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Justice News

Department of Justice
U.S. Attorney’s Office
District of Utah

FOR IMMEDIATE RELEASE
Tuesday, December 11, 2018

Durable Medical Equipment Provider Agrees To Pay $1.6 Million To Resolve False Claims Allegations

SALT LAKE CITY -- Benjamin D. George and Jody C. Rookstool, and their company, Western Medical Group, have agreed to pay $1,634,844 million to settle False Claims Act allegations, U.S. Attorney for Utah John W. Huber announced today. The settlement concerns conduct initiated by Western Medical and concludes two qui tam actions filed by whistleblowers in December 2013 and February 2014.

The settlement resolves allegations that the company caused the submission of false claims to Medicare. Complaints were based primarily on allegations surrounding Western Medical’s use of a telemarketing scheme to sell knee and back braces to Medicare beneficiaries.  The United States alleged that the company violated Medicare’s prohibition against telephone solicitation of covered products to beneficiaries.

“Misuse of taxpayer dollars is something we take very seriously.  We use the False Claims Act as a tool to protect the public and recover taxpayer dollars that were lost through fraud.  We vigorously pursue these cases on behalf of Utah taxpayers. The money recovered will be put back into federal health care programs where it can be used to provide medical services for the elderly and disable,” U.S. Attorney Huber said today.

“The FBI takes health care fraud seriously and we work closely with our federal partners to identify, investigate and prosecute the crime,” said Eric Barnhart, Special Agent in Charge of the FBI’s Salt Lake City Field Office.  “The public should beware of telemarketers who make direct telephone solicitations with no legitimate medical referral and attempt to induce them into purchasing medical products.  Promises to waive co-payments or efforts to bypass one's legitimate prescribing physician are signs of a fraudulent operation.  The FBI and its partners also applaud those who blow the whistle on fraud.  It’s an act of courage to come forward and share one's observations with law enforcement.”

Steve Hanson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Kansas City Region, stated, “Healthcare providers who improperly bill our programs at the expense of taxpayers will be pursued and held accountable for their actions.” 

The United States’ investigation began with two qui tam complaints filed by former Western Medical employees. The qui tam provisions of the False Claims Act allow for whistleblowers, or relators, to file suit for violations of the Act on behalf of the United States.

This matter was investigated by the U.S. Department of Justice, the Utah U.S. Attorney’s Office’s Affirmative Civil Enforcement Section, the U.S. Department of Health and Human Services Office of Inspector General, the FBI, and the Office of Personnel Management (OPM).

 The cases are docketed as United States ex rel. Craig Bearden v. Arizona Medical Supply, LLC, dba Western Medical and Senior First Medical; KMR Medical, LLC; KPM Capital, LLC; Privacy Maxx, LLC; and Jody Rookstool, No. 2:13-cv-01127 and United States, ex rel., Michelle Boucher, P.A., v. KPM Capital, LLC dba Western Medical Group; KMR Medical LLC; Jody Rookstool; Benjamin George; David Nolan; John Does #1-100, Ficticious Names, No. 2:14-cv-00092.

The claims settled by this agreement are allegations only, and there has been no determination of liability.

Topic(s): 
False Claims Act
Component(s): 
Updated December 12, 2018