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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 in
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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 Freed
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United States Joins in Second False Claims Act Lawsuit against United Health Group Inc

Often, alleged healthcare fraud involves the proliferation of false and inaccurate information about patient health records. These kinds of activities endanger patient health and illegally enrich health care providers who are involved in such fraud. This was what the Justice Department alleged when last week it announced that it had filed a complaint against UnitedHealth Group Inc. (UHG) for the second time in two weeks. The government is alleging that UHG knowingly obtained inflated risk adjustment payments based on untruthful information about the health status of beneficiaries enrolled in UHG’s Medicare Advantage Plans. In a related action involving false claims submitted to Medicare, the government filed a complaint earlier this month in United States ex rel. Swoben v. Secure Horizons.  “The Department of Justice’s pursuit of this matter illustrates its firm commitment to ensure the integrity of the Medicare Program, including those parts of the program that rely on the services
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The Government Intervenes in False Claims Act Lawsuit against the City of Los Angeles and CRA/LA

Whistleblowing often contributes to the process of uncovering waste, fraud, and abuse by aiding some of society’s most disadvantaged members. Proof of this was demonstrated last week when the Justice Department announced that it was intervening in a lawsuit against the City of Los Angeles and the CRA/LA (formerly the Community Redevelopment Agency of the City of Los Angeles). The suit alleges that CRA/La and the City of Los Angeles falsely certified that they were in compliance with HUD’s accessibility laws specifically Section 504 of the Rehabilitation Act. This act is meant to ensure that disabled individuals have equal access to public housing. According to the lawsuit CRA/LA and the City of Los Angeles applied for and received millions of dollars from HUD and that a portion of that money was meant to provide affordable housing for people with disabilities in compliance with HUD’s accessibility laws. The laws, in part, require that five percent of all units in federally-assist
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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 — includ
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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 Departme
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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
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