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The owner of a California home health agency has been ordered to pay nearly $15 million on account of the company’s violations of the False Claims Act and other healthcare laws. Hee Jung Mun, the former owner and operator of GreatCare Home Health Agency, pleaded guilty to healthcare fraud charges in January 2012 for her role in a scheme that paid kickbacks to physicians and marketers who referred patients to GreatCare. As part of the fraud scheme, Medicare beneficiaries were paid to sign up for GreatCare’s service, even though many of them were not eligible for home health services. GreatCare then billed Medicare for services that were not rendered, were unnecessary, and/or were performed by unlicensed personnel. The $14.9 million judgment, which was handed down by U.S. District Judge Stephen V. Wilson on September 18, is approximately three times the losses suffered by Medicare as a result of the company’s illegal practices. Mun is currently scheduled to be sentenced in February.

A security contractor – The Macalan Group Inc., formerly known as NEK Advanced Securities Inc. (NEK) – recently agreed to pay the government $2.08 million to settle claims that it submitted false claims in connection with a contract with the Joint Improvised Explosive Device Defeat Organization (JIEDDO). In connection with the settlement, NEK will also relinquish an outstanding invoice for $744,969 and turn over numerous weapons and accessories acquired under the contract.  The settlement stems from a lawsuit accusing NEK of submitting false invoices in connection with a contract to develop and deploy teams of specialized personnel to Iraq and Afghanistan to combat improvised explosive devices.

Conax Florida Corp. recently paid $2 million to the government to settle allegations that the company submitted false claims to the government for improperly tested inertia reels and non-conforming voltage references, both of which are used by NASA and the U.S. military to secure and protect aircrew members in the event of a crash. Conax also reached an agreement with the Defense Logistics Agency to provide the government with 4,969 new electronic parts for use with parachute releases, which are worth up to $2.4 million. The lawsuit, which was filed by two former employees of Conax, alleged that the inertia reels were not tested in accordance with contractual requirements and that Conax used non-conforming voltage references. As a result of the settlement, the whistleblowers will together receive up to a total of $810,478.

A recent article highlights the challenges that states have with respect to fraud and inadequate health care. The article “States take hands off approach with Medicaid managed care plans despite fraud or poor care” takes aim at state health agencies that continue to contract with health care providers, despite allegations or findings of fraud and inadequate care, because the state agencies are afraid of leaving patients without access to care.

The whistleblower attorneys at Goldberg Kohn are committed to fighting fraud against the government and protecting the rights of whistleblowers. Below are summaries of recent developments pertaining to whistleblower, qui tam, and False Claims Act actions throughout the United States.

Please contact us at (312) 863-7222 if you would like to learn more about any of the aforementioned whistleblower news updates or would like to schedule a free, confidential appointment with one of our nationally-recognized whistleblower attorneys.