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Thermacore, Inc. Settles False Claims Act Allegations for Nearly $1 Million

A thermal engineering firm has agreed to pay $965,000 to settle allegations of duplicative proposals to the Small Business Innovation Research Program.
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The commission of fraud with federal or state grant money is an emerging issue gathering increasing exposure. Federal grants, which are funded by taxpayer dollars, are awarded to certain individuals and corporations after a lengthy review process. This money is not considered a loan, and is generally not to be repaid assuming the terms and conditions of the grant are met. Any grant recipient engaging in fraud, misspending, or waste of grant money could face significant False Claims Act liability.

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Science Applications International Corporation Settles 10-year Old False Claims Act Allegations

The Nuclear Regulatory Commission recently settled with Virginia-based Science Applications International Corporation following allegations of conflicts of interest.
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Virginia-based Science Applications International Corporation (SAIC), which is now known as Leidos Holdings, Inc., has agreed to pay $1.5 million to finally settle False Claims Act allegations originally alleged nearly ten years ago. The case involves allegations of unlawful conflicts of interest with regard to a contract held between SAIC and the U.S. Nuclear Regulatory Commission from 1992 through 2000. This recent settlement comes on the heels of a settlement reached last year between the U.S. government and SAIC involving inflated prices and charges for training services provided to first responders to terrorism attacks.

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Extendicare Health Services Inc. to Pay $38 Million to Settle FCA Allegations Involving Substandard Care

ExtendedCare has agreed to settle alarming allegations of sub-standard long-term care at their facilities.
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One of the most alarming forms of healthcare fraud involves the provision of substandard care and the subsequent billing for that care to government programs like Medicare and Medicaid. Under applicable laws, a medical facility or skilled nursing entity can expose itself to False Claims Act liability for failing to meet minimum care standards – which are set forth by the Centers for Medicare and Medicaid Services (CMS) in its various policy manuals. Standards for resident care are also codified in 42 CFR § 483.10, which includes dozens of requirements imposed upon any long-term care facility treating Medicare and Medicaid enrollees. Failure to abide by these standards can not only expose the patient to injury or death, but will undoubtedly expose the facility to liability under the False Claims Act.

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Kentucky Cardiology Group Settles False Claims Act Allegations for $380,000

Kentucky cardiologists settle False Claims Act allegations

Two Kentucky cardiologists and a nearby hospital have agreed to settle allegations of kickbacks and unlawful referral arrangements.
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In a recent announcement by the Department of Justice, two London, Kentucky-based cardiologists have agreed to pay $380,000 to settle claims of improper financial relationships with nearby St. Joseph Hospital – including unlawful kickbacks and allegations of financial inducements for referrals. Under the False Claims Act and federal Stark Law, physicians and healthcare professionals are prohibited from engaging in certain lucrative arrangements under the assumption that an underlying financial incentive may taint doctor-patient advice and prevent patients from receiving a referral based solely on what is in their best interests. As we have discussed in previous posts, allegations of kickbacks can quickly expose a physician or hospital management group to liability under the False Claims Act, which allows for treble damages if warranted.

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UPDATE: Jury Returns $175 Million Verdict Against Trinity Industries

Trinity Industries guardrail False Claims Act allegations

The case against Trinity Industries has reached the end of the road, for now. A Texas jury returned a $175 million verdict against the guardrail manufacturer after finding it submitted false claims for reimbursement for the installation of an unapproved design.
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In an ongoing False Claims Act case against highway guardrail manufacturer Trinity Industries, a Texas jury has awarded $175 million in damages against the industrial corporation. The case was initiated by outspoken engineer Josh Harman, who has worked diligently in his whistleblower lawsuit since 2005 – despite “gamesmanship and inappropriate conduct” by the defendant. In fact, U.S. District Court Judge Rodney Gilstrap issued a mistrial in July, 2014, after evidence surfaced revealing that the defendant improperly attempted to influence and intimidate a witness scheduled to testify that Trinity’s ET-Plus models were “nearly three times more likely to be involved in a fatal crash” than previous, or alternative, guardrail models.

