to drug industry price reporting services, which caused the Massachusetts Medicaid Program to pay inflated amounts for ingredient costs on prescriptions for Medicaid recipients
National Cardio Labs LLC
Knowingly submitted false health care claims to defrauded Medicare, Medicaid, and TRICARE
Eon Labs Inc.
Submitted false claims to Medicaid regarding the regulatory status of Nitroglycerin Sustained Release (SR) capsules
Christiana Care Health System
CCHS submitted false claims to Medicare and Medicaid
Trinitas Regional Medical Center
Hospital fraudulently inflated charges to Medicare patients to obtain higher reimbursements from Medicare
Kerlan-Jobe Orthopaedic Clinic
Received illegal kickbacks from HealthSouth Corporation
Pratt & Whitney Rocketdyne, Inc.
Improperly billed NASA following a company merger
Brookhaven Memorial Hospital Center
The hospital fraudulently inflated its charges to Medicare patients to obtain enhanced reimbursement from the federal health care program.
Metropolitan Ambulance & First Aid Corp. et al.
Billed Medicare for medically unnecessary ambulance trips
Mercy Hospital Inc.
The hospital failed to provide, or failed to document that it provided, the minimum number of hours of rehabilitation therapy required under Medicare guidelines
Lawrence D. Jaeger, D.O.
Made false representations to Medicare, Medicaid and the New York Medicaid program and fraudulently obtained a certification from the New York State Department of Health that allowed him to receive more than five times his usual Medicaid reimbursement.
Health Alliance of Greater Cincinnati et al.
Violated the Anti-Kickback Statute and the False Claims Act by engaging in a kickback-for-referral scheme
Sierra Military Health Services LLC
Over-billed the federal government and filed false claims in a double-payment profit scheme
El Centro Regional Medical Center
Fraudulently inflated its charges to Medicare patients to obtain larger reimbursements
Omni Home Care
Failed to obtain certain required physician approvals before submitting bills for home health services to Medicare.
Kaiser Foundation Hospitals
Billed Medicare for hospice services that had been provided without obtaining written certifications of terminal illness required under the federal health care program
Benchmark Rehabilitation Partners, LLC
Improperly billed the Medicare and TennCare/Medicaid programs for physical therapy services
Circle C Construction LLC
The company failed to take steps to ensure that accurate employee information was submitted by its electrical subcontractor.
Rush University Medical Center
Violated the False Claims Act and the Stark Act by entering into certain leasing arrangements for office space
Madison Memorial Hospital
False billing for speech therapy
The company provided false information to the E-Rate program and otherwise violated the program’s requirements by engaging in non-competitive bidding practices for E-Rate contracts.
The company received kickbacks through a durable medical equipment scam.
Stryker Biotech LLC
Marketed certain orthopedic products for uses that had not been approved by the U.S. Food & Drug Administration
Failure to ballistically test armor plated inserts for Black Hawk helicopters
Center for Diagnostic Imaging
Medicaid billing fraud
RG Pharmacy, Inc. (and Roy D. Katz)
Made excessive, illegal charges for prescription drugs under the Connecticut Medicaid Program; submit claims for fraudulent dispensing fees
Ambulance Services, Inc.
Made misrepresentations to Medicare and Medicaid
Stephen E. Ginsberg
Submitted false claims to Medicare for reimbursement in connection with podiatric services
Educational Broadcasting Corporation
Engaged in improper accounting practices when it failed adequately to segregate federal award money from other funds, and improperly used federal award money to cover unallowable and unsupported costs
Advanced BioNutrition Corp.
Submitted false grant progress reports to the National Science Foundation
Glendale Memorial Hospital, Catholic Healthcare West
Violated the Violated the Anti-Kickback Statute and the False Claims Act by paying kickbacks for referrals
Violated the Anti-Kickback Act and the False Claims Act by illegally paying physicians to prescribe devices manufactured by Cochlear Americas to Medicare and Medicaid patients
Diebold Information and Security Systems LLC
Failed to submit required suitability documentation to the Social Security Administration (SSA) for a number of subcontractor personnel
Houston Independent School District
Provided false information to the FCC’s E-Rate program
Wheaton Community Hospital
Knowingly made false claims to Medicare for unreasonable and unnecessary hospital admissions
SCCI Hospitals of America
Billed Medicare for services that were unnecessary
Chugach Management Services, Inc.
Overbilled on four fencing projects at Joint Base Lewis-McChord
The Morganti Group, Inc.
Submitted false pre-qualification documents when bidding on construction projects in Jordan
Quantum Dynamics Inc.
Obtained contracts from the U.S. Army after fraudulently qualifying for the Small Business Administration’s (SBA) Historically Underutilized Business Zone (HUBZone) program
Capital Health System, Inc.
