CHRISTUS Medical Center and CHRISTUS Health to Pay More than $12 Million to Settle Alleged False Claims Act Violations
Earlier this month, the Department of Justice announced that CHRISTUS St. Vincent Regional Medical Center (St. Vincent) and its partner, CHRISTUS Health (CHRISTUS), have agreed to resolve allegations that they violated the False Claims Act by making illegal donations to county governments. These funds were ultimately used to fund the state’s share of Medicaid payments to the hospital. The providers have agreed to pay $12.24 million, plus interest as part of the settlement. “Congress expressly intended that states and counties use their own money when seeking federal matching funds,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Using local funds provides an incentive for the counties and states to, among other things, hold down costs rather than rely on non bona-fide donations by private providers.”
Under a program known as the Sole Community Provider (SCP) program, the state of New Mexico was to provide supplemental Medicaid funds to hospitals in mostly rural communities. Thus a restriction on permissible donations was placed on private hospitals. The federal government reimbursed the state of New Mexico approximately 75 percent of its health expenditures under SCP. The SCP program was created by Congress to curb possible abuses and to ensure that states had the means to curb rising Medicaid costs. The government alleges that between 2001 and 2009, St. Vincent and CHRISTUS allegedly made non-bona fide donations causing the presentment of false claims by the state of New Mexico to the Medicaid program. (New Mexico’s SCP was discontinued in 2014.)
“Protecting the integrity of the Medicaid program is crucial because millions of Americans, including hundreds of thousands of New Mexicans, depend on the program for medical care and related services,” said Acting U.S. Attorney James D. Tierney for the District of New Mexico. “This case illustrates our commitment to ensuring that government funds are legally obtained and used for their intended purposes. We will use all available civil remedies to recover the ill-gotten gains obtained by those who defraud government healthcare programs.” The settlement stems from a lawsuit originally filed by a former New Mexico Indigent Health Care Administrator under the qui tam provisions of the False Claims Act. Under these provisions, private individuals are permitted to sue on behalf of the government and to share in any subsequent recovery. In this case, the whistleblower will receive $2.249 million as her share of the settlement.
Huntington Ingalls Industries Inc. to Pay More than $9 Million to Settle False Allegations
Once again the government has proven that fraud and bribery are not victimless crimes. They impact taxpayers in every way. It proved this last week when it announced that Huntington Ingalls Industries (HII) – a defense contractor based in Newport, Virginia – has agreed to pay a $9.2 million settlement to resolve allegations that it violated the False Claims Act by deliberately overbilling for labor completed on U.S. Navy and Coast Guard ships. Under the settlement, HII will pay $7.9 million which will be combined with an earlier payment it made of $1.3 million. “Contractors that knowingly bill the government in violation of contract terms will face serious consequences,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This settlement demonstrates, once again, that we will not tolerate defense contractors who falsely charge the armed forces or any agency of the United States.”
The settlement resolves allegations that HII mischarged for labor it performed on various U.S. Navy and Coast Guard contracts dating back to 2003. HII is alleged to have
- Charged for labor on particular contracts even though the costs were not incurred by those contracts
- Billed for driver operations to support ship construction for work that did not occur.
“The Southern District of Mississippi will remain vigilant in identifying and prosecuting those involved in nefarious activities and fraudulent billing, which ultimately result in substantial cost overruns on Navy and Coast Guard shipbuilding projects,” said Acting U.S. Attorney Harold Brittain. Brittain also noted three earlier guilty pleas in a related criminal matter in the Southern District of Mississippi (United States v. N. R. Holden & R.G. Gardner, Criminal No 1:15-cr-42 HSO-RHW, United States v. R.M. Wilson, Criminal No 1:16-cr-34-LG-RHW.) “Contractors are expected to comply with their statutory obligations and act in good faith when dealing with the Department of Defense (DOD),” commented John F. Khin, Special Agent in Charge, Southeast Field Office, and Defense Criminal Investigative Service. “This settlement is the culmination of hard work by DCIS, our investigative partners, the Department of Justice, Civil Division, Commercial Litigation Branch, and the U.S. Attorney’s Office for the Southern District of Mississippi; and clearly demonstrates that combatting fraud, waste and abuse within DOD contracting remains a top priority.”