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DRS Technical Services Agrees to Settle False Claims Act Allegations for $13.7 Million

A Virginia-based military support contractor has agreed to settle False Claims Act allegations involving the use of unqualified workers.

Aside from healthcare fraud, intentional fraudulent misconduct pursuant to contracts for defense goods or services is one of the most common areas triggering liability under the federal False Claims Act. As you may recall, the False Claims Act got its start during the Civil War era as a way to eradicate costly, life-threatening scams perpetrated on soldiers and others members of the defense department. For instance, it was not uncommon for companies to contract with the government for the provision of uniforms or artillery, only to provide sub-standard, used, or unfit items – or even no items at all. As a result, the Lincoln administration made it a top priority to legislate and enact the original False Claims Act, thereby imposing possible civil liability upon any government contractor choosing to perpetuate fraud against the government.

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Examining the Distinction Between Conditions of Participation Versus Conditions of Payment

Federal courts are considering an emerging issue in distinguishing conditions of participation versus conditions of payment, the latter of which is actionable under the False Claims Act.
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The statutory requirements of the False Claims Act are highly-specific, requiring a precise intent to defraud the government out of taxpayer dollars. An emerging issue across several federal courts involves the pivotal distinction between conditions for participation in Medicare or Medicaid versus conditions for reimbursement for patients enrolled in these programs. Violations of the former, while probably actionable under alternative civil laws, do not give rise to False Claims Act liability. The latter, however, will trigger the False Claims Act provided the court finds that the defendant engaged in intentional, fraudulent conduct with regard to requests for reimbursement from government programs. Drawing a distinction between the two, however, has proven to be a source of contention within recent cases, which is discussed further below.

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Boeing Agrees to Pay $23 Million to Settle False Claims Act Allegations

Boeing

Worldwide leader in aircraft manufacturing Boeing recently settled False Claims Act allegations involving improper billing for wages and overtime.
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The Boeing Company, a preeminent aircraft manufacturer, has agreed to pay $23 million to the federal government amidst allegations of improper invoices for wages on behalf of workers employed at the San Antonio-based Aerospace Support Center. Despite Boeing’s assertions that the false claims were the result of accidental mischarges and not intentional conduct, the aircraft giant opted to settle the allegations set forth by the Department of Justice; however, it has not admitted to any liability in the matter.

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Understanding the Third Circuit’s Foglia Pleading Standard in False Claims Act Cases

The Third Circuit recently applied the Foglia pleading standard to False Claims Act cases.
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When it comes to False Claims Act litigation, one of the most hotly-contested issues surrounds the standards for pleading a claim with specificity. As we have reported in the past, the federal circuit courts are decidedly split on the issue, with several requiring an extremely intensive, fact-specific pleading standard alleging dates, times, dollar amounts, and details of every alleged act of fraud. Other circuit courts take a more relaxed approach to the pleading requirements, holding that a case can withstand a motion to dismiss as long as the relator has set forth enough information from which a reasonable person could draw an inference that fraud has occurred.

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New Jersey District Court Denies PharMerica’s Motion to Dismiss in Ongoing Omnicare Case

Omnicare case

District Court rules in favor of relator Marc Silver in his whistleblower case against Omnicare, Inc. et al. based on Third Circuit precedent.
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As you may recall, our law firm has maintained a steadfast involvement in the False Claims Act case against pharmacy services giants Omnicare, Inc. and Pharmerica, representing pharmacist relator Marc Silver in his quest to expose the defendant’s ongoing fraud committed against Medicare and Medicaid. In a recent order entered by District Judge Hillman, the defendant’s recent motion to dismiss was denied in part, granting the motion only as to the defendant’s statute of limitations claims for federal False Claims Act allegations occurring prior to March 4, 2005. In today’s post, we review the background details of the case, as well as discuss the court’s reasoning in denying the defendant’s bid to dismiss the case. In tomorrow’s post, we will look at the flourishing Foglia standard and how it has taken hold of the federal Third Circuit.

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