The hospital defrauded Medicare by inflating its Medicare reimbursement claims to obtain supplemental outlier payments
Improperly billed Medicare and TRICARE for speech therapy sessions
Northrop Grumman Corporation
Northrop submitted false claims to the government and improperly charged for lodging expenses for employees
Khosrow Moghaddam (and Sasha Pharmacy and K&S Pharmacy Inc.)
Sought inflated reimbursement from Medicare for medical equipment that was not medically necessary
County of Siskiyou
Ineligible to receive grant funds through the Southwest Border Prosecution Initiative
Made false statements to the U.S. Department of Housing and Urban Development (HUD) on an application for government insurance of a mortgage loan.
Genesys Health System
Billed Medicare for higher levels of service than were actually rendered to patients
Physicians Clinic of Spokane
Billed medically unnecessary tests to Medicare
Wackenhut Services, Inc.
Submitted unallowable cost proposals to the government
The Oaks Diagnostics, Inc. (dba Advanced Radiology)
The company filed false claims with Medicare for unnecessary radiological tests.
+ $1,000,000 in criminal fines and penalties
The company submitted false claims to Medicare and Missouri Medicaid; failed to provide adequate care.
Minnesota Autism Center
Improperly billed the federal Medicaid program for autism therapy services
Anil Kumar, M.D.
Submitted false (upcoded) claims for payment to Medicare, Medicaid and other federal programs
Army Fleet Support, Inc.
Made false certifications when it provided certain helicopters to the U.S. Army that did not have bolts that were “Type Certified”
University System of Georgia
(Fort Valley State University)
Made false claims and falsely certified compliance with requirements of an agreement with NSF
Dr. Kevin S. Klopfenstein
Falsely billed Medicare for Thoracic Electrical Bioimpedance (TEB) tests, claiming that the patients who received the tests met applicable Medicare coverage requirements when, in fact, the patients did not.
Lexington Foot and Ankle, P.S.C.
Submitted false claims to Medicaid, Medicare and the Office of Personnel Management
Jaya H. Maddur, M.D.
Misrepresented services rendered; submitted claims for payment to TRICARE
Mercy Medical Center
The Medical Center inflated its charges for certain inpatient heart procedures to obtain additional reimbursement from Medicare, Medicaid, Tricare, and Federal Employees Health Benefits Program.
The Floating Hospital
Submitted false claims to Medicaid for reimbursement in connection with physical, occupational, and speech therapy services
The company paid kickbacks to Kellogg, Brown & Root (KBR) employees in exchange for favorable treatment on subcontracts provided for US military operations.
Idaho Falls Recover Center
False billing for speech therapy
Franklin Rural Health Care Clinic
Fraudulently billed Medicare and Medicaid for non-covered medical services
Dr. Patrick Grisafi
Submitted upcoded and inflated claims for podiatric services to Medicare
Novation, LLC (and Becton Dickinson and Company and VHA Inc.)
Kickbacks solicited from a hospital group purchasing organization and paid by a medical device supplier
Hines Dermatology Associates, Inc.
Billed Medicare for unnecessary pathology services
Harbor Senior Concepts, LLC
Provided substandard or worthless services to people covered by the Medicare and Medicaid programs
Arthritis and Allergy Associates
Improperly billed Medicare for facet joint blocks/injections and allowed inappropriate staff members to prepare and administer antigens.
Falsely billed Medicare and Medicaid diabetic supplies that were never delivered
William Crittenden, M.D
Upcoded billing data for visits made to nursing homes and other assisted living facilities
Dr. Barbara Kage and
Rheumatology & Allergy Institute Of Connecticut, LLC (RAI)
Improperly billed Medicare.
Trinity Health-Michigan (St. Joseph Mercy Oakland Hospital)
Improperly billed Medicare for medical services performed by nurse practitioners, clinical nurse specialists, and physician assistants.
Convenient Care Clinic, LLC
The company made false statements to a federal healthcare program; committed health care fraud; and embezzled from an employee benefit plan.
Shirley M. Estrada and Marcus R. Estrada
The Estradas fraudulently charged Medi-Cal for supplies, forged physician signatures, and fraudulently used physician provider numbers in order to receive reimbursement under the Medi-Cal program.
Johnson Memorial Hospital
Overbilled Medicare infusion therapy, chemotherapy administration, and blood transfusion services
Dr. David Quang Pham, DPM
+ $70,000.00 restitution
Submitted falsified treatment notes for services that he had not provided
Tucson Orthopedic Institute
False billing for DME
Somerset Industries, Inc.
