Canadian Company to settle defective armor allegations

Barrday Inc. and two related companies have agreed to pay the United States over $1 million to resolve allegations that they violated the False Claims Act in connection with their role in the weaving of Zylon fabric used in the manufacture and sale of defective Zylon bullet-proof vests, according to the Justice Department.

The United States alleged that Barrday’s woven Zylon fabric was used in the manufacture of bullet-proof vests sold by Second Chance Body Armor Inc., Point Blank Body Armor Inc. and Gator Hawk Armor Inc. These vests were purchased by the United States, and other law enforcement agencies. The government alleged that the Zylon in these vests lost its ballistic capability quickly, especially when exposed to heat and humidity.

Barrday was allegedly aware of the defective nature of the Zylon by at least December 2001, but continued to sell Zylon for use in ballistic armor until approximately 2003, when two police officers were shot through their Second Chance Zylon vests.

This settlement is part of a larger investigation of the body armor industry’s use of Zylon in body armor. The United States previously has settled with four other Zylon makers for over $46 million.

Read more...

SouthernCare Inc. Settles Hospice False Claims Case

SouthernCare Inc. and its shareholders have agreed to pay the United States a total of $24.7 million to settle allegations that the Birmingham, Ala.-based company submitted false claims to the government for patients treated at its hospice facilities, according to a press release issued by the U.S. Attorney for the North District of Alabama. SouthernCare operates approximately 99 locations that provide hospice services in 15 states. The government alleged that SouthernCare was submitting false claims for hospice care for patients who were not eligible for such care.

The settlement is the result of two False Claims Act cases filed by two former SouthernCare employees, Tanya Rice and Nancy Romeo. The United States will pay $4.9 million to the individuals who filed the actions against SouthernCare.

The investigation was jointly handled by the U.S. Attorney’s Office for the Northern District of Alabama, the U.S. Attorney’s Office for the Northern District of Georgia, the Justice Department’s Civil Division, Office of the Inspector General of the Department of Health and Human Services and the FBI.

Read more...

ACLU claims False Claims Act “secret” filings violates First Amendment

The ACLU has filed a lawsuit seeking a declaration that the False Claims Act “secret” filings requirement violates the First Amendment right to free expression.

“The overreaching secrecy provisions of a whistleblower law prevent the public from learning about serious allegations of fraud against the United States government,” the ACLU claims in its January 16, 2009 press release.

The ACLU’s Complaint asserts that the FCA provisions requiring complaints to be filed under seal and out of the public’s view “violate the public’s First Amendment rights.” The Complaint also observes that because of the secrecy of the filings, the public does not know the full extent of allegations of fraud on the government.

The suit claims there is no “compelling interest” in keeping the cases secret.

However, the government has an interest in keeping the matter under seal and out of the public’s view: to investigate allegations of fraud without giving advance notice to the wrongdoer.

Read more...

Chicago ad agency agrees to pay $15.5 million for allegedly overbilling Army

One of Chicago's oldest and most prestigious advertising agencies, Leo Burnett has agreed to pay the United States $15.5 million to settle a False Claims Act case, the Chicago Sun Times is reporting.

The lawsuit alleged the ad agency submitted false billing claims to the U.S. Army for work done on its “Army of One” recruiting campaign from 2000-2005. Leo Burnett “submitted invoices from its internet division and an affiliated company as third party independent contractors to increase its profit margin,” According to the U.S. Attorney’s press release.

The qui tam Relators are Greg Hamilton, a former vice president of Burnett, and Michelle Casey, a former comptroller. The Relators will receive $2.79 million in the settlement.

In 2006, this case became part of National Procurement Fraud Initiative, which was designed to promote "the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other governmental programs."

Read more...

Sleep clinic settles FCA suit.

HMSD Inc. has paid over $550,000 to settle allegations that it violated the False Claims Act, according to a press release from the Houston U.S. Attorney's Office.

HMSD Inc. is an Independent Diagnostic Testing Facility specializing in the treatment of sleep disorders. The federal government alleged that the HMSD Inc. technicians who administered sleep diagnostic tests did not hold the proper certification, although HMSD Inc. certified it had licensed technologists performing the tests. The government alleged that "HMSD Inc. … should not have billed the tests to Medicare nor should they have received Medicare reimbursement for the tests.”

In addition to the monetary settlement, HMSD Inc. has entered into an "integrity agreement" with the government, "to promote compliance with the statutes, regulations, program requirements and written directives of Medicare, Medicaid and all federal health care programs."

Read more...