U.S. Attorney’s Office Collects More Than $136 Million For U.S. Taxpayers In Fiscal Year 2015

Tampa, FL - U.S. Attorney A. Lee Bentley, III announced today that the Middle District of Florida collected more than $136 million for taxpayers this fiscal year (FY). In FY 2015, which ended on September 30, the Office’s Civil, Criminal, and Asset Forfeiture Divisions collected these monies through civil and criminal actions.

The Office’s Civil Division, led by Randy Harwell, recovered $101,247,920 from affirmative civil enforcement cases, most alleging health care fraud. Our civil Assistant United States Attorneys recovered $47,593,934 as a result of investigations conducted in this district. An additional $53,653,986 was recovered as a result of joint investigations with the Department of Justice’s Civil Division and other United States Attorneys’ offices. This latter figure includes an installment payment of $21,651,246 from an earlier settlement of a large health care fraud case, United States ex rel. Hellein v. Wellcare Health Plans, Inc.  

The Office’s Asset Recovery and Victims’ Rights Division, led by Anita M. Cream, recovered more than $34.9 million. Of this amount, the Division’s Financial Litigation Unit recovered $11,498,617 in criminal cases, most of which was in the form of criminal fines, special assessments, and restitution. Providing restitution for the victims of crime is a top priority of our office. Working with partner agencies, the Division’s Asset Forfeiture Section recovered more than $23.4 million in criminal and civil forfeitures. Depending on the type of case, forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund or the Department of Treasury’s Assets Forfeiture Fund. Consistent with Departmental policy, in cases where a defendant lacks the means to pay restitution, assets can be forfeited from that defendant and restored to crime victims. In addition, approximately $5.6 million in forfeited funds was shared with state and local law enforcement agencies.

Attorney General Loretta E. Lynch announced on December 3, 2015, that the Justice Department collected $23.1 billion in civil and criminal actions this fiscal year. This total represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.  

"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch.  “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver.  I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”

The U.S. Attorneys’ offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct, or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, the Department of Health and Human Services, the Internal Revenue Service, the Small Business Administration, and the Department of Education.

Middle District of Florida Affirmative Case Highlights

The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government contracts, including national security and defense contracts, as well as under government programs as varied as Medicare, veterans’ benefits, federally insured loans and mortgages, highway funds, research grants, agricultural supports, school lunches, and disaster assistance.  In 1986, Congress strengthened the Act by amending it to increase incentives for whistleblowers to file lawsuits on behalf of the government. Most false claims actions are filed under the Act’s whistleblower, or qui tam, provisions that allow individuals to file lawsuits alleging false claims on behalf of the government.  If the government prevails in the action, the whistleblower, also known as the relator, receives up to 30 percent of the recovery. 

Compounding Pharmacy Fraud Initiative

Our district has taken the lead in a nationwide effort to pursue recovery, under the False Claims Act, against compounding pharmacies that have engaged in a systemic fraud against TRICARE, the military’s healthcare program. The most persistent fraud scheme identified involves improper relationships between marketing firms, physicians, and compounding pharmacies to induce the referral of prescriptions for medically unnecessary compounded pain and scar creams to the pharmacies. 

In July 2015, the U.S. Attorney’s Office settled claims against Blanding Health Mart Pharmacy. Between February and April, Blanding sought reimbursement for compounding pharmaceutical prescriptions that were not medically necessary and had been written by physicians that had never actually seen the patients. These claims were resolved for $8,441,107.

Kevin Powers, former Chief Executive Officer of QMedRX, a compounding pharmacy in Maitland, paid $6,529,077 to satisfy his responsibility arising from bills submitted to federal healthcare programs for services that were not reimbursable. Between January 1, 2013, and January 22, 2014, QMedRX submitted claims for compounded prescriptions that violated the Anti‐Kickback Statute because the marketers who obtained the prescriptions from physicians were paid through improper and illegal incentive compensation arrangements.

Another compounding pharmacy, Med Match Pharmacy, LLC, paid $4,736,133.63 to resolve concerns that it had paid kickbacks to marketers, that it had filled prescriptions it knew or should have known were not legitimate, and that it had sent prescriptions to states in which it did not have a valid license.