The labor mischarging allegations resolved by this settlement were originally raised in a lawsuit brought by Byron Faulkner, a former HII employee, under the qui tam, or whistleblower provisions of the False Claims Act. Under these provisions, private citizens are able to sue on behalf of the federal government for false claims and to share in any subsequent recovery. Mr. Faulkner will receive more than $1.5 million as his share of the settlement.
The Government files Complaint to Recover Millions of Grant Dollars it says the City of L.A. and CRA/LA Obtained Improperly
Sometimes alleged fraud and abuse occur on a much greater scale than that which is caused by private companies. This was proven to be the case when earlier this month, the Justice Department filed a complaint against the City of Los Angeles and the CRA/LA alleging that the two fraudulently obtained millions of dollars in housing grants from the U.S. Department of Housing and Urban Development (HUD) by falsely claiming that money was being spent in compliance with the government’s accessibility laws. The “complaint in intervention” replaces a complaint that was previously filed by a whistleblower. The complaint in intervention alleges that the city and CRA/LA received federal money by falsely promising to create accessible housing for the disabled. Instead of doing this, it is alleged that the two used the money to create inaccessible housing that actually deprived people with disabilities equal opportunity to housing of their choice.
According to the complaint, the city of L.A. repeatedly certified its compliance with federal accessibility laws in order to obtain federal funds even though it did not take the necessary steps to comply with said laws. Additionally, the complaint alleges that HUD-assisted apartment buildings provided by the city failed to meet even the minimal accessibility requirements. Among the items the city approved and which made the buildings fail to meet accessibility requirements are:
- slopes and ramps that were too steep for safe passage by persons with mobility disabilities;
- door thresholds that were too tall for wheelchairs to roll over;
- steps that prohibited access to common areas;
- sinks, grab bars, mailboxes and circuit breakers mounted beyond the reach of wheelchair users
“Despite the federal government investing hundreds of millions of dollars in Los Angeles to create housing for everyone, the City of Los Angeles instead created housing only for some,” said Acting U.S. Attorney Sandra R. Brown for the Central District of California. “For 17 years, the city falsely certified that it had complied with federal law and covered up its repeated disregard of historic and important civil rights laws.” The laws that the CRA/LA are alleged to have violated include Section 504 of the Rehabilitation Act (1973), the Americans with Disabilities Act (1990) and the Fair Housing Act (1968). These laws were passed by Congress in order to ensure that people with disabilities have equal access to housing and that they are able to become integrated into the larger society.
The accessibility laws for which the city of L.A. and CRA/LA are required to comply, stipulate that recipients of federal funds must operate housing that is in compliance and that they must also:
- Develop non-discriminatory policies and practices, hire a coordinator knowledgeable about accessibility, and implement a grievance procedure that allows for just resolution of complaints.
- Maintain a publicly available list of accessible units and their accessibility features so that people who require those features are able to find housing.
The city of LA and CRA/LA are alleged to have violated all of these requirements and many others. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act. These provisions permit private parties to sue on behalf of the federal government and to share in any subsequent recovery.
Mortgage Lending Company PPH Agrees to Pay $74 Million Settlement to Resolve Alleged False Claims Act Violations
The government’s crackdown on fraud and abuse has netted several companies who allegedly conspired to put both taxpayers and borrows at risk of significant financial losses. Last week, the Justice Department announced that mortgage lenders PPH. Corp, PPH Mortgage Corp. and PPH Home Loans have collectively agreed to pay it more than $74 million to resolve allegations that they knowingly originated and underwrote mortgage loans that did not meet applicable requirements for said loans. These loans were insured by agencies such as the U.S. Department of Housing and Urban Development (HUD), the Federal Housing Administration (FHA) and guaranteed by the United States Department of Veterans Affairs (VA), and purchased by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). PPH is slated to pay $65 million to the FHA and $9.45 million to the VA and FHFA.
“Government mortgage programs designed to assist homeowners — including programs offered by the FHA, VA, Fannie Mae and Freddie Mac — depend on lenders to approve only eligible loans,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure, or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.” Since January 2006, PPH has participated as a Direct Endorsement lender (DEL) in the FHA insurance program. As a DEL, PPH had the authority to originate, underwrite, and endorse mortgages for the FHA. Additionally, since PPH participated as a DEL, it was required to follow certain program rules for properly underwriting and certifying mortgages for the FHA.
