Affirmative Civil Enforcement (“ACE”) refers to filing civil lawsuits on behalf of the United States. The purpose of these civil actions is to recover government money lost to fraud or other misconduct or to impose penalties for violations of Federal health, safety, or environmental laws. The following are examples of prosecutions under the ACE program:
- contractors who provide defective goods or worthless services to Federal agencies or who charge the government for goods and services not delivered;
- health care providers who defraud Federal health programs like Medicare and Medicaid by overbilling for goods and services or billing for goods and services that were not rendered, not medically necessary, or substandard;
- individuals who defraud Federal agencies such as the Small Business Administration, the Department of Housing and Urban Development, the Department of Education and other Federal agencies by using misrepresentations to obtain grants, loans and other benefits to which they are not entitled;
- companies and individuals to recover the government’s costs to clean up polluted land and water.
Usually ACE cases are pursued under the Federal False Claims Act, which affords the United States with a cause of action for false or fraudulent claims made against the government, or for false statements made to the government. The False Claims Act provides for recovery of triple the amount of damages incurred by the United States, plus a penalty of $5,500 to $11,000 for each violation.
Many of these cases result from qui tam or whistleblower lawsuits under the False Claims Act. In qui tam actions, individuals or entities with inside information about fraudulent conduct file suit on behalf of the United States. The ACE program then undertakes an investigation of the allegations. Whistleblowers, called relators under the False Claims Act, can receive a percentage of the government’s recovery.
Our ACE program is supported by Assistant United States Attorneys, five of whom are devoted full time to ACE prosecutions, including an ACE Coordinator and a Health Care Fraud Coordinator; a certified public accountant/certified fraud examiner/auditor; an investigator; a paralegal specialist, and a legal assistant. Investigations are undertaken with agents from the Federal Bureau of Investigation, the Offices of the Inspector General for the U.S. Department of Health and Human Services and other federal agencies, the Department of Defense, and others.
ACE cases can present facts and issues that warrant criminal as well as civil prosecution. In those instances, two or more Assistant United States Attorneys coordinate the investigation with law enforcement agents, using Federal criminal and civil laws to obtain the most effective resolution consistent with the objectives of punishment, deterrence and full restitution.
Nationally, ACE programs have recovered billions of dollars for the United States. In the District of Maryland, the ACE program has recovered millions of dollars by resolving, for example, cases against:
- a pharmaceutical company for paying kickbacks and for off-label marketing (multi-district);
- a company for selling defective laboratory animals to the National Institutes of Health that were used in government-funded research;
- contractors for billing the government for labor and other costs that were not expended on government contracts;
- physicians and hospitals for upcoding and billing for medically unnecessary services;
- a major medical research institution for misusing federal grants;
- a major medical institution for violating the Controlled Substances Act, resulting in significant losses of controlled substances.
For examples of recent Affirmative Civil Enforcement (“ACE”) prosecutions in Maryland, click on these links:
2011
Greater Metropolitan Orthopaedics Institute Agrees to Pay $2.5 Million to Resolve False Claims Allegations
Serono to Pay $44.3 Million to Resolve False Claims Act Allegations in Connection with Promotion of Drug Rebif
Danish Pharmaceutical Novo Nordisk to Pay $25 Million to Resolve Allegations of Off-label Promotion of Novoseven
Gambrills Podiatrist Pleads Guilty to Fraudulently Billing Medicare over $1.1 Million
Peninsula Regional Medical Center Agrees to Pay $1.8 Million to Resolve Allegations That it Failed to Prevent Medically Unnecessary Cardiac Stent Procedures by Dr. John R. Mclean
Laurel Oncologist Pleads Guilty to Purchasing Misbranded Drugs
Mistral Security, Inc Agrees to Pay $458,000 to Resolve Allegations That it Overbilled the Government on Two Government-funded Grants to Provide Drug Detection Kits
Salisbury Cardiologist Sentenced to over 8 Years in Prison for Implanting Unnecessary Cardiac Stents
2010
Woodhaven Pharmacy Services, Inc D/b/a Remedi Seniorcare Settles Claims That it Failed to Credit Federal Programs and Medicaid for Returned and Re-dispensed Medications
St. Joseph Medical Center Agrees to Pay $22 Million to Resolve False Claims Act Allegations in Connection with Kickbacks Paid to Midatlantic Cardiovascular Associates
Scheme to Defraud Government on Reconstruction Contracts Leads to Criminal Charges and Civil Penalties for Louis Berger Group, Inc.
Sleep Solutions, Inc. Settles Claims of False Billings for In-home Sleep Studies
Physician Agrees to Settle False Claims to Medicare for Services to Nursing Home Residents
Advanced Bionutrition Corporation and David Kyle, its Former Chief Executive Officer, Agree to Settle Claims of Grant Fraud
2009
Diebold Subsidiary Agrees to Pay $850,000 to Settle Claims That it Used Unapproved Computer Techs at Social Security Administration
Johns Hopkins Bayview Medical Center Settles False Claims Act Case
2008
Chesapeake Youth Center, Inc. Agrees to Pay $259,120 to Settle Allegations That it Provided No Care or Worthless Care to Residents
McKesson Corporation Agrees to Pay over $13 Million to Settle Claims That it Failed to Report Suspicious Sales of Prescription Medications
2007
Omaha Property and Casualty Company and Eds Agree to Pay $2.48 Million to Settle National Flood Insurance Overpayment Claim
Catonsville Doctor Sentenced for Health Care Fraud and Fraudulently Obtaining Prescription Drugs
Towson Doctor Agrees to Pay $300,000 and Enter into an Integrity Agreement to Settle False Billing Claims Related to Cosmetic Laser Procedures
Cosmos Corporation Agrees to Pay $1.55 Million To Settle Claims Alleging Government Contract Fraud
Pharmacist Agrees to Pay $500,000 to Settle Oxycodone Based Violations of the Controlled Substances Act
2006
Podiatrist Agrees to Be Excluded from Participation in All Federal Health Insurance Programs for 10 Years and Pay $326,570 to Settle False Billings Claims
Oracle Agrees to Pay $98.5 Million for False Pricing Information Provided by PeopleSoft to Obtain Government Contract
2005
Serono Labs Pleads Guilty to the Illegal Marketing of Aids Drug, Reports U.S. Attorney
