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Fraud Section Practice Areas


Health Care Fraud

The Fraud Section investigates complex health care fraud allegations and files suit under the civil False Claims Act to recover money on behalf of defrauded federal health care programs including Medicare, Medicaid, TRICARE, the Department of Veterans Affairs (VA), and the Federal Employee Health Benefits Program (FEHBP).  The Fraud Section works closely with the United States Attorneys’ Offices and often teams with HHS-OIG, state Medicaid Fraud Control Units, and other law enforcement agencies to pursue allegations of health care fraud.

The Fraud Section routinely handles nationwide cases involving a wide array of health care providers and suppliers, including pharmaceutical manufacturers, medical device companies, hospital chains, pharmacies, and physician practices.  The matters pursued by the Fraud Section involve a broad range of fraudulent schemes that result in the submission of false claims to the federal health care programs, including paying kickbacks to induce referrals, billing for medically unnecessary or worthless services, promoting drugs and medical devices for non-covered uses, falsely inflating drug prices, and providing false information with respect to diagnoses and electronic health record capabilities.

To report health care fraud call 1-800-HHS-TIPS (1-800-447-8477) or submit a hotline complaint online.

To learn more about the work of the Fraud Section and see examples of specific cases, please click on the links below for more information:

Pharmaceuticals  

Drug Maker Teva Pharmaceuticals Agrees to Pay $450M in False Claims Act Settlement to Resolve Kickback Allegations Relating to Copayments and Price Fixing  

Rite Aid Corporation and Elixir Insurance Company Agree to Pay $101M to Resolve Allegations of Falsely Reporting Rebates

Walgreens Agrees to Pay $106.8M to Resolve Allegations It Billed the Government for Prescriptions Never Dispensed

False Claims Act Complaint Filed Against Regeneron Pharmaceuticals for Fraudulent Drug Pricing Reporting

Novartis Pays Over $642 Million to Settle Allegations of Improper Payments to Patients and Physicians

Opioids

Opioid Manufacturer Endo Health Solutions Inc. Agrees to Global Resolution of Criminal and Civil Investigations into Sales and Marketing of Branded Opioid Drug

Rite Aid Corporation and Affiliates Agree to Settle False Claims Act and Controlled Substance Act Allegations Related to Opioid Dispensing

Justice Department Announces Resolution of Criminal and Civil Investigations into McKinsey & Company’s Work with Purdue Pharma L.P.; Former McKinsey Senior Partner Charged with Obstruction of Justice

United States Files Complaint Alleging that Rite Aid Dispensed Controlled Substances in Violation of the False Claims Act and the Controlled Substances Act

Justice Department Announces Global Resolution of Criminal and Civil Investigations with Opioid Manufacturer Purdue Pharma and Civil Settlement with Members of the Sackler Family

Medical Devices

Medical Device Manufacturer Innovasis Inc. and Two Top Executives Agree to Pay $12M to Settle Allegations of Improper Payments to Physicians

DOJ Files Suit against Spine Device Manufacturer and Executives Alleging Kickbacks to Surgeons through Sham Consulting Payments

Medical Device Companies Alere Inc. and Alere San Diego Inc. Agree to Pay $38.75 Million to Settle False Claims Act Allegations

Alere to Pay U.S. $33.2 Million to Settle False Claims Act Allegations Relating to Unreliable Diagnostic Testing Devices

Pediatric Dental

Dental Management Company Benevis and Its Affiliated Kool Smiles Dental Clinics to Pay $23.9 Million to Settle False Claims Act Allegations Relating to Medically Unnecessary Pediatric Dental Services

Durable Medical Equipment

Philips Subsidiary to Pay Over $24 Million for Alleged False Claims Caused by Respironics for Respiratory-Related Medical Equipment

Hearing Aid Company Eargo Inc. Agrees to Pay $34.37 Million to Settle Common Law and False Claims Act Allegations for Unsupported Diagnosis Codes

Resmed Corp. to Pay the United States $37.5 Million for Allegedly Causing False Claims Related to the Sale of Equipment for Sleep Apnea and Other Sleep-Related Disorders

Electronic Health Records

Modernizing Medicine Agrees to Pay $45 Million to Resolve Allegations of Accepting and Paying Illegal Kickbacks and Causing False Claims