As part of the settlement, PPH admitted to the following facts concerning the FHA loans:
- It failed to document borrowers’ creditworthiness including employment verification, credit reports etc.
- It failed to verify borrowers’ debt-to-income ratio.
- It failed to verify borrowers’ minimum statutory investment for their loan.
Moreover, PPH did not self-report any material violations of FHA requirements to HUD as required by the FHA until after 2013. It was first required to do so in 2006. As a result of these omissions and PPH’s conduct, PPH admitted that the loans they endorsed were not eligible for FHA mortgage insurance. This, the government maintains, caused HUD to incur substantial loses when it paid insurance claims on those loans. The settlement also resolves the government’s claims that PPH originated VA loans that did not meet that agency’s requirements. Finally, the settlement resolves the government’s allegations that PPH originated and sold loans to Freddie Mac and Fannie Mae that did not meet their requirements.
“This settlement resolves allegations of reckless origination and underwriting of VA guaranteed mortgage loans,” said Michael J. Missal, Inspector General, for the Office of Inspector General for the Department of Veterans Affairs (VA OIG). “It sends a clear message that the VA OIG will aggressively protect the integrity of this crucial program which helps so many of our veterans buy, build, or repair their homes. I would also like to thank the U.S. Attorney’s Offices for partnering with us to achieve this significant result.” The allegations resolved by these settlements came about as a result of a whistleblower lawsuit that was filed under the False Claims Act by Mary Bozzelli. Bozzelli is a former PPH employer who is scheduled to receive $9,067,377.33 from the settlements.
Financial Freedom Agrees to Pay Government $89 Million to Settle Allegations that it improperly serviced Federally Insured Reverse Mortgage Loans
Often the government crackdown on fraud and abuse affects some of society’s most vulnerable citizens – the elderly. The fact was demonstrated last month, when the Justice Department announced that Financial Freedom had agreed to a settlement with the United States for more than $89 million. The government alleged that the company – which is headquartered in Austin, Texas – violated the False Claims Act and the Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA) in connection with its participation in a ‘reverse mortgage’ program. “This settlement represents our office’s continued commitment to protecting the financial solvency of vital financial programs designed to benefit America’s seniors,” said Acting U.S. Attorney Stephen Muldrow of the Middle District of Florida. “HECM servicers must be held accountable for failing to adhere to FHA requirements that are designed to ensure the continued viability of the HECM program. We are pleased that Financial Freedom agreed to accept financial responsibility for these failures.”
Reverse mortgage loans are a financial instrument through which older people are able to access equity in their homes by borrowing against the equity they have built. The government protects – via the FHA – lenders from loss by providing mortgage insurance. Further, the FHA reimburses lenders who are unable to recoup the full amount of the loan. However, the loan servicer must first meet a number of regulatory requirements and deadlines before he/she is reimbursed. The United States alleges that from March 31, 2011 to August 31, 2016, Financial Freedom obtained additional interest on insurance payments that they were not entitled to receive. Financial Freedom allegedly did so by failing to meet appraisal deadlines, falling to submit claims to HUD and by neglecting to pursue foreclosure proceedings.
The investigation into Financial Freedom’s alleged practices arose from a declaration filed pursuant to FIRREA by Sandra Jolley. Jolley is a consultant for the estates of borrowers who took out the HECM loans. Under the FIRREA, whistleblowers may file declarations alleging violations of the statute and share in any subsequent recovery. Ms. Jolley will receive $1.6 million from the settlement.
“Today’s settlement agreement resolves allegations that this lender failed to comply with FHA servicing requirements and sought to receive financial gains that it was not legally entitled to,” said HUD Inspector General David A. Montoya. “These actions today demonstrate our continued commitment to address and halt business practices that pose a serious risk to the FHA program and the public’s trust in HUD administered programs.” If you know of abuse that has been committed against the government or one of its agencies, you are encouraged to report it and to contact a whistleblower law firm. The settlement was the result of the coordinated efforts of several state and federal agencies who have been participating in the government’s involvement in whistleblower Medicare cases.
