Month: November 2024

Source: United States Department of Justice Criminal Division

Pharmaceutical company QOL Medical LLC (QOL) and its co-owner and CEO, Frederick E. Cooper, have agreed to pay $47 million to resolve allegations that they caused the submission of false claims to federal health care programs, in violation of the False Claims Act and similar state statutes, by offering kickbacks in the form of free Carbon-13 breath testing services to induce claims for QOL’s drug Sucraid.

Sucraid is an FDA-approved therapy for the rare genetic condition Congenital Sucrase-Isomaltase Deficiency (CSID). CSID patients have difficulty digesting sucrose (table sugar) and suffer from gastrointestinal symptoms such as diarrhea, abdominal pain, bloating and gas.  

Beginning in 2018, QOL, with Cooper’s approval, distributed free Carbon-13 breath test kits to health care providers and asked providers to give the kits to patients with common gastrointestinal symptoms. QOL claimed that the test could “rule in or rule out” CSID. In fact, the test does not specifically diagnose CSID. Conditions other than CSID can cause a patient to test “positive” for low sucrase activity on a Carbon-13 breath test. Approximately 30% of the Carbon-13 breath tests from QOL were positive for low sucrase activity.  

QOL paid a laboratory to analyze the breath tests, report the results to health care providers and also provide the results to QOL. The results provided to QOL did not contain patient names, but did contain the name of the health care provider who ordered the test, along with the patient’s age, gender, symptoms and test result. Between 2018 and 2022, QOL disseminated this information to its sales force with instructions to make sales calls for Sucraid to health care providers whose patients had positive Carbon-13 breath test results. QOL tracked whether sales representatives converted “positive” Carbon-13 breath tests into Sucraid prescriptions. As QOL’s CEO, Cooper was aware of and approved the implementation and continuation of this marketing program.

Some QOL sales representatives also made claims to health care providers regarding the Carbon-13 test’s ability to definitively diagnose CSID that were not supported by published scientific literature. For example, in slides at a 2019 national sales training, which Cooper reviewed, QOL suggested that sales representatives tell health care providers, “If you have a positive breath test, the patient will not improve unless you treat with Sucraid.”  

As part of the settlement, QOL and Cooper admitted and accepted responsibility for certain facts providing the basis of the settlement.

“Participants in the federal healthcare system, including pharmaceutical manufacturers, may not offer improper inducements to generate business,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to protecting the integrity of federal health care programs, upholding the objectivity of treatment decisions by physicians and patients and preventing overutilization and waste in government health care programs.”

“QOL provided free goods to doctors and patients in order to induce prescriptions for the very expensive drug QOL manufactured,” said Acting U.S. Attorney Joshua S. Levy for the District of Massachusetts. “Not all kickbacks come in the form of cash going into a doctor’s or a patient’s pocket. Here, the defendants relied on free breath tests and misleading sales tactics to drive patients to their product. This conduct unnecessarily drained money from the federal health care programs and improperly influenced treatment decisions by physicians and their patients.”

“Kickback arrangements can compromise medical decisions and threaten the integrity of the Medicare program,” said Special Agent in Charge Roberto Coviello of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “We are committed to protecting taxpayer-funded health care programs and the patients served by those programs, and we will thoroughly pursue allegations of False Claims Act violations.”

“Kickbacks have no place in our healthcare system,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “This settlement should send a message that the FBI is committed to finding fraudsters and investigating all those who try to exploit the healthcare system at the expense of patients.”

“The Defense Criminal Investigative Service (DCIS), the law enforcement arm of the Department of Defense Office of Inspector General, has placed a high priority on pursuing companies that engage in fraudulent activity at the expense of the U.S. military,” said Special Agent in Charge Patrick J. Hegