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State Enforcement Actions

					
Each state enforces its laws and defends its interests, and states often work with the federal government in investigating and prosecuting corporate frauds. 聽Whistleblowers with knowledge of fraud or wrongful conduct that involves state or local funds or programs may be able to bring a claim under a state or local False Claims Act, and may be eligible to receive a monetary reward and protection against retaliation.


Below are summaries of recent settlements, successful prosecutions, and enforcement actions by states.聽If you believe you have information about fraud which could give rise to a claim under a State or Local False Claims Act or other whistleblower reward provision, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
October 17, 2016

				 New York has joined with other states and the federal government and reached agreement with institutional pharmacy Omnicare Inc. (Omnicare) to settle civil allegations that Omnicare conspired with Illinois-based pharmaceutical drug manufacturer Abbott Laboratories (Abbott) to increase overall utilization of the drug Depakote through the use of various disguised kickback arrangements.  Omnicare, acquired by CVS Health Corporation effective August 18, 2015, provides pharmaceuticals and related pharmacy services to long-term care facilities as well as chronic care facilities and other settings. Depakote is approved for treatment of seizure disorders, mania associated with bipolar disorder and prophylaxis of migraines. Omnicare will pay the states and the federal government a total of $28.125 million in civil damages to compensate Medicaid, Medicare, and various other federal healthcare programs for harm suffered as a result of its conduct.  				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  FCA State, 
													  Healthcare Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 12, 2016

				 Massachusetts negotiated an agreement with National Grid that returns more than $1.5 million to thousands of National Grid residential gas customers who were wrongfully charged a more expensive rate. Under the agreement, National Grid will issue bill credits to more than 4,500 residential gas customers who were incorrectly charged the company鈥檚 non-heating rate instead of the less expensive heating rate. Credit amounts will be customer-specific and issued later this year. 				 					 

						
Tagged in:
													  Contract Non-Compliance, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 5, 2016

				 A transportation company, its owner, and three managers have been indicted in connection with an alleged scheme involving $19 million in false claims billed to the state鈥檚 Medicaid program (MassHealth), Attorney General Maura Healey announced. The company primarily provided MassHealth members with non-emergency transportation services to methadone clinics. The AG鈥檚 Office alleges that between April 2011 and September 2015, Westminster-based Rite Way LLC (Rite Way) fraudulently and repeatedly billed MassHealth for transportation services that were never provided, including claims for individuals who were hospitalized in inpatient settings, no longer used the company鈥檚 services, or were deceased on the claimed dates of service. 

				 					 

						
Tagged in:
													  FCA State, 
													  Healthcare Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 4, 2016

				 Pennsylvania announced the Office of Attorney General has reached a settlement with a chain of nursing homes accused of misleading consumers by failing to provide basic services to elderly and vulnerable residents. The settlement with Reliant Senior Care Holdings, Inc. and related companies requires a $2 million payment to the Office of Attorney General and a series of changes devised to make sure that staffing levels and care within facilities owned or operated by Reliant match the representations made in marketing materials, care plans and bills. The settlement was the result of an investigation conducted by the Office of Attorney General鈥檚 Health Care Section. PA				 					 

						
Tagged in:
													  Healthcare Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 30, 2016

				 California, along with 49 other states and the District of Columbia, announced a $95.9 million settlement with USA Discounters over allegations that the company used deceptive marketing and unlawful debt collection practices targeting military service-members.  Under the settlement, Attorney General Harris secured nearly $7 million in restitution for over 4,100 Californians who were harmed by the company鈥檚 fraudulent actions. USA Discounters, which also did business as USA Living and Fletcher鈥檚 Jewelers, operated retail stores near military installations, including near Navy and Marine Corps installations in the San Diego Area.  It sold consumer products, including furniture, appliances, televisions, computers, smartphones, and jewelry, primarily on credit and specifically targeted members of the military and veterans. The company marketed itself as a discount retailer but actually sold its merchandise at a substantial mark-up, including additional fees that effectively concealed exorbitantly high interest rates for financed purchases. , FL, PA				 			
	
		
		
	


 			




	
		
		

			

				
				
September 30, 2016

				 New York announced guilty pleas by Katia Donnelly and her durable medical equipment and supply store, Bennett Surgical Supply, Inc., for submitting thousands of false claims to Medicaid resulting in Medicaid paying them more than two million dollars over a six and a half year period. Donnelly admitted during her plea that she used the Medicaid identification numbers of Bennett Surgical customers to fraudulently bill for items she never purchased or delivered to them. She and her corporation plead guilty to Grand Larceny in the Second Degree, and it is expected that Donnelly will be sentenced to 2 to 6 years in State Prison. 				 					 

						
Tagged in:
													  Healthcare Fraud, 
													  Medicaid, 
													  Medical Billing Fraud, 
													  Medical Devices and DME, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 28, 2016

				 A national mortgage servicer has paid $1.4 million and agreed to strengthen its policies over its alleged abusive debt collection practices that affected more than 5,000 borrower accounts in Massachusetts. Ditech Financial, LLC, previously GreenTree Servicing, LLC, agreed to change its practices to comply with state debt collection and consumer protection laws. The assurance of discontinuance requires that Ditech stop making excessive debt collection calls to consumers and provide written notice regarding the borrowers鈥� right to receive detailed information about any debts that Ditech sought to collect, as required by law. 				 			
	
		
		
	


 			




	
		
		

			

				
				
September 26, 2016

				 New York announced that it has entered into a settlement agreement with First Call, Inc., to resolve allegations that it billed Medicaid for transportation services provided by unqualified drivers and without required documentation. The investigation settled False Claims Act allegations that are identified in the settlement agreement, pursuant to a qui tam lawsuit filed by whistleblower Thomas D. Ayers asserting claims under the New York False Claims Act. As a result of the settlement, the company will pay New York State $173,650.83 in restitution and damages pursuant to the New York False Claims Act. 				 					 

						
Tagged in:
													  FCA State, 
													  Healthcare Fraud, 
													  Medicaid, 
													  Whistleblower Case, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 22, 2016

				 New York announced that, together with the Attorneys General of 34 other states and the District of Columbia, his office has filed a lawsuit against Indivior, the manufacturer of the branded drug Suboxone, and MonoSolRX, the company that licensed its patented sublingual film technology to Indivior. Suboxone is used to treat patients addicted to heroin and other drugs, including painkillers. The lawsuit alleges that Indivior (which was spun off from Reckitt Benckiser in 2014) tried to coerce patients to switch from a tablet to a dissolvable oral strip version of Suboxone and engaged in other anticompetitive business practices to maintain Indivior鈥檚 monopoly over Suboxone. 				 			
	
		
		
	


 			




	
		
		

			

				
				
September 20, 2016

				 New York announced the sentencing of licensed pharmacist Glenn Schabel, 55, of Melville, and his company, Glenn Schabel, Inc. in connection with a nation-wide scheme to sell diverted HIV medication to unsuspecting New Yorkers.  Schabel was sentenced to 2-6 years in prison, and forfeited $5,456,267 to the New York State Medicaid Program. This sentencing is part of the Attorney General鈥檚 Medicaid Fraud Control Unit鈥檚 (鈥淢FCU鈥�) 鈥淥peration Black-Market Meds鈥� investigation. 				 					 

						
Tagged in:
													  Drug Switching, 
													  Medicaid, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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