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Axway to Settle Contract Fraud Claims For $6.2M; Whistleblower to Get $1.2M

Submitted by kludowitz on November 5, 2013
November 5, 2013
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Axway, Inc. has agreed to pay the United States $6.2 million to settle allegations under the False Claims Act that it and its predecessors  provided the General Services Administration (GSA) with defective pricing information in order to obtain and maintain a contract permitting them to sell software licenses and related services to federal agencies at inflated prices, the Department of Justice announced last week.

Axway, Inc. allegedly provided GSA with commercial pricing information that was not current, accurate and complete during the initial negotiation of the contract. As a result, the United States alleges that the contract that was awarded contained pricing that was less advantageous to the government than would have been negotiated had accurate and complete disclosures been made. In addition, the United States alleges that when the contract was renewed, Axway Inc. failed to provide GSA with accurate and complete commercial pricing disclosures. Finally, Axway Inc. failed to comply with the price reduction clause of the contract resulting in allegations from the United States that the contract contained inflated prices, and that numerous government agencies relied on these inflated prices and overpaid for their purchases of software and related services.

The lawsuit was originally filed by Kenneth Marcus, a former employee, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Marcus will receive $1.2 million as his portion of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government including, health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Infosys Corp. to Settle Fraud Claims for $34M

Submitted by kludowitz on November 1, 2013
November 1, 2013

Infosys Corporation has agreed to pay $34 million to settle allegations of systematic visa fraud and abuse of immigration processes, the U.S. Attorney’s Office announced earlier this week.  The $34 million payment made by Infosys, an Indian company involved in consulting, technology, and outsourcing, represents the largest payment ever levied in an immigration case.

Infosys brings foreign nationals into the United States in order to perform work and fulfill contracts with its customers under two visa classification programs, H-1B and B-1. The government alleged that Infosys knowingly circumvented the requirements, limitations and governmental oversight of the H-1B visa program by unlawfully using B-1 visa holders to perform skilled labor that would otherwise be performed by United States citizens or require legitimate H-1B visa holders.  The government also alleged that Infosys did so in order to increase profits, minimize costs of securing visas, increase flexibility of employee movement, obtain an unfair advantage over competitors and avoid tax liabilities.

The settlement agreement also requires additional auditing for I-9 forms; a reporting requirement for B-1 usage; an agreement to continue to use only detailed invitation letters and the continued use of corporate disciplinary processes for employees that violate the immigration laws of the United States.

The lawsuit was originally filed by Jack Palmer, a former Infosys employee in America, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Palmer’s case was dismissed last year by a federal judge but spurred federal investigation, and he could receive $5 million to $8 million as his share of this settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government including, health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

 

 

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U.S. Gov. Intervenes in False Claims Lawsuit Against United States Investigations Services LLC (USIS)

Submitted by kludowitz on October 30, 2013
October 30, 2013
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The government has intervened in a lawsuit filed under the False Claims Act against United States Investigations Services LLC (USIS) in the U.S. District Court for the Middle District of Alabama, the Department of Justice announced today. The lawsuit alleges that USIS failed to perform quality control reviews in connection with its background investigations for the U.S. Office of Personnel Management (OPM).

USIS was contracted with OPM to perform background investigations on individuals seeking employment with various federal agencies.  The contract at issue in the lawsuit required USIS to conduct the investigatory fieldwork on each prospective applicant.  It also required that a trained USIS Reviewer perform a full review of each background investigation to ensure it conformed to OPM standards before sending the file back to OPM for processing. 

According to the complaint, USIS engaged in a practice known at USIS as “dumping.”  Specifically, USIS used a proprietary computer software program to automatically release to OPM background investigations that had not gone through the full review process and thus were not complete. USIS allegedly dumped cases to meet revenue targets and maximize its profits.  The lawsuit alleges that USIS concealed this practice from OPM and improperly billed OPM for background investigations it knew were not performed in accordance with the contract. 

The lawsuit was originally filed by Blake Percival, a former employee of USIS, under the whistleblower provisions of the False Claims Act. The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.

The False Claims Act also permits the government to investigate the allegations made in the whistleblower’s complaint and decide whether to intervene in the lawsuit.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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Whistleblower Sues George Washington University for Retaliation

Submitted by mma on October 30, 2013
October 30, 2013
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John Lombardi has filed a lawsuit against his previous employer, George Washington University (GW), for unlawful termination in connection with his attempts to blow the whistle on GW’s contract fraud on the Department of State.