Electronic Health Records Vendor to Pay Largest Criminal Fine In Vermont History and a Total of $145 Million To Resolve Criminal and Civil Investigations

Managed Care

Medicare Advantage Provider Independent Health to Pay Up To $98M to Settle False Claims Act Suit

Oak Street Health Agrees to Pay $60M to Resolve Alleged False Claims Act Liability for Paying Kickbacks to Insurance Agents in Medicare Advantage Patient Recruitment Scheme

Community Health Network Agrees to Pay $345 Million to Settle Alleged False Claims Act Violations

Justice Department Sues Six Health Plans and Their Alliance for Concealing Overpayments for Military Managed Care Program

Cigna Group to Pay $172 Million to Resolve False Claims Act Allegations

Medicare Advantage Provider to Pay $270 Million to Settle False Claims Act Liabilities

Sutter Health and Affiliates to Pay $90 Million to Settle False Claims Act Allegations of Mischarging the Medicare Advantage Program

Hospice

Kindred and Related Entities Agree to Pay $19.428M to Settle Federal and State False Claims Act Lawsuits Alleging Ineligible Claims for Hospice Patients

Crossroads Hospice Agrees to Pay $5.5 Million to Settle False Claims Act Liability

Hospitals

New Jersey Hospital and Investors to Pay the United States $30.6 Million for Alleged False Claims Related to Excessive Cost Outlier Payments

United States Files False Claims Act Complaint Against Erlanger Health System

Cape Cod Hospital to Pay $24.3 Million to Resolve False Claims Act Allegations Concerning Its Failure to Comply with Medicare Rules for Cardiac Procedures

Medical Center pays over $21M to settle alleged false claims

Flower Mound Hospital to Pay $18.2 Million to Settle Federal and State False Claims Act Allegations Arising from Improper Inducements to Referring Physicians

Oklahoma City Hospital, Management Company, And Physician Group To Pay $72.3 Million To Settle Federal And State False Claims Act Allegations Arising From Improper Payments To Referring Physicians

Laboratories

Florida businessman Daniel Hurt to pay over $27 million for Medicare fraud in connection with cancer genomic tests

New Jersey Laboratory and Its Owner and CEO Agree to Pay Over $13 Million to Settle Allegations of Kickbacks and Unnecessary Testing

Georgia Laboratory Owner Pleads Guilty to Felony Charge and Pays $14.3 Million to Resolve Liability Relating to Kickbacks and Unnecessary Testing

Physician Partners of America to Pay $24.5 Million to Settle Allegations of Unnecessary Testing, Improper Remuneration to Physicians and a False Statement in Connection with COVID-19 Relief Funds

United States Obtains $140 Million in False Claims Act Judgments Against South Carolina Pain Management Clinics, Drug Testing Laboratories and a Substance Abuse Counseling Center​​​

Nursing Homes and Skilled Nursing Facilities

The Grand Health Care System and 12 Affiliated Skilled Nursing Facilities to Pay $21.3M for Allegedly Providing and Billing for Fraudulent Rehabilitation Therapy Services

California Skilled Nursing Facilities, Owner and Management Company Agree to $45.6 Million Consent Judgement to Settle Allegations of Kickbacks to Referring Physicians

Justice Department Sues American Health Foundation and Its Affiliates for Providing Grossly Substandard Nursing Home Services

Signature HealthCARE to Pay More Than $30 Million to Resolve False Claims Act Allegations Related to Rehabilitation Therapy

SavaSeniorCare LLC Agrees to Pay $11.2 Million to Resolve False Claims Act Allegations

Behavioral Health

Acadia Healthcare Company Inc. to Pay $19.85M to Settle Allegations Relating to Medically Unnecessary Inpatient Behavioral Health Services

Universal Health Services, Inc. to Pay $117 Million to Settle False Claims Act Allegations


Procurement Fraud

The United States government awards contracts to support every function it serves.  For example, agencies contract with private contractors for good and services, such as: weapons systems with state-of-the art technology; satellites and transportation into space; disaster relief; administrative services; international shipping; computers and information technology services; and everyday office supplies.  The Fraud Section handles a wide array of procurement fraud matters, which can involve conduct at any stage of the contracting process.  Cases have included violations of the Anti-Kickback Act, 41 U.S.C. §§ 8701-8707; violations of the Truth in Negotiations Act and other forms of defective pricing that inflate contract prices; as well as false representations to win contracts, such as falsely claiming eligibility for contracts set aside for small disadvantaged businesses or veterans.  The Fraud Section also uses the False Claims Act to protect government supply chains from defective or counterfeit parts that can pose a risk to public safety, as well as recover money paid for goods and services that were not provided as promised or for inflated or other unallowable costs passed on to the government.     