Somerset concealed, mislabeled, and/or
altered packaging of some food products sold to the Bureau of Prison
Michelle Dahlberg, Speech and Language Clinic
False billing for speech therapy
Premier Medical Staffing, Inc. and Southern New Hampshire Medical Center
SNHMC agreed to pay the federal government $33,400 to resolve allegations it submitted claims to federal healthcare programs for services rendered by a nursing assistant who was excluded from participating in the programs. Premier Medical Staffing agreed to pay $90,000 to resolve similar allegations.
Thomas Greco, M.D., P.C.,
Submitted false claims to Medicare for infusion therapy services that were not rendered
Happy Teeth, LLC
Knowingly submitted Medicaid claims for services performed by a dentist barred as a Medicaid-authorized provider
Fairfield County Healthcare Associates, P.C.
(Pediatric Healthcare Associates)
Improperly billed Medicaid using a “special services” code
Milford Pediatric Group, P.C.
Improperly billed Medicaid using a “special services” code
Bloomsburg University of Pennsylvania
+ $1,200.00 restitution
Bloomsburg’s administration knowingly allowed a student named Walter Watkins to engage in the fraudulent acquisition of Federal Student Aid through the Federal Work Study program.
Failed to take sufficient steps to safeguard confidential data while working on a GPO contract to produce plastic Medicare beneficiary cards
 The company will pay $225 million to resolve civil allegations and a $375 million criminal fine.
 Under the settlement agreement, the company agreed to plead guilty to a misdemeanor count and pay a $185 million fine. The company also agreed to pay $237.5 million to resolve civil allegations over the promotion of Trileptal for uses not approved by the U.S. Food and Drug Administration, and for paying kickbacks to doctors to prescribe that drug and five others: Diovan, Exforge, Sandostatin, Tekturna and Zelnorm
 As part of the civil settlement, $149 million will be put toward federal and state civil claims while the rest will be put toward a criminal penalty ($150 million) and forfeit of assets ($14 million). Over $88 million will be distributed to the federal government and more than $60 million will be distributed among the states involved.
 WellCare Health Plans Inc. agreed to pay $137.5 million to settle fraud allegations with the U.S. Attorney's Office in Tampa, the U.S. Department of Justice, and the state of Connecticut. The company also agreed to pay $200 million to settle a class-action securities lawsuit.
 Mylan paid $60.9 million to the federal government, $49.8 million to state governments and $7.3 million to entities that participated in the Public Health Service's Drug Pricing Program, to resolve claims regarding several drugs, including ibuprofen tablets, Cephalexin and Cefactor.
AstraZeneca paid $1.43 million to the federal government and $1.17 million to state governments to resolve claims involving the bronchial medication Albuterol.
Ortho-McNeil paid a total of $3.4 million, including $1.87 to the federal government, to resolve claims involving the topical corticosteroid Dermatop.
 Omnicare Inc. agreed to pay $98 million IVAX Pharmaceuticals agreed to pay $14 million. Approximately $68.5 million of the settlement proceeds went to the United States, while $43.5 was put toward Medicaid program claims by participating states.
 The University of Phoenix agreed to pay the US $67.5 million, plus $11 million in private attorney fees
 The federal government will receive $25,208,333 and the state of Texas will receive $2,291,667
 “The lawsuit also alleged that Frank March, of Sevierville, Tennessee, and two Virginia corporations he formerly held a controlling interest in -- SHI, Inc. and SII, Inc. -- .. participated in the conspiracy with Trelleborg Inc. March has paid $1 million to resolve the allegations.” (DOJ)
 Nine Hospitals—Ball Memorial Hospital, Muncie, Ind.; Bethesda Memorial Hospital, Boynton Beach, Fla.; Bloomington Hospital, Bloomington, Ind.; Genesys Regional Medical Center, Grand Blanc, Mich.; Huntsville Hospital, dba The Health Care Authority of the City of Huntsville, Huntsville, Ala.; Palmetto Health dba Palmetto Health Baptist Hospital, Columbia, S.C.; St. Elizabeth Medical Center, Utica, N.Y.; St. Mary’s of Michigan Hospital, Saginaw, Mich.; and United Hospital, St. Paul, Minn.
 St. Jude agreed to pay $3,725,000. Parma Community General Hospital agreed to pay $40,000. Norton Healthcare agreed to pay $133,300.
 Metropolitan Ambulance & First Aid Corp. (now known as SEZ Metro Corp.), Metro North Ambulance Corp. (now known as SEZ North Corp.) and Big Apple Ambulance Service Inc. (formerly known as United Ambulance)
 The United States District Court in St. Louis, Missouri also sentenced CHC to five years probation and ordered it to pay restitution in the amount of $17,678.13.