GW obtained subcontracts through Science Applications International Corporation (SAIC) for orders related to the federally funded Global Anti-Terrorism Training Assistance project, for which Lombardi was to be the Principal Investigator.  According to the complaint, GW allegedly attempted to engage in a “bait-and-switch” on SAIC and the federal government by replacing Lombardi as the Principal Investigator on certain contracts without notifying SAIC or the government that other, unqualified individuals would be performing the tasks.  The scheme would have resulted in federal tax dollars being used to pay a Principal Investigator that was not qualified, nor agreed upon in the contract.  Lombardi claims that when he tried to bring the matter to the attention of GW’s General Counsel, he was ignored, then his pay reduced, and finally his employment was terminated.

Lombardi filed the suit under the whistleblower provisions of the False Claims Act, which allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The False Claims Act also prohibits retaliation against the whistleblower.  Lombardi will be eligible for a share of the recovery should he prevail.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

PDFs: 
application/pdf iconlombardi_v_george_washington.pdf
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Complaint Filed Against Walgreens for Medicare Fraud Claims

Submitted by mma on October 29, 2013
October 29, 2013

Fox Rx, Inc. has filed a complaint against Walgreens Company in the federal district court of the Southern District of New York for violations of the False Claims Act.  Walgreens allegedly submitted or caused the submission of false claims to state and federal health care programs such as Medicare and Medicaid.

Fox Rx alleges that Walgreens routinely overbilled Medicare and Medicaid by failing to substitute generic drugs for brand-name medication, in violation of state laws that required Walgreens pharmacies to substitute equivalent generic drugs whenever possible.  Walgreens also allegedly dispensed expired drugs to Medicare and Medicaid beneficiaries.  These actions caused the U.S. government, as well as state governments, to pay more for prescription drugs than they should have.

The lawsuit was filed under the False Claims Act, which allows those with knowledge of fraud against the government to sue on behalf of the government and share a claim in the recovery.  According to the False Claims Act, the government may be awarded damages three times the amount of damages sustained by the government because of the false claims.  Fox Rx would receive 15 to 30 percent as their share of the recovery.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

PDFs: 
application/pdf iconfox_v_walgreens_1.pdf
application/pdf iconfox_v_walgreens_2.pdf
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Medicare Fraud Case Proceeds Against Citizens Medical Center

Submitted by mma on October 11, 2013
October 11, 2013

The lawsuit against Citizens Medical Center (Citizens), filed by Drs. Dakshesh Parikh, Harish Chandna, and Ajay Gaala, is moving forward after a federal judge denied the defendant’s motion to dismiss the case.  The doctors allege that Citizens violated the False Claims Act by knowingly submitting or causing the submission of false claims to federal health care programs (Medicare and Medicaid).

Citizens allegedly entered into improper financial relationships with and gave kickbacks to physicians in order to induce them to refer patients to the hospital, which is a violation of the Stark Law.  The doctors also allege that Citizens knowingly provided unnecessary or worthless medical services in order to increase its revenue, and that this was all part of a conspiracy to violate the False Claims Act.

Drs. Parikh, Chandna, and Gaala were former cardiologists at Citizens, and claim that they were retaliated against for refusing to participate in the above schemes.  They filed this suit under the False Claims Act, which allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

PDFs: 
application/pdf iconus_ex_rel_parikh_v_citizens_medical_center.pdf
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U.S. Govt Intervenes in False Claims Lawsuit Against Pinnacle Bank

Submitted by mma on October 8, 2013
October 8, 2013

The U.S. Attorney’s Office has intervened in a lawsuit against Pinnacle Bank (Pinnacle) in the U.S. District Court for the District of Wyoming, the U.S. Department of Justice announced last month.  The complaint alleges that Pinnacle made false statements to the United States Small Business Administration (SBA) regarding a loan under the SBA’s “504 Loan Program.”

Pinnacle Bank provided the Columbine Group, LLC, (developer of the hotel) with an interim construction loan for the AmericInn Lodge and Suites located in Laramie, Wyoming.  The government alleges that Pinnacle falsely certified to the SBA that it had no knowledge of any un-remedied substantial adverse change in Columbine’s financial condition since the date of the application for the SBA loan, that Columbine was current on its payments to Pinnacle and not otherwise in default of the loan, and that Pinnacle had disclosed to the SBA all material information known to it. Columbine later defaulted on its loans and the United States was required to use taxpayer dollars to repurchase the debenture pursuant to its guarantee.

