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Press Release

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

For Immediate Release
Office of Public Affairs

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

Mansfield, Texas-based Integrated Medical Solutions Inc. (IMS), along with the company’s former President Jerry Heftler, have agreed to pay the United States $2.475 million to settle allegations that they violated the False Claims Act and Anti-Kickback Act in connection with federal contracts IMS obtained from the U.S. Bureau of Prisons (BOP), the Justice Department announced today.    

“This settlement demonstrates that the Department of Justice is committed to protecting the integrity of the federal contracting process from unscrupulous contractors,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “When government contractors maintain improper financial arrangements with government officials, it has a corrupting influence on contracts funded by taxpayer dollars.” 

“Our office will continue to aggressively investigate federal contracting abuse and will use all available tools to hold accountable those who try to gain an advantage in contracting through improper means,” said U.S. Attorney John R. Parker for the Northern District of Texas.

“Our office is committed to uncovering corruption in the contracting process, particularly when it involves an abuse of trust by the Department of Justice’s own employees,” said Special Agent in Charge Monte A. Cason of the Department of Justice Office of the Inspector General.  “It is imperative that we protect taxpayer funds by ferreting out such abuse.”
The settlement announced today resolves allegations that IMS engaged Cary Hudson, who was then employed by BOP as a business administrator, to serve as a paid consultant to assist IMS in obtaining contracts with BOP to serve as a third-party administrator responsible for developing managed healthcare networks that provide medical care to federal inmates. Specifically, the Government alleged that IMS paid Hudson in order to obtain favorable treatment during the contracting process, which included Hudson’s provision of certain confidential, non-public information that gave IMS an unfair competitive advantage in the bidding process.  After IMS obtained the contracts with BOP, the Government alleged that Hudson thereafter improperly assisted IMS in its performance of the contracts while simultaneously serving as a BOP financial administrator.

In October 2014, Hudson pleaded guilty to a felony violation of submitting a false document to an agency of the United States in which he failed to disclose payments he received from IMS as part of his annual obligation as a federal government employee to report any potential conflicts of interests.

This matter was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Texas, with assistance from the Department of Justice Office of the Inspector General.    

Except to the extent of the admissions in Hudson’s guilty plea, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability.

Updated June 6, 2017

False Claims Act
Press Release Number: 17-605