Three Medicare Companies Agree to Pay the Government $19.5 Million to Resolve False Claims Act Allegations
The government’s crackdown on Medicare fraud continues to net companies that allegedly choose profit over patient wellbeing. This was evidently the case when earlier this month, the Justice Department announced that Foundations Health Solutions Inc. (FHS), Olympia Therapy, Inc. (Olympia), and Tridia Hospice Care Inc. (Tridia) and two of their executives have agreed to pay approximately $19.5 million to resolve allegations that they submitted false claims for medically unnecessary rehab therapy and hospice services. “Clinical decisions should be based on patient needs rather than corporate profits,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This settlement reflects the Department’s continuing commitment to safeguarding patients and the Medicare system.” All three companies are based in Ohio.
FHS provides management services to skilled nursing facilities (SNFs), Olympia provided rehab therapy services to patients at SNFs and Tridia provides hospice care services. Brian Colleran and Daniel Parker – two executives who have agreed to pay a portion of the settlement – controlled or owned Provider Services Inc. (PSI), BCFL Holdings Inc. (BCFL), FHS, Olympia, and Tridia between 2008 and 2013. The settlement resolves allegations that from January 2008 through December 2012, Olympia and PSI/BCFL submitted false claims for unnecessary rehab services at 18 SNFs. The government further alleges that the claims caused therapy services to be provided at excessive levels in order to increase Medicare reimbursement.
Further, the government contends that from April 2011 through December 2013 Tridia submitted false claims to Medicare for hospice services that were provided to patients who had not received proper medical examinations or certifications. Finally, the settlement resolves allegations that from January 2008 through December 2012, Colleran and Parker solicited and received kickbacks from SNFs managed by PSI or BCFL to Amber Home Care LLC. “Medicare providers have a legal and moral obligation to provide only those services that are medically necessary and to ensure that claims seeking payment accurately reflect the services that are actually provided,” said Special Agent in Charge Lamont Pugh III of the U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG). “The misrepresentation or falsification of those claims not only violates provisions of the False Claims Act but the public’s trust. The OIG will continue to aggressively investigate allegations of potential violations of this nature.”
As part of the settlement agreement reached earlier this month, FHS and Colleran have entered into a five-year Corporate Integrity Agreement (CIA), with the HHS Office of the Inspector General (HHS-OIG). The CIA is designed to compel FHS and Colleran to take steps to avoid future fraud and abuse. The settlement resolves allegations that came about as a result of two lawsuits that were filed by Vladimir Trakhter, a former Olympia employee, and Paula Bourne and La’ Tasha Goodwin, former Tridia employees. The lawsuits were filed in Ohio federal court under the qui tam or whistleblower provisions of the False Claims Act. These provisions allow private citizens to sue on behalf of the federal government and to share in any recovery. Mr. Trakhter will receive approximately $2.9 million and Ms. Bourne and Ms. Goodwin collectively will receive $740,000.
Several Cardiac Monitoring Companies Have Agreed to Pay $13.45 Million to Resolve False Claims Act Allegations
The Department of Justice announced last month that AMI Monitoring Inc., its owner Joseph Bogdan, Medi-Lynx Cardiac Monitoring LLC., and Medicalgorithmics SA, have all agreed to resolve allegations that they violated the False Claims Act. AMI Monitoring Inc., also known as Spectocor, and Bogdan have agreed to pay $10.56 million, and Medi-Lynx and Medicalgorithmics have agreed to pay $2.89 million. “Independent diagnostic testing facilities that improperly steer physicians to order higher levels of service will be held accountable,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will vigilantly ensure the appropriate use of our country’s limited Medicare funds.”
The government says that the companies intentionally guided patients towards more expensive levels of cardiac monitoring services than were medically necessary. Specifically, from 2011 to 2016 Spectocor, marketed a pocket ECG machine capable of several kinds of cardiac monitoring – holter, event, and telemetry. However, during the enrollment process for the cardiographic services, physicians were only able to choose the service that allowed for the highest rate of reimbursement from Medicare. Medicalgorithmics SA acquired a controlling interest in Medi-Lynx in September 2016.
“Sophisticated medical technology can be used to help doctors dramatically improve the lives of their patients, but it can also be misused to fraudulently increase medical bills,” said Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey. “Today’s settlement demonstrates that the federal government is committed to preserving the integrity of the Medicare system and ensuring that Medicare funds are spent only for patient care.” Eben Steele, a former sales manager at Spectocor, filed the original lawsuit in a federal court in Newark, New Jersey that resulted in last month’s multi-million dollar settlement. Mr. Steele was able to file his suit under the qui tam or whistleblower provisions of the False Claims Act. This Act allows private citizens to sue on behalf of the federal government in cases involving false claims and to share in any subsequent recovery. Mr. Steele’s share of the settlements amounts to $2.4 million.