The lawsuit was originally filed by Hospitality Management, Inc. (HMI), business operations manager for the hotel, under the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Should the United States government and HMI prevail in court, HMI will receive 15 to 30 percent of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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TCG Client Held Serves Six New 60-Day Notices

Submitted by kludowitz on October 4, 2013
September 26, 2013

TCG client Anthony Held served six new 60-Day Notices of Violation of Proposition 65 yesterday. The notices were served to companies offering products such as hand tools, bags and tableware for sale in California containing chemicals known to cause cancer or reproductive harm, without the required health hazard warning. Held alleges that the companies' products contain the phthalate DEHP, the flame retardant TDCPP, and the heavy metal lead (Pb). DEHP and lead are known to cause birth defects and reproductive harm while TDCPP is known to cause cancer. Some of the noticed companies include Crabtree & Evelyn., and Four Seasons General Merchandise.

See below for a partial list of Notices.

 

Product

Chemical

 Alleged Violator

Citizen Enforcer

Vinyl/PVC Gloves

DEHP

Bradshaw International, Inc.; Butler Home Products, LLC
 

Held

Toiletry Bags with Vinyl/PVC Components

DEHP

Crabtree & Evelyn, Ltd.
 

Held

Bowls with Exterior Designs containing Lead

 Pb

Four Seasons General Merchandise, Inc.
 

Held

Lamps with Vinyl/PVC Components

DEHP

Jimco Lamp & Manufacturing Company
 

Held

Cases with Vinyl/PVC Handles

DEHP

Punch Studio, LLC
 

Held

 

Read the most recent notices issued by clients of The Chanler Group

 

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Federal Judge Orders Tuomey to Pay $227M for Medicare Fraud Claims

Submitted by mma on October 2, 2013
October 2, 2013

A federal judge has ordered South Carolina-based Tuomey Healthcare System to pay $227 million for violations of the False Claims Act and the Stark Law. 

Tuomey Healthcare System was accused of signing 19 doctors to lucrative part-time contracts that paid well above fair market value in order to continue to receive the referral fees associated with those doctors’ procedures.  Paying doctors out of their referral fees constitutes an illegal kickback under Medicare law, and the U.S. government sought to recover all of the Medicare claims filed as a result of procedures performed by those 19 doctors between 2005 and 2009.

The lawsuit was originally filed by Dr. Michael Drakeford under the whistleblower provisions of the False Claims Act, which allows private citizens with knowledge of fraud to sue on behalf of the government and share in a portion of the recovery.  Drakeford’s share of the reward has yet to be determined, but according to The Item, he has said that his portion of the award will go toward charitable health care efforts in the Sumter community.

Tuomey is expected to appeal.  An out-of-court settlement may be in the works.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

PDFs: 
application/pdf icontuomey_order_and_opinion.pdf
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Diagnostic Labs to Settle Healthcare Fraud Claims For $17.5M; Whistleblower to Get $3.7M

Submitted by mma on September 25, 2013
September 25, 2013

California-based Kan-Di-Ki, doing business as Diagnostic Laboratories and Radiology (Diagnostic Labs) has agreed to pay $17.5 million to resolve allegations that the company violated both the federal and California False Claims Acts, the U.S. Department of Justice announced today.  Kan-Di-Ki allegedly paid kickbacks for the referral of mobile lab and radiology services that were subsequently billed to Medicare and Medi-Cal.

The government alleged that Diagnostic Labs took advantage of Medicare’s different reimbursement system for inpatient and outpatient services by charging discounted rates to California Skilled Nursing Facilities (SNFs) for inpatient services paid by Medicare, in exchange for referrals of outpatient business.  For inpatient services, Medicare pays a fixed rate based on the patient’s diagnosis, regardless of specific services provided.  For outpatients, Medicare pays for each service separately.  Diagnostic Labs’ scheme enabled the SNFs to maximize profit earned for providing inpatient services by decreasing SNFs’ costs of providing these services.  It also allegedly allowed Diagnostic Labs to obtain a steady stream of lucrative outpatient referrals that it could directly bill to Medicare and Medi-Cal.  The provision of inducements, including discounted rates, to generate referrals is prohibited by federal and state law.

The lawsuit was originally filed by Jon Pasqua and Jeff Hauser, former Diagnostic Lab employees, under the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Pasqua and Hauser will receive $3.75 million as their portion of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

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