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iStock-117144640-1-300x200A federal jury returned a $24 million judgment against an importer of Chinese steel pipe fittings, finding that it knowingly violated the False Claims Act by evading applicable anti-dumping duties. The importer says its non-payment of duties was “objectively reasonable.”

False Claims Act lawyers are monitoring the appeal in U.S. v. Sigma Corp., which is scheduled for oral argument before a U.S. Court of Appeals for the Ninth Circuit panel on Jan. 10, 2023. A qui tam whistleblower lawsuit involving an importer’s alleged knowing failure to pay anti-dumping duties on pipe fittings imported from China, the case raises hugely controversial questions relating to the False Claims Act’s knowledge requirement.

Applicability of Safeco Under the False Claims Act
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iStock-465505283-300x200The fraud was exposed by a former ModMed executive who filed a qui tam lawsuit under the False Claims Act. He will receive a $9 million whistleblower award.

Florida-based electronic health records firm Modernizing Medicine has paid $45 Million to resolve allegations it violated the False Claims Act by paying and receiving kickbacks in violation of the Anti-Kickback Statute.  According to the U.S. Department of Justice, ModMed partnered with pathology lab firm Miraca Life Sciences to jointly promote ModMed’s cloud-based EHR software and Miraca’s pathology laboratory services through illegal kickbacks.

Miraca previously paid $63.5 million to settle False Claims Act allegations relating to the scheme, which was exposed by a whistleblower who filed a lawsuit under the qui tam provisions of the False Claims Act.  The whistleblower—a former ModMed product manager—will receive a whistleblower award of $9 million in connection with the ModMed settlement.

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iStock-1219693277-300x169OneBigOutlet allegedly evaded millions of dollars in duties on imports from China by filing commercial invoices with CBP understating its purchase prices.

California importer RGE Motor Direct Inc., which does business under the name OneBigOutlet, has paid $3.25 million to resolve allegations it fraudulently underreported the prices it paid for furniture it imported from China.  The settlement ends a lawsuit brought by a qui tam whistleblower which alleged that OneBigOutlet, in coordination with its Hong Kong affiliate, Royal Sourcing Limited, violated the False Claims Act by knowingly filing false commercial invoices with U.S. Customs and Border Protection, thereby skirting millions of dollars in Section 301 tariffs.

The whistleblower, a resident of Hong Kong who previously worked as a sourcing manager at Royal Sourcing, received a whistleblower award of 27.5% of the settlement proceeds, according to legal filings.

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iStock-1311468531-300x200The Rensselaerville Institute allegedly overstated its average monthly payroll to receive a larger PPP loan

The Rensselaerville Institute of Albany, New York, a community nonprofit, has paid $86,676 to settle allegations that it violated the False Claims Act by fraudulently overstating its eligibility for a loan under the Paycheck Protection Program, thereby obtaining more funds than it was entitled to receive.  In the settlement, Rensselaerville admitted it fraudulently overstated the organization’s average monthly payroll on its PPP loan application and, despite being alerted to the issue by auditors, did not return the excess funds but instead applied to the government for forgiveness of the entire loan.

The fraud was exposed by Rensselaerville’s former Chief Financial Officer, who filed a qui tam whistleblower lawsuit under the False Claims Act and received a whistleblower award of $17,000 from the settlement, the U.S. Department of Justice said.

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The settlement caps the DOJ’s nearly 20-year pursuit of False Claims Act lawsuits, prompted by a whistleblower complaint, against companies in the body-armor supply chain involving Zylon vests

Honeywell International, Inc. (Nasdaq: HON) has agreed to pay $3.35 million to resolve allegations it violated the False Claims Act by supplying defective ballistic material for bulletproof vests purchased by the U.S. Department of Defense and other federal agencies.  The settlement ends the DOJ’s decades-long pursuit of False Claims Act lawsuits against companies in the body armor supply chain that allegedly continued to manufacture, market, and sell Zylon bulletproof vests even after becoming aware that Zylon rapidly degraded in hot and humid conditions, compromising its ability to stop bullets.

Dangerous degradation
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The lawsuit is part of an effort by the U.S. Justice Department to investigate and litigate fraudulent diagnosis-coding practices by Medicare Advantage (Part C) insurers

 The U.S. Department of Justice has announced that it has sued health insurance company Cigna Corporation (NYSE: CI), alleging that it violated the False Claims Act by knowingly submitting false and invalid diagnosis codes to artificially inflate the capitation payments it receives from Medicare in connection with its Medicare Advantage health insurance plans.  The DOJ complaint-in-intervention was filed in a lawsuit initiated by a qui tam whistleblower under the False Claims Act.

The case is part of an ongoing effort by the DOJ to investigate and litigate improper diagnosis coding by private insurers operating Medicare Advantage (Part C) health plans.

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iStock-1153436387-300x199The settlement follows Cardinal Health’s payment of $13M to resolve related False Claims Act allegations earlier this year

A Florida medical group has paid $130,000 to resolve allegations it violated the Anti-Kickback Statute (AKS) and False Claims Act by knowingly taking illegal kickbacks from pharmaceutical distributor Cardinal Health (NYSE: CAH).  The settlement, by the U.S. Department of Justice with Southeast Florida Hematology and Oncology Group, follows Cardinal Health’s payment of $13.1 million back in January to settle related False Claims Act allegations.

The scheme was exposed by two qui tam whistleblowers—a former Cardinal Health executive and a different medical practice in Florida that dealt with the drug distributor.  They shared $2.6 million of the Cardinal Health settlement as a whistleblower award.

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Badger-State firm allegedly failed to disclose that it qualified as a foreign agent which meant it was ineligible to participate in the Paycheck Protection ProgramiStock-1136317631-1-1-300x200

Milwaukee advertising firm Birdsall Voss & Associates, known as BVK, has paid $2.25 million to settle allegations that it violated the False Claims Act by fraudulently obtaining federal COVID-19 relief funds from the U.S. Small Business Administration under the Paycheck Protection Program, the Department of Justice has announced.

The DOJ alleged that BVK knowingly failed to disclose on its PPP loan application that it was required to register with the federal government as a Foreign Agent under the Foreign Agents Registration Act (FARA), which rendered it ineligible to receive a loan under the PPP “second-draw” program.

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Georgia firm allegedly falsely certified that its firefighting foam complied with military specifications1005981-1517608943

Georgia-based Fire Service Plus Inc. has agreed to pay $985,131 to settle claims that it violated the False Claims Act by knowingly supplying “substandard” and “defective” fire suppression foam to the U.S. military, the Department of Justice has announced.

Noncompliant fire-fighting foam
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Manufacturer of home respiratory equipment allegedly coaxed DME suppliers to recommend and buy more of its products by furnishing them with two types of kickbacks—HMS prescription data and loan guarantees

Philips Respironics, a subsidiary of the Netherlands-based Koninklijke Philips N.V. (NYSE: PHG) and a leading manufacturer of home respiratory equipment, has agreed to pay $26 million to settle two qui tam lawsuits alleging it violated the Anti-Kickback Statute (AKS) and False Claims Act by furnishing kickbacks to durable medical equipment suppliers.

The qui tam relator whose complaint exposed the bulk of the fraud will receive a $4.3 million whistleblower award.

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