MediMix, a Jacksonville-based compounding pharmacy, resolved claims that it had an improper referral relationship with its top-referring physician – Dr. Ankit Desai. TRICARE alleged that between January 2009 and December 2014, Dr. Desai sent hundreds of prescriptions to MediMix that were not reimbursable because he was married to a Senior Vice President at MediMix. Healthcare providers are generally prohibited from referring business to entities where they have a financial interest. The government agreed to accept $3,775,458 to resolve these allegations.

Shortly after the close of FY15, the MDFL reached settlements with a host of other compounding pharmacies, bringing the total recovery on behalf of the TRICARE program to more than $35 million.

United States ex rel. Yandell v. Advanced Homecare, Inc.

A former employee of a Jacksonville home health company filed a qui tam case against her employer, Advanced Homecare, contending that, from April 2009 until April 2012, the company had created a set of “neurocare protocols” wherein the company accepted home health referrals from two neurologists. The government alleged that through these protocols, Advanced Homecare had accepted and treated patients who were not actually homebound and did not have a valid physician certification of home health need, as required by Medicare. Further, the government alleged that Advanced Homecare recklessly had allowed its employees to aggressively market its home health services to this neurology practice, and that those marketing employees had gained direct access to the practice’s patient files, completed referral forms, and used the doctors’ signature stamps to sign orders, in order to circumvent the physician certification requirement. The government resolved these allegations for $1,293,169.

United States ex rel. Doe v. Recovery Home Care

The relator in this case is a former sales representative for a home health care provider who alleges that the defendant entered into consulting agreements with physicians. These physicians agreed to refer at least 10 patients a month to the defendant in exchange for compensation ranging from $2,000 to $2,500 per month. The consulting agreements referred to the physicians as either “medical directors” or “medical consultants.” Prior to October 2009, Recovery Home Care employed two medical directors. By January 2012, the defendant had contracts with 18 medical directors, and had “consulting agreements” with 32 physicians during the course of the scheme. The relator alleged that these agreements violated the federal Anti-Kickback Statutes and Stark Statute. Following a lengthy investigation, the United States intervened in the case. Claims against Recovery Home Care have been resolved for $1 million. A settlement of the claims against the individual defendant is still being finalized.

United States ex rel. Wells v. Baptist Health System, et al.

This qui tam case was filed by a former administrator of the Baptist Health hospital chain who alleged that a neurologist employed by the hospital intentionally had misdiagnosed his patients with various neurological disorders and then had billed government healthcare programs for medically unnecessary services, tests, and treatments. In addition, she alleged that the defendant hospital chain did not return overpayments it had received as a result of the misdiagnoses, after discovering the neurologist’s scheme. In FY2014, we settled our claims against the hospital for $2.5 million. This fiscal year, we reached an ability to pay settlement for $150,000 with the physician defendant. 

United States ex rel. Yerger et al. v. IND-MAR Services, Inc., et al.

The relator filed this case in May 2011, alleging that North Florida Shipyards created a sham corporation, IND-MAR Services, Inc., falsely claiming that IND-MAR was a Service Disabled Veteran Owned Business (SDVOB). North Florida Shipyards did so in order to appear qualified to bid on certain solicitations issued by the Coast Guard, which were set aside contracts for SDVOBs. After a lengthy investigation, we opened settlement discussions that led the defendant to invoke its ability to pay. In FY2015, the Department of Justice approved the defendant’s offer to pay $1,000,000 to settle these claims. 

United States ex rel. Macdonald v. Walter Investment Mgmt. Corp., et al.   

The former Chief Financial Officer of a loan servicing company, RMS, filed a qui tam complaint against his former employer and its parent, Walter Investments. The complaint alleged that the defendants had defrauded the Department of Housing and Urban Development’s (HUD) reverse mortgage insurance program by failing to take certain actions required by HUD regulations, after HUD insured loans became due and payable. Specifically, the relator alleged that RMS had failed to disclose to HUD on numerous occasions that it did not obtain an appraisal within the required 30 days after the loan became due, and that it did not take “first legal action” within six months of the due date. By not self-disclosing on the HUD insurance claim that these event-specific deadlines were missed, the relator alleged that RMS filed false claims with HUD that resulted in HUD paying additional interest on claims that it should not have paid. These claims were settled for $29.63 million.

