West Des Moines Man Pleads Guilty to Providing False Documents during Civil False Claims Act Investigation and Agrees to Pay Almost $900,000 to Resolve the Civil Investigation
A durable medical equipment store owner who provided false documents to the United States Attorney’s Office during a civil False Claims Act investigation pled guilty today in federal court in Cedar Rapids.
James O’Connor, 64, from West Des Moines, Iowa, was convicted of one count of Making and Using False Documents, in violation of 18 U.S.C. § 1001(a)(3).
In a plea agreement, O’Connor, who operated O’Connor Medical Supply, Inc., in Clive, agreed that he provided a false document to the United States Attorney’s Office in response to a Civil Investigative Demand the office issued in conjunction with a civil False Claims Act investigation. Specifically, O’Connor admitted to providing a false Letter of Medical Necessity intended to conceal the fact that he previously submitted a claim to Medicare for a more complex and more expensive orthotic device than what he actually provided to a Medicare beneficiary. O’Connor further admitted that, for purposes of sentencing, he caused nearly $350,000 in loss.
O’Connor also entered into a settlement agreement to resolve the United States’ civil False Claims Act investigation. As part of that investigation, the United States alleged that O’Connor submitted claims to Medicare and Medicaid for four more expensive models of durable medical equipment than what he actually provided to beneficiaries: ankle foot orthoses, walking boots, knee braces, and wrist finger orthoses. O’Connor agreed to pay $898,523.08 to resolve these allegations.
In addition, because a private citizen, known as a relator, filed a tam, or whistleblower, lawsuit raising the civil allegations, O’Connor agreed to pay the relator’s law firm an additional $51,476.92 in fees. The relator is also entitled to receive $224,630.77 (25%) of the nearly $900,000 recovery pursuant to the tam provisions of the False Claims Act. Those provisions permit private individuals with knowledge of wrongdoing to bring suit on behalf of the government for false claims and share in any recovery.
“This result shows that our office will use every available tool to ensure Medicare and Medicaid beneficiaries receive the care to which they are entitled and government funds are well spent,” said Acting United States Attorney Sean R. Berry. “Our office encourages citizens to report fraudulent conduct by health care providers to help us ensure fair and efficient health systems throughout the district. Targets of those investigations are on notice that we will not tolerate any dishonesty or fraudulent activity during the course of an investigation.”
Steve Hanson, Special Agent in Charge, United States Department of Health and Human Services, Office of Inspector General, Kansas City Region, stated, “In order to protect our Medicare and Medicaid programs from unscrupulous health care providers, our office will continue to work with our law enforcement partners to pursue those who overbill our programs for services they did not provide to our beneficiaries.”
This case is one of more than 20 monetary settlements reached with health care providers by the United States Attorney’s Office for the Northern District of Iowa since June 2013. It is also the second successful resolution of a qui tam lawsuit during this period. In both instances private parties shared in the government’s recovery.
For the criminal matter, sentencing before United States District Court Judge Linda R. Reade will be set after a presentence report is prepared. O’Connor remains free on bond previously set. O’Connor faces a possible maximum sentence of 5 years’ imprisonment; a fine equal to the greater of twice the gross gain to defendant resulting from the offense, twice the gross loss resulting from the offense, or $250,000; a $100 special assessment; and 3 years of supervised release following any imprisonment.
The criminal case is being prosecuted by Assistant United States Attorney Timothy Vavricek, and the civil matter was handled by Assistant United States Attorney Jacob Schunk. The case was investigated by the United States Department of Health and Human Services, the Federal Bureau of Investigation, and the State of Iowa’s Medicaid Fraud Control Unit.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-39.
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