Example Cases

Gen Digital Pays $55.1M False Claims Act Judgment for Knowing Overcharges to General Services Administration After Government Prevails at Trial

Consolidated Nuclear Security Agrees to Pay $18.4 Million to Settle False Claims Act Allegations of Timecard Fraud

Booz Allen Agrees to Pay $377.45 Million to Settle False Claims Act Allegations

Bechtel & Aecom, U.S. Department of Energy (DOE) Contractors, Agree to Pay $57.75 Million to Resolve Claims of Time Charging Fraud at Doe’s Hanford Waste Treatment Plant

Aluminum Extrusion Manufacturer Agrees to Pay Over $46 Million for Defrauding Customers, Including the United States, in Connection with Test Result Falsification Scheme  


Defense Contracting Fraud

Cases involving defense contracting fraud often involve the same types of issues that arise in all procurement fraud matters; however, as the largest contracting agency with contracting needs worldwide, the Department of Defense faces unique challenges in protecting its procurement integrity.  The Fraud Section uses the False Claims Act as a tool to combat fraud affecting the many Department of Defense military branches which are responsible for procuring weapons systems with state-of-the art technology (such as jets, helicopters, tanks, ships, and submarines), as well as food, fuel, and other provisions for military personnel serving at home and abroad.  Since 2012, the Fraud Section has recovered close to $1 billion in matters involving defense contracting fraud.

Example Cases

Raytheon Company to Pay Over $950M in Connection with Defective Pricing, Foreign Bribery, and Export Control Schemes

Sikorsky Support Services Inc. and Derco Aerospace Inc. Agree to Pay $70M to Settle False Claims Act Allegations of Improper Markups on Spare Parts for Navy Trainer Aircraft

Justice Department Files False Claims Act Complaint Against Insect Shield LLC and Its Founder

L3 Technologies Settles False Claims Act Allegations Relating to Double-Charging for Certain Material Costs

The Boeing Company to Pay $8.1 Million to Resolve False Claims Act Allegations

Honeywell to Pay $3.35 Million for Alleged False Claims for Zylon Bullet Proof Vests

KBR Defendants Agree to Settle Kickback and False Claims Allegations

Boeing owned drone maker to pay $25 million to settle False Claims Act allegations it used recycled parts on military projects

South Korean Engineering Company Pleads Guilty to Defrauding U.S. Army, Agrees to Pay $68.4 Million​​​​​​


Grant Fraud

Each year, hundreds of billions of dollars are distributed, in the form of federal grants, to universities, local governments, organizations, and individuals.  The Fraud Section represents federal agencies that encounter fraud in the award and administration of those grants.  The federal grants at issue in Fraud Section cases may include, for example, scientific research grants from the National Institutes of Health, National Science Foundation, and the National Institute of Standards and Technology; Small Business Administration grants designed to provide financial assistance to small business concerns; Department of Education grants for education and teacher assistance; Department of Agriculture grants related to rural business development; and local/community development, crime prevention, or youth mentorship grants awarded by the Department of Justice’s Office of Justice Programs, among others.  In handling grant fraud matters, Fraud Section attorneys work closely with Inspector Generals’ Offices and counsel from the affected agencies.

Example Cases 

City of Los Angeles Agrees to Pay $38.2M to Resolve False Claims Act Suit for Alleged Misuse of Department of Housing and Urban Development Grant Funds

Duke University Agrees to Pay U.S. $112.5 Million to Settle False Claims Act Allegations Related to Scientific Research Misconduct

The Scripps Research Institute To Pay $10 Million To Settle False Claims Act Allegations Related To Mischarging NIH-Sponsored Research Grants


FIRREA/Financial Fraud

The Fraud Section has a robust financial fraud practice, under both the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) and the False Claims Act.

