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False Claims Act Archives

Billions recovered by government under the False Claims Act

In the 2018 fiscal year, the U.S. Department of Justice recovered billions of dollars on behalf of the federal government from cases involving the False Claims Act. This law holds both individuals and companies responsible for defrauding and taking money from the federal government. In addition to the government seeking to cover its losses from various types of fraudulent actions, a claimant filing under the False Claims Act, whether from New York or another state, may be able to seek a portion of what is recovered. 

Drug maker settles illegal charity copay claims for $360 million

As drug prices rise in the U.S., some have expressed concerns that charitable payment of drug copays could be contributing to price inflation. This is because, although most patient assistance groups of this type are charities, pharmaceutical companies routinely donate to the groups.

Northrop Grumman settles False Claims Act case for $27.45 million

The Justice Department has accused defense contracting giant Northrop Grumman Systems Corporation (NGSC) of overbilling for employee hours on two Air Force battlefield communications contracts. It has now agreed to pay $25.8 million to settle those claims without admitting responsibility. When added to previous repayments, the company will have paid $27.45 million to reimburse the government. In addition, it has agreed to forfeit $4.2 million to resolve criminal allegations brought by the U.S. Attorney's Office for the Southern District of California.

Mortgage lender to pay $13.2M for violating FHA lending standards

Between Jan. 1, 2006 and Dec. 31, 2011, the Justice Department says, a Miami-based mortgage originator called the Universal American Mortgage Company LLC (UAMC) knowingly originated mortgages under the Federal Housing Administration mortgage insurance program that did not qualify with that program's lending requirements. These defective loans violated the False Claims Act because the FHA mortgage insurance program is left on the hook when its insured mortgages go into foreclosure.

Military contractor settles claim it knowingly used cheap steel

A military contractor that manufactures helicopter landing systems for U.S. Navy destroyers has recently settled a claim that it knowingly substituted cheaper steel than the Navy contract specified but still billed for the contract amount. This violated the federal False Claims Act, according to the Justice Department. Indal Technologies, Inc., a division of the Curtiss-Wright Corporation, has agreed to pay $3.5 million to resolve the allegations.

Whistleblower to receive over $5 million in False Claims Act case

When someone blows the whistle on fraud, waste or abuse in federal programs, they can often receive as a reward a substantial portion of any money recovered on behalf of the government. This is called the qui tam provision of the federal False Claims Act. In a recent pair of consolidated False Claims Act cases, the whistleblower will receive a reward of $5,411,521.

DaVita Medical to pay $270 million in False Claims Act case

Medicare Advantage plans are owned and operated by private organizations called Medicare Advantage Organizations (MAOs). Medicare beneficiaries can enroll in and obtain healthcare through these plans. Unlike in traditional Medicare, MAOs are not paid based on services rendered but instead receive a fixed monthly amount for each beneficiary's care. Since some patients require more care than average, payments from Medicare to MAOs are "risk adjusted" to reflect the beneficiary's health status. In other words, MAOs receive higher payments for patients whose conditions require more care.

Whistleblowers get at least $27.4 mln in False Claims Act cases

The federal government intervened in eight False Claims Act lawsuits and brought criminal charges against Health Management Associates, LLC (HMA), a hospital chain that has since been sold. According to the Justice Department, HMA engaged in a scheme to defraud the U.S. The allegations include:

Lockheed Martin employee reaches False Claims Act settlement

Richard O. was an employee of Lockheed Martin Corporation working for Mission Support Alliance (MSA) in August 2009. Lockheed Martin Services, Inc. (LMSI), a Lockheed Martin subsidiary, and MSA were hired by the Department of Energy to perform environmental cleanup of the Hanford Nuclear Reservation in Washington. Through a subsidiary, Lockheed Martin was one of the owners of MSA, as well.

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