Hospice Company Admits False Claims; Pays $1.8M

Kaiser Northwest Region Hospice self-disclosed to the Inspector General for Health and Human Services that it billed Medicare for patients before obtaining written certifications of terminal illness, according to DoJ. As a result of the disclosure, Kaiser and related entites Kaiser Sunnyside Medical Center, Kaiser Foundation Health Plan of the Northwest and Northwest Permanente agreed to pay $1,830,322.41 to settle False Claims Act liability.

“By requiring that health care providers comply with Medicare’s standards, we ensure that beneficiaries receive hospice care that is medically necessary and meets appropriate medical standards,” — Tony West, Assistant Attorney General for the Justice Department’s Civil Division

Earlier this year, Frohsin & Barger settled the country’s largest Medicare Hospice fraud lawsuit under the federal False Claims Act, recovering nearly $25 million in taxpayer dollars in what the Inspector General has reported as one of the top Medicare fraud cases of 2009.

To report Medicare Hospice fraud, contact Frohsin & Barger.

Bunker Buster Bombs Contract a Bust, Says DoJ

Kaman Dayron Inc. violated the False Claims Act by knowingly supplying faulty fuses for “bunker buster” bombs under a lucrative DoD contract, alleges a civil suit filed by the United States on friday. Assistant Attorney General Tony West said that the defective ignition devices pose “a safety risk to our military,” and the parts supplied by Kaman Dayron have been “quarantined,” according to DoJ. As the name implies, Bunker Busters are a type of bombs designed to penetrate deep underground and through reinforced concrete before exploding.

To report defense contracting fraud, contact Frohsin & Barger.

Bottled Water Bribery; Army Officers & Kuwati Companies Sued

DoJ has announced a civil lawsuit against former Army officers John Cockerham Jr. and James Momon Jr. and Kuwaiti companies Green Valley Co., Palm Springs General Trading and Contracting Establishment, and Jireh Springs General Trading and Contracting Establishment. The suit alleges that the companies paid Cockerham and Momon in order to get lucrative contracts to supply bottled water, tents and wastewater removal services from Kuwaiti-based Army camps. The contracts were awarded Blanket Purchase Agreements, a simplified acquisition method that federal agencies use to fill anticipated repetitive needs for supplies or services. Both of the former Army officers previously pleaded guilty to related crimes and await sentencing.

To report defense contracting fraud, contact Frohsin & Barger.

U.S. Intervenes in False Claims Suit Against Psychiatric Center

A Virginia psychiatric treatment center for pre-teen and teenage boys cheated its vulnerable adolescent patients and the Medicaid program, says DoJ and several former therapists who have emerged as whistleblowers. A qui tam lawsuit has been unsealed recently against Universal Health Services Inc., Keystone Marion LLC, and Keystone Education and Youth Services LLC d/b/a Keystone Marion Youth Center.

To report Medicaid fraud, contact Frohsin & Barger.

JP Morgan Coughs Up $722 Million Over “Pay-to-Play” Allegations in JeffCo Alabama Bond Deals

According to the Security and Exchange Commission, J.P. Morgan paid “hefty secret fees to local firms with ties to county commissioners” to get Jefferson County, Alabama’s bond business, catapulting the County into a public scandal, including federal convictions of former County commissioners and local businessmen and the threat of County bankruptcy. Today, J.P. Morgan agreed to pay a penalty of $25 million to the SEC, make a payment of $50 million to Jefferson County, and forfeit more than $647 million in claimed termination fees for a total of $722 million to settle the allegations.

The SEC alleges that J.P. Morgan Securities and former managing directors Charles LeCroy and Douglas MacFaddin made more than $8 million in undisclosed payments to close friends of certain Jefferson County commissioners. The friends owned or worked at local broker-dealer firms that performed no known services on the transactions. In connection with the payments, the county commissioners voted to select J.P. Morgan Securities as managing underwriter of the bond offerings and its affiliated bank as swap provider for the transactions.

J.P. Morgan Securities did not disclose any of the payments or conflicts of interest in the swap confirmation agreements or bond offering documents, yet passed on the cost of the unlawful payments by charging the county higher interest rates on the swap transactions.

“The transactions were complex but the scheme was simple. Senior J.P. Morgan bankers made unlawful payments to win business and earn fees,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.

Former County Commisioner and Birmingham Mayor Larry Langford was convicted last week for accepting bribes related to municipal bond offerings and swap agreement transactions that he directed on behalf of Jefferson County while serving as president of the County Commission.

Taped phone conversations indicated that J.P. Morgan’s broker-dealer and affiliated bank knew the payments were “payoffs” and J.P. Morgan directors LeCroy and MacFadden referred to the payments as “giving away free money” and “the price of doing business.” According to the SEC, the phone tapes indicate that J.P. Morgan’s attitude was: “Whatever you want — if that’s what you need, that’s what you get — just tell us how much.”

To report government fraud and abuse, contact Frohsin & Barger.

