Dental Management Company Preyed On Vulnerable Children; Will Return $24 Million To Taxpayers
January 27, 2010 by nick
The United States announced on January 20, 2010, the settlement of False Claims Act allegations against FORBA Holdings LLC, a dental management company that provides business management and administrative services to 69 clinics nationwide known as “Small Smiles Centers.”
Under the agreement, FORBA will pay the United States and participating states $24 million, plus interest, to resolve allegations that it caused bills to be submitted to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid, which is funded jointly by the federal and state governments. These services included performing pulpotomies (baby root canals), placing crowns, administering anesthesia (including nitrous oxide), performing extractions, and providing fillings and/or sealants.
FORBA has further agreed to put in place various remedial measures designed to prevent similar unlawful conduct from occurring in the future. The government’s investigation of individual dentists is ongoing, and FORBA is cooperating with that investigation by providing information about dentists who may have violated professional standards.
“We will not tolerate Medicaid providers who prey on vulnerable children and seek unjust enrichment at taxpayers’ expense,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “This settlement reaffirms our commitment to protect the health and well-being of Medicaid beneficiaries and to ensure the integrity of this essential health care program.”
The government’s investigation was initiated by three lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in any recovery. As part of today’s resolution, the three whistleblowers will receive payments totaling more than $2.4 million from the federal share of the settlement.
If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
Chevron Will Pay Over $45 Million For Underpaying Royalties
January 27, 2010 by nick
On December 23, 2009, the Department of Justice reported the settlement of a False Claims Act case involving Chevron Corporation, Texaco, Unocal Incorporated and their affiliates (the Chevron companies), for violating the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and Indian leases. The companies have agreed to pay the United States $45,569,584.74 to resolve the allegations.
The case was initiated by whistleblower Harrold Wright under the whistleblower provisions of the False Claims Act, which allow private citizens to file actions on behalf of the United States and share in any recovery. Because Mr. Wright is deceased, his heirs will receive $12,303,787.88, plus interest, as part of this settlement.
Each month, companies are required to report to the Minerals Management Service the value of the natural gas produced from their federal and Indian leases and pay a percentage of the reported value as royalties. This settlement resolves claims by the United States that the Chevron, Texaco and Unocal companies systematically under reported the value of natural gas they took from federal and Indian leases from March 1988 to November 2008 and so paid less in royalties then they owed.
Specifically, the companies were alleged to have 1) improperly deducted the cost of boosting gas up to pipeline pressures, 2) used affiliate transactions to fraudulently reduce the reported value of gas taken from federal and Indian leases, and 3) improperly reported processed gas as unprocessed gas to reduce royalty payments.
“This settlement successfully ends long-standing litigation and ensures that taxpayers receive their fair share of royalty revenues from energy production on federal and American Indian lands,” said Interior Secretary Ken Salazar. “Most of the $45 million settlement will be disbursed to appropriate federal, state and American Indian accounts that were affected by Chevron companies’ underpayment of natural gas royalties and improper deductions.”
The suit brought by Mr. Wright alleges that a number of companies systematically underpaid royalties due for their production of natural gas from federal and Indian lands. The Justice Department previously settled with Burlington Resources Inc. for $105.3 million, Shell Oil Company for $56 million and Dominion Exploration and Production Company for $2 million.
If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
Pharmaceutical Company Will Pay $21 Million for Overpricing Respiratory Drugs
December 24, 2009 by nick
On December 17, 2009, Bloomberg News reported that Schering-Plough Corp., a drug company, will pay $21.3 million to settle a False Claims Act lawsuit against it. The settlement stems from a whistleblower lawsuit against several drug companies accused of Medicaid fraud.
The suit alleged that Schering deliberately inflated the average wholesale price it reported to California for Albuterol, a treatment for asthma and other breathing problems, as well as other drugs. As a result, California’s Medi-Cal program overpaid millions of dollars in pharmacy reimbursements.
Schlering was recently acquired by Merck & Co. of New Jersey. Merck didn’t admit wrongdoing and said its pricing practices complied with regulations and contracts. The settlement amount was reserved and significantly funded by Schering-Plough prior to its merger with Merck in November, Merck said.
If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
University of Phoenix Caught Cheating Government; Will Pay $78.5 Million
December 24, 2009 by nick
On December 14, 2009, Earth Times reported the $78.5 million settlement of a False Claims Act lawsuit against the University of Phoenix. The lawsuit, which was started by whistleblowers, alleged that the University used false statements to obtain an excess of federal student loans and Pell Grant monies. Reportedly, the University was making incentive payments to recruiters based on the number of students they recruited or enrolled–a direct violation of the Higher Education Act.
“The Higher Education Act prohibits colleges and universities whose students receive federal financial aid from paying their recruiters based on the number of students enrolled, which creates a risk of encouraging recruitment of unqualified students,” explained Nancy Krop, another lawyer on the trial team. “This case focused a powerful spotlight on that law, and how Congress meant it to be applied.”
“The settlement is a huge victory for taxpayers and the federal government,” according to Robert J. Nelson, lead attorney for the whistleblower plaintiffs. “This settlement sends a clear message to the for-profit education industry compliance with the Higher Education Act’s incentive compensation ban must be achieved,” said Nelson.
The University of Phoenix, which denied the whistleblowers’ allegations, previously paid $9.8 million to the Department of Education in 2004 to resolve administrative claims that it was paying improper incentive compensation to its recruiters. Those administrative proceedings were triggered by the allegations of the same whistleblowers in this case. Nearly $11 million of the $78.5 million will be allocated as statutory attorneys’ fees and costs, a portion of which will be paid to the whistleblowers who brought the case.
The False Claims Act is a federal statute that permits whistleblowers to sue on behalf of the government for fraud committed against the government and to share in the recovery if the suit is successful.
If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