Enacted in 1989, as a result of the Savings and Loan Crisis, FIRREA authorizes the Department of Justice to recover civil money penalties for violations of certain predicate criminal statutes.  These predicate statutes proscribe a diverse array of criminal misconduct, ranging from mail and wire fraud to bank fraud, bribery, false statements, and false documents.  Under FIRREA, the Fraud Section has pursued some of the largest money penalty cases in Department history, including several matters related to the manufacture and sale of mortgage loans and residential mortgage-backed securities that contributed to the Financial Crisis.  As part of its FIRREA investigations, the Fraud Section may coordinate with criminal authorities; prudential bank regulators like the Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation; and consumer and market regulators like the Consumer Financial Protection Bureau and Securities and Exchange Commission.

Under the False Claims Act, the Fraud Section has also made significant recoveries in matters involving financial fraud.  Such False Claims Act matters may involve false or fraudulent claims to federal agencies to gain access to federally guaranteed loan programs, to the Federal Deposit Insurance Corporation as receiver for failed financial institutions, or to certain government sponsored entities or instrumentalities under federally funded initiatives or programs.

Example Cases 

UBS Agrees to Pay $1.435 Billion for Fraud in the Sale of Residential Mortgage-Backed Securities

Wells Fargo Agrees to Pay $3 Billion to Resolve Criminal and Civil Investigations into Sales Practices Involving the Opening of Millions of Accounts without Customer Authorization

General Electric Agrees to Pay $1.5 Billion Penalty for Alleged Misrepresentations Concerning Subprime Loans Included in Residential Mortgage-Backed Securities


Customs Fraud

The Fraud Section routinely investigates and litigates matters involving the alleged evasion of customs duties by importers and their agents, and, since 2012, the Fraud Section has recovered more than $115 million in unpaid customs duties under the False Claims Act.  These cases often involve the alleged evasion of antidumping duties and countervailing duties, which are designed to protect U.S. manufacturers from unfair competition abroad and prevent foreign companies from “dumping” products on U.S. markets at prices below cost.  The Fraud Section has worked on matters involving a wide variety of products, including graphite electrodes, ultrafine magnesium powder, aluminum extrusions, carbon steel pipe fittings, and wooden bedroom furniture. 

Example Cases

Multinational Industrial Engineering Company To Pay $22 Million To Settle False Claims Act Allegations Relating to Evaded Customs Duties​​​​​​​

Bassett Mirror Company Agrees to Pay $10.5 Million to Settle False Claims Act Allegations Relating to Evaded Customs Duties

Tennessee and New York-Based Defense Contractors Agree to Pay $8 Million to Settle False Claims Act Allegations Involving Defective Countermeasure Flares Sold to the U.S. Army

California-Based Z Gallerie LLC Agrees to Pay $15 Million to Settle False Claims Act Suit Alleging Evaded Customs Duties


Conflicts of Interest

The Fraud Section has responsibility for investigating and prosecuting civil claims arising from alleged violations of conflict of interest statutes and the Ethics in Government Act of 1978, which was passed in the wake of the Watergate scandal and requires certain financial disclosures by federal employees.  These matters often involve allegations of improper and undisclosed financial conflicts or allegations that employees have taken official action to benefit themselves, their family, or outside business interests.  When investigating alleged conflicts of interest, Fraud Section attorneys work closely with counsel for the affected agencies, Offices of Inspector General, and other law enforcement agencies.   

Example Cases

North Texas Contractor and Executive Agree to Pay United States $2.475 Million to Resolve False Claims Act and Anti-kickback Act Allegations

Former Bureau of Prisons Employee Agrees to Pay $50,000 to Resolve Anti-Kickback Act Allegations

Former USAID Senior Official to Pay Civil Penalty for Alleged Conflict of Interest Violation

The Gallup Organization Agrees to Pay $10.5 Million to Settle Allegations That It Improperly Inflated Contract Prices and Engaged in Prohibited Employment Negotiations with Fema Official


Disaster Relief Fraud 

The Fraud Section handles a variety of matters relating to alleged fraud in connection with federal disaster assistance provided by FEMA, many of which arise from whistleblower complaints filed pursuant to qui tam provision of the False Claims Act.  In other instances, the Fraud Section receives referrals form FEMA or the Department of Homeland Security Office of Inspector General.  Also, in September 2017, following Hurricanes Harvey, Maria, and Irma, the Deputy Attorney General announced a Department-wide response to combatting fraud in connection with federal disaster assistance funds.  As part of this effort, the Fraud Section coordinates with National Center for Disaster Fraud (NCDF), as well as U.S. Attorneys’ Offices and numerous investigative agencies regarding potential referrals. 