AtriCure Announces Near $4 Million False Claims Act Settlement

This morning, medical device company AtriCure, Inc. announced that it would pay $3.8 million plus interest over the next five years to settle allegations that it fraudulently marketed its cardiac ablation devices and that it instructed hospitals to use inncorrect billing codes to falsely inflate Medicare reimbursements.  The company also disclosed that it will enter into a Corporate Integrity Agreement with Health and Human Services.   As of the time of this posting, DoJ had made no public comment on the pending settlement.

To report Medicare fraud, contact Frohsin & Barger.

Nursing Home Pharmacy Giant Settles Kickback Claims

Omnicare Inc., the self-described nation’s largest nursing home pharmacy, has agreed to pay $98 million to settle a variety of kickback scheme allegations made by the Government and a corporate whistleblower, says DoJ. Drug manufacturer IVAX Pharmaceuticals will pay $14 million to settle its alleged role in the kickback scheme. Nursing home chain Mariner Health Care, Inc. and SavaSeniorCare Administrative Services together with their principals Leonard Grunstein, Murray Forman, and Rubin Schron are alleged in a separate whistleblower suit intervened by DoJ for accepting kickbacks from Omnicare.

“These defendants broke the law to take advantage of our nation’s most vulnerable citizens – the elderly and the poor.“
— Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.

According to the allegations, Omnicare solicited and recieved kickbacks from Johnson & Johnson in multiple forms, “including rebates that were conditioned on Omnicare engaging in an ‘Active Intervention Program’ for Risperdal and payments disguised as data purchase fees, educational grants, and fees to attend Omnicare meetings.” In turn, according to the allegations, Omnicare paid kickbacks “to nursing homes by providing consultant pharmacist services at rates below the company’s cost and below the fair market value of such services in order to induce the homes to refer their patients to Omnicare for pharmacy services.”

To report Antikickback violations and other Medicare fraud, contact Frohsin & Barger.

Houston Clinic Owner Admits “Arthritis Kit” DME Fraud

Noel Wayne Jhagroo admitted his part in a health care fraud conspiracy that billed Medicare for unneccesary “arthritis kits” (also called “arthro kits”), says DoJ.  Through his company Trucare Medical Equipment Services, Jhagroo bilked the taxpayers out of nearly a million dollars for unneccesary and non-delivered durable medical equipment (DME). In addition to making false claims for unnecesary DME, Jhagroo paid kickbacks to a co-conspirator for referals of Medicare patients in violation of the Antikickback Statute and Stark law. The indictment of Trucare was reported by FraudBlawg as part of a recent sweep of allegedly fraudulent DME suppliers in Houston and Los Angeles.  DME fraud is becoming an ever-popular and incredibly lucrative crime. Jhagroo will be sentenced on Feb. 23, 2010.

To report DME fraud or Medicare fraud in general, contact Frohsin & Barger.

Fraud Update: Haas Pleads Guilty to Conspiracy at EPA Superfund Site

FraudBlawg reported in September that three subcontractors had been indicted for kickback and fraud conspiracies at federal Superfund sites in New Jersey. According to the DoJ,  James E. Haas Jr., a former representative of a subcontractor that provides common backfill, a type of soil material used to refill an excavation, pleaded guilty to charges that he engaged in a kickback and fraud conspiracy at the Federal Creosote Superfund site in Manville, N.J.

Haas admitted to paying kickbacks to former employees of a prime contractor at Federal Creosote in exchange for the award of a subcontract. He also admitted to inflating prices for the subcontract to include the amount of the kickbacks paid to his co-conspirators. Haas also pleaded guilty to committing fraud against the United States

The remaining defendants, John A. Bennett and Gordon D. McDonald are presumed innocent and await trial, which is set for Jan. 5, 2010. Separately, Frederick Landgraber was sentenced to serve five months in jail, five months of home detention and to pay a $5,000 criminal fine for his role in a related kickback and fraud conspiracy. “To date, a total of three companies and eight individuals have pleaded guilty as a part of the investigation,” says DoJ.

To report government fraud and abuse, contact Frohsin & Barger.

Another Co-Conspirator Pleads Guilty to Medicare Fraud at Detroit Clinics

Friday Daisy Martinez pleaded guilty to conspiracy to defraud the Medicare program, says DoJ, following earlier guilty pleas by co-defendants Jose Rosario, Lil Vargas-Arias, and Arnaldo Rosario in related Detroit cases previously reported by FraudBlawg here, here, here, and here. Martinez operated various bogus Medicare clinics in the Detroit area, including Sacred Hope Medical Center, Inc.; Xpress Center, Inc.; and Dearborn Rehab Center. The conspiracy involved falsifying Medicare documents, bribing Medicare beneficiaries with cash and narcotics prescriptions, and billing Medicare for unnecesary and phantom procedures, resulting in nearly $11 million in false payments by Medicare. Martinez faces a maximum penalty of 10 years in prison and a $250,000 fine.

To report Medicare fraud, contact Frohsin & Barger.