Two Former Arriva Medical Executives Agree To Pay $1 Million To Settle Diabetic Testing Supply Fraud Allegations

NASHVILLE, Tenn. – April 24, 2019 – David Wallace of Boca Raton, Florida and Timothy Stocksdale, of Ft. Lauderdale, Florida, two former executives of Arriva Medical, LLC (Arriva), agreed to pay $500,000 each to settle the United States’ allegations that they had violated the False Claims Act, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. 

Arriva is a mail-order diabetic testing supply company based in Coral Springs, Florida, which, at one point, had operations including a customer call center in Antioch, Tennessee.  Wallace and Stocksdale co-founded Arriva and after its November 2011 sale to Alere, Inc. (Alere), they remained employed as Arriva executives.  Wallace served as Arriva’s president from November 23, 2011 through August 30, 2013, and Stocksdale served as Arriva’s vice president during the same period.

The settlement resolves the United States’ claims that Wallace and Stocksdale caused Arriva to submit false claims to Medicare that were tainted by kickbacks paid to beneficiaries in the form of free or no cost home blood glucose meters or waived or uncollected copayments during the period from November 23, 2011 through August 30, 2013.  The settlement also resolves the United States’ claims that Wallace and Stocksdale caused Arriva to bill Medicare for medically unnecessary home blood glucose meters during the same period.

On February 8, 2019, the United States separately intervened in a False Claims Act case alleging that Arriva and Alere submitted and/or caused to be submitted false claims to the Medicare program for medically unnecessary glucometers and diabetic testing supplies that were tainted by the payment of kickbacks in the form of free home blood glucose meters and routine copayment waivers.  Alere is a large medical device company based in Waltham, Massachusetts.  Both Arriva and Alere were acquired by Abbott Laboratories in September 2017. 

In October 2016, the Centers for Medicare & Medicaid Services (CMS) revoked Arriva’s billing number for billing Medicare for durable medical equipment that was shipped to a beneficiary more than 14 days after the beneficiary’s death.  Arriva subsequently stopped operating in late 2017.

The case was handled by the United States Attorney’s Office for the Middle District of Tennessee and investigated by the Tennessee Bureau of Investigation Medicaid Fraud Control Unit and the Department of Health and Human Services, Office of Inspector General.  Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States. 

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