US Attorney's Office Exceeds $70,000,000 in Recoveries from Affirmative Litigation

          BUFFALO – U.S. Attorney William J. Hochul, Jr. announced today that the U.S. Attorney's Office collected $71,086,677 in the past twelve months, with all such monies coming solely from affirmative civil litigation. This amount – one of the highest ever obtained by the Office – does not include financial recoveries obtained by the Office using criminal, forfeiture or other enforcement tools, such as the more than $11 million obtained this week from John Gizzi, a defendant convicted of criminal tax fraud.

“While the public well knows of the Office’s ability to prosecute those who hurt others, cases brought by this Office’s ACE Unit are other ways in which we ensure the American public is protected against fraud and abuse,” said U.S. Attorney Hochul.

            As part of its statutory responsibilities, the United States Attorney’s Office enforces federal criminal laws, including terrorism, environmental, narcotics, fraud, and more. In addition, the Office defends in court a wide number of federal agencies, such as the Veteran’s Administration and Post Office, when such agencies are sued by others. A sometimes lesser known power of the Office includes the ability to sue in court those who commit fraud against some of the U.S. Government’s programs, such as health care, procurement, and others.  This is known as Affirmative Civil Litigation, and is handled by the Office’s Affirmative Civil Enforcement Unit, or ACE Unit.    

As examples of cases which were successfully brought by the Office’s ACE Unit over the past twelve months, earlier this month, the Office announced a more than $34,000,000 settlement with 55 hospitals located throughout 21 states. These health care facilities submitted false claims to Medicare for a certain procedure known as kyphoplasty. Instead of billing the U.S. Government for what should have been the  minimally-invasive, out-patient Kyphoplasty procedure, the hospitals submitted to and collected from the Government payments from what appeared to be multi-day in-patient stays in the facilities.   

In March 2013, the U.S. Attorney's Office used its affirmative litigation power to obtain a settlement of $33,500,000 from ISTA Pharmaceuticals. This case involved ISTA misbranding the drug Xibrom so as to increase sales nationwide. 

            The ACE Unit’s accounting year ended July 31, which was the reason why the total figure of $71 million was released today. U.S. Attorney Hochul concluded by noting that while the $71 million recovery is itself significant, the Office also participated in a recent recovery of $335,000,000, which was part of the countrywide litigation conducted by the WDNY and other United States Attorney’s Offices.

            The ACE Unit, which is supervised by Assistant U.S. Attorney Mary Pat Fleming, includes Assistant U.S. Attorney Gretchen Wylegala, Investigator Margaret McFarland, Auditor Theresa Tetlow, and Paralegal Jessica Rogers.