The government’s intervention in this matter is a part of its ongoing efforts to investigate healthcare fraud. This initiative began during the previous administration. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
Los Angeles Hospital Agrees to Pay $42 Million to Settle Alleged False Claims Act Violations
Healthcare providers entering into improper relationships with physicians is a common theme in the government’s ongoing crackdown on Medicare and Medicaid fraud and abuse. This was demonstrated again last week when the Justice Department announced that two healthcare providers – PAMC Ltd., and Pacific Alliance Medical Center, Inc. – had agreed to pay $42 million in order to settle allegations that they violated the False Claims Act by engaging in improper financial relationships with referring physicians. The two entities own and operate Pacific Alliance Medical Center. Of the agreed upon settlement amount, $31.9 million will be paid to the government while the remaining $10 million will be paid to the State of California.
The settlement resolves allegations that were brought forward by a whistleblower who alleged that the defendants had submitted false claims to Medicare and MediCal Programs for services rendered to patients with whom they had improper relationships. Specifically, the whistleblower lawsuits alleged that the defendants paid above-market rates to rent office space within the physicians’ practices. Moreover, the lawsuit alleged that these marketing arrangements unduly benefited the physicians and their practices. These actions are alleged to have violated not only the False Claims Act but the Anti-Kickback Statute (42 U.S.C. § 1320a-7b.) and the Stark Law (42 U.S. Code § 1395nn). Both laws restrict the knowing and willful payment of “remunerations” to induce or reward patient referrals.
“Federal law prohibits improper financial relationships between hospitals that receive federal health care funds and medical professionals – this is to protect the doctor-patient relationship and to ensure the quality of care provided,” said Acting U.S. Attorney Sandra R. Brown for the Central District of California. “Patients deserve to know their doctors are making health care decisions based solely on medical need and not for any potential financial benefit.”
“This settlement is a warning to health care companies that think they can boost their profits by entering into improper financial arrangements with referring physicians,” said Special Agent in Charge Christian J. Schrank of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, we will continue to crack down on such deals, which work to undermine impartial medical judgement, drive up health care costs, and corrode the public’s trust in the health care system.” The whistleblower in this case was Paul Chan who worked for one of the defendants as a manager. Mr. Chan filed his case under the qui tam provisions of the False Claims Act. Under these provisions, individuals are able to sue on behalf of the United States and share in any subsequent recovery. Mr. Chan is expected to receive approximately $9.2 million.
Genesis Healthcare Inc. Agrees to Pay $53.6 Million Settlement to Resolve False Claims Act Violations
The government seems even more determined than ever to crack down on illegal billing and to make those who have done so pay for their alleged misdeeds. Proof of this came last week when the Department of Justice announced that Genesis Healthcare Inc. has agreed to pay more than $53 million – including interest – to settle lawsuits alleging that it and several other companies violated the False Claims Act. The government alleges that Genesis violated the False Claims Act by submitting false claims for medically unnecessary therapy and hospice services and by providing grossly substandard nursing care. Genesis – which is located in Kennett Square, Pennsylvania – owns and operates skilled nursing facilities, assisted/senior living facilities and a rehabilitation therapy business. “We will continue to hold health care providers accountable if they bill for unnecessary or substandard services or treatment,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Today’s settlement demonstrates our unwavering commitment to protect federal health care programs against unscrupulous providers.”
The settlement resolves four sets of allegations in all.
- In the first allegation, the government maintains that from April 2010 through March 2013, Skilled Health Group Inc. (SKG), Skilled Healthcare LLC (Skilled LLC), and Creekside Hospice II LLC, knowingly submitted false claims to Medicare for services they provided at Creekside Hospice. Specifically, the facilities are alleged to have billed hospice services for patients who were not terminally ill and that they billed inappropriately for physician evaluation services.
- Secondly, the settlement resolves allegations that from January 1, 2005 through December 31, 2013, SKG, Skilled LLC and Hallmark Rehab GP LLC submitted false claims to Medicare, TRICARE and Medicaid for medically unnecessary services that they billed for more therapy minutes than their patients received. The facilities are also alleged to have fraudulently assigned patients a higher Resource Utilization Group (RUG) level than necessary. RUGs are mutually exclusive categories that reflect levels of resource need in long-term care settings. Medicare reimburses SNF’s based on these metrics.
