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:

    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

Allergan Inc.[1]



Off-label marketing practices involving Botox

AstraZeneca LP and AstaZeneca Pharmaceuticals LP



Illegally marketed the anti-psychotic drug Seroquel

Novartis Pharmaceuticals Corporation[2]



Unapproved promotion of Trileptal

Forest Laboratories Inc. and Forest Pharmaceuticals, Inc.[3]



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

Teva Pharmaceuticals



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. [4]



Defrauded Medicare and Medicaid programs in several states.

Mylan Pharmaceuticals, et al. [5]



The companies improperly classified certain drugs to evade rebate obligations.

Omnicare Inc. and IVAX Pharmaceuticals[6] 



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

EMC Corporation 



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[7]




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

Chevron Corporation



Knowingly underpaid royalties owed on natural gas produced from federal and Indian leases

Alpharma Inc. 



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. [8]



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 

Schering-Plough Corporation



The company inflated the price of Albuterol and other drugs

Omnicare Inc.



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

Sodexo Inc.



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

Trelleborg AB[9]



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

 Nine hospitals[10]



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

Itochu Corp.



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

Spectranetics Corporation



+ $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[11]



St. Jude paid illegal kickbacks to two hospitals to secure heart-device business

Atricure Inc.



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.[12]



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

AT&T Missouri



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.

Harborside Healthcare



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

Ceradyne, Inc.



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

Cochlear Americas



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 

Memorial Hospital 



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

Robert Corp.



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.

Cathedral Rock



+ $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

Panalpina Inc. 



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. 

Medsource Inc.           



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.

Plastilam, Inc



Failed to take sufficient steps to safeguard confidential data while working on a GPO contract to produce plastic Medicare beneficiary cards






 Table Footnotes

[1] The company will pay $225 million to resolve civil allegations and a $375 million criminal fine.

[2] 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

[3] 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.

[4]  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. 

[5] 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.

[6] 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.

[7] The University of Phoenix agreed to pay the US $67.5 million, plus $11 million in private attorney fees

[8]  The federal government will receive $25,208,333 and the state of Texas will receive $2,291,667

[9] “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)

[10] 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.

[11]  St. Jude agreed to pay $3,725,000. Parma Community General Hospital agreed to pay $40,000. Norton Healthcare agreed to pay $133,300

[12] 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)

[13] 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.