Example Cases

AECOM to Pay $11.8 Million to Resolve False Claims Act Allegations in Connection with Hurricane Disaster Relief

United States Joins Lawsuit against AECOM Alleging False Claims in Connection with Hurricane Disaster Relief

Hurricane Katrina Contractor Accepts $4 Million Judgment Under the False Claims Act


Cyber Fraud

With the growing threat of malicious cyber activity, federal agencies spend billions of dollars each year on contracts and grants involving cybersecurity protections to safeguard governmental information and networks.  They also spend billions of dollars each year on acquiring highly specialized, classified, or otherwise sensitive equipment and services.  The Fraud Section represents federal agencies that encounter fraud in the award and administration of those contracts and grants.  The Fraud Section handles a wide array of cybersecurity matters that involve the submission of false claims to the government, such as failing to comply with required cybersecurity standards, misrepresenting cybersecurity controls and practices, failing to monitor cybersecurity systems, and failing to timely report cyber incidents and breaches.  To investigate cyber fraud, the Fraud Section partners with United States Attorneys’ Offices and the Inspectors General for the relevant federal agencies.

The Fraud Section also uses the False Claims Act to enforce other federal requirements related to information technology and operational technology, including in the contexts of electronic health records and cloud computing, and involving overcharging or substandard products and services. 

To report cyber fraud, contact the Inspector General for the federal agency that has been defrauded.  The Council of the Inspectors General on Integrity and Efficiency has provided the reporting tool available here to help whistleblowers report fraud to the appropriate Inspector General.

Example Cases

Defense Contractor MORSECORP Inc. Agrees to Pay $4.6 Million to Settle Cybersecurity Fraud Allegations

Health Net Federal Services, LLC and Centene Corporation Agree to Pay Over $11 Million to Resolve False Claims Act Liability for Cybersecurity Violations

The Pennsylvania State University Agrees to Pay $1.25M to Resolve False Claims Act Allegations Relating to Non-Compliance with Contractual Cybersecurity Requirements

Virginia Contractor Settles False Claims Act Liability for Failing to Secure Medicare Beneficiary Data

United States Files Suit Against the Georgia Institute of Technology and Georgia Tech Research Corporation Alleging Cybersecurity Violations

Consulting Companies to Pay $11.3M for Failing to Comply with Cybersecurity Requirements in Federally Funded Contract

Staffing Company to Pay $2.7M for Alleged Failure to Provide Adequate Cybersecurity for COVID-19 Contact Tracing Data

Cooperating Federal Contractor Resolves Liability for Alleged False Claims Caused by Failure to Fully Implement Cybersecurity Controls

Jelly Bean Communications Design and its Manager Settle False Claims Act Liability for Cybersecurity Failures on Florida Medicaid Enrollment Website

Medical Services Contractor Pays $930,000 to Settle False Claims Act Allegations Relating to Medical Services Contracts at State Department and Air Force Facilities in Iraq and Afghanistan

Netcracker Technology Corp. and Computer Sciences Corp. Agree to Settle Civil False Claims Act Allegations

IBM Agrees to Pay $14.8 Million to Settle False Claims Act Allegations Related to Maryland Health Benefit Exchange

Electronic Health Records Vendor to Pay $57.25 Million to Settle False Claims Act Allegations

Kansas Hospital Agrees to Pay $250,000 To Settle False Claims Act Allegations

Oracle Agrees to Pay U.S. $199.5 Million to Resolve False Claims Act Lawsuit

VMWare and Carahsoft Agree to Pay $75.5 Million to Settle Claims that they Concealed Commercial Pricing and Overcharged the Government

Updated April 4, 2025