- In the third allegation, the government maintains that from January 1, 2008 to September 27, 2013, Sun Healthcare Group, Inc., SunDance Rehabilitation Agency and SunDance Rehabilitation submitted false claims to Medicare Part B by billing for medically unnecessary services and for services that were carried out by unskilled persons.
- In the final allegation, the Justice Department maintains that between September 1, 2003 and January 3, 2010 Skilled LLC submitted false claims to Medicare and Medi-Cal at its nursing homes for services that were substandard. Specifically, the settlement resolves allegations that these facilities failed to provide sufficient nurse staffing to meet the needs of residents. This in turn violates the government’s standard requirements for these nursing homes, SNF, etc.
“Safeguarding federal health care programs and patients is a priority,” said Acting U.S. Attorney Steven W. Myhre for the District of Nevada. “Today’s settlement is an example of the U.S. Attorney’s Office’s commitment to holding medical providers accountable for fraudulent billing of medically unnecessary treatments and services. We are committed to protecting federal health care programs, including Medicare, TRICARE, and Medicaid, which are funded by taxpayer dollars.” The settlement resolves allegations that were brought about by lawsuits filed under the qui tam, or whistleblower, provisions the False Claims Act by several former employees of companies acquired by Genesis. The qui tam provisions of the False Claims Act permit individuals to sue on behalf of the federal government in cases alleging false claims and to recover a portion of any subsequent settlement. The whistleblowers in this case are scheduled to receive a combined $9.67 million.
Defense Contractor Pays $95 Million to Resolve Allegations of Criminal, Civil Activities Related to Food Service Contracts
Foreign companies that do business with the United Sates are not beyond the reach of its laws when it comes to waste and fraud. The Department of Justice proved this to be the case when last month they announced that Agility Public Warehousing Co. KSC (Agility) – a Kuwaiti company – had agreed to resolve criminal, civil and administrative cases against it regarding their food contracts with the Department of Defense. The company’s contract covered food service for U.S. Troops from 2003 through 2010. As a part of a global resolution, Agility has agreed to pay $95 million to resolve civil fraud claims, to forgo $249 million in claims to DOD and to plead guilty to theft of government funds. For its part, the DOD’s Defense Logistics Agency (DLA) will release a claim of $27.9 million against Agility and lift its suspension of the company. (Agility had been suspended from entering into federal contracts for a period of seven years.)
“This settlement marks the conclusion of a lengthy investigation that demonstrates the Defense Criminal Investigative Service’s (DCIS) commitment to ensuring that tax dollars spent to support Department of Defense programs and missions are protected from fraud and abuse throughout the procurement process, but especially during overseas combat operations which are the most vulnerable,” said Special Agent in Charge John F. Khin of, DCIS-Southeast Field Office. “This extremely complex investigation required DCIS agents and our partners to tenaciously sort through and piece together an unprecedented volume of information and documents, and persevere through many years of exhaustive work, to bring this case to a resolution.”
The civil complaint alleges that Agility and TSC knowingly overcharged the DOD for locally available fruits and vegetables despite agreeing that they would pay 10 percent less than the amount billed. The United States also alleged that Agility failed to disclose rebate and discounts it obtained from US suppliers as it was contractually obligated to do so. The criminal charges against Agility alleged that it concealed consolidation fees that it should have paid and that this caused an inflated price to be paid by the United States. Starting in 2006, Agility filed a number of claims seeking additional payments in the amount of $249 million alleging that DLA owed this money for its performance under a series of military contracts. The agreement reached last month requires Agility to release all claims to this $249 million.
another Kuwaiti The allegations that are the basis of this agreement arose from a civil lawsuit that was filed against Agility and company – The Sultan Center Food Products Company, K.S.C. (TS) – by Kamal Mustafa Al-Sultan, a former vendor of Agility. Al-Sultan filed his suit under the whistleblower provisions of the False Claims Act. These provisions permit individuals to sue on behalf of the government and to share in any recovery. Mr. Al-Sultan is scheduled to receive $38.85 million as a result of the civil action he filed. If you have chosen to report a False Claims Act violation we advise you to contact a qui tam law firm. Qui tam law firms will be able to put you into contact with an attorney who will be able to advise you on such matters. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