CVS

This case was a civil penalty referral by the Drug Enforcement Administration arising from the conduct of two CVS pharmacies in Sanford, Florida. The two pharmacies were accused of distributing controlled substances based on prescriptions that had not been issued for legitimate medical purposes by a health care provider in the usual course of professional practice. When confronted with the investigative findings, CVS acknowledged that its retail pharmacies had dispensed certain controlled substances in a manner not fully consistent with their compliance obligations under the Controlled Substances Act and the related regulations. CVS ultimately agreed to pay a civil penalty of $22 million. At the time of settlement, this was the highest penalty of its kind ever paid by a nationwide pharmacy chain. 

United States ex rel. Valenti v. Tai Shan Golden Gain Aluminum Products, Inc.

This qui tam was filed by the CEO of an exporter that competes with the defendant in the aluminum extrusion industry. He alleged that the defendant had avoided paying anti-dumping and countervailing duties owed on aluminum extrusions by misrepresenting the country of origin for the products as Malaysia, rather than the Peoples Republic of China. The investigation confirmed these allegations, as well as other deceptive practices. In FY2014, a settlement was reached with the defendant, Basco, for $1.1 million. In FY2015, settlements were negotiated with defendants C.R. Laurence Co. Inc., Southeastern Aluminum Products Inc., and Waterfall Group LLC for $2.3 million, $650,000 and $100,000, respectively, as well as for $385,000 and $50,000, on an ability to pay basis with individual defendants Robert Wingfeld and William Ma. The aggregate settlement recovery for this case was $4.585 million.

United States ex rel. Pelletier v. Liberty Ambulance Service, Inc., et al. and United States ex rel. Pelletier v. Century Ambulance Service, Inc., et al.

A former employee of two Jacksonville area ambulance companies filed two qui tam lawsuits in federal court against his former employers, alleging that the companies had submitted false claims to Medicare and other federally subsidized health programs for services that were “upcoded” and/or were medically unnecessary. Specifically, the whistleblower alleged that the companies had sought reimbursement for transportation of patients who did not qualify for basic life support transportation. In addition, the whistleblower alleged that several Jacksonville area hospitals had furthered the scheme by providing false certificates of medical necessity to justify the services. These allegations were investigated over a three and a half year period, which corroborated the relator’s core allegations. Ultimately claims were settled against one ambulance company (Century Ambulance) for $1.25 million and against three Jacksonville area hospital chains (Baptist Hospital, HCA, and Shands Healthcare) for $2.88 million, $2.4 million, and $1 million, respectively, for a total recovery of $7.53 million. The U.S. Attorney’s Office has intervened in the qui tam case against Liberty Ambulance and is currently litigating the claims against that defendant.

United States ex rel. Milstein v. Family Dermatology, et al.

Family Dermatology P.C. owns and operates a dermatopathology laboratory in Georgia and a number of dermatology practices throughout the Eastern United States. The relator, a board certified dermatologist and an independent contractor for Family Dermatology, claimed that the defendants had defrauded the United States by knowingly billing Medicare for lab work that violated the Stark Statute. The Stark Statute restricts the financial relationships that health care providers may have with doctors who refer patients to them.  Family Dermatology employs a number of dermatologists as independent contractors and it routinely required them to use Family Dermatology’s in-house pathology lab, which operated under the name Nelson Dermatopathology, for their pathology services.  The relator alleged that Family Dermatology’s financial relationships with a number of these physicians did not comply with the requirements of the Stark Statute, and that company had improperly billed Medicare for dermatopathology analyses performed by Nelson Dermatopathology on specimens that had been sent to the laboratory by these employed physicians. This case overlapped with another previously filed case in the Northern District of Georgia and was subsequently transferred there. Our district continued to assist in the investigation that resulted in a settlement of all claims for $3,247,935. 

United States ex rel. Montejo v. Adventist Health System, et al.

A physician formerly employed by Florida Oncology Network alleged that his former employer, the exclusive provider of radiation oncology services for Adventist Health System’s Florida Hospital chain, had provided radiation therapy services to patients without the proper physician supervision required by Medicare reimbursement regulations. He further alleged that the defendants had submitted false claims for evaluation and management services that were required to be performed by radiation oncologists, but were instead performed by non-physician providers. After investigating these claims, the U.S. Attorney’s Office negotiated a settlement of the claims against the defendant hospital chain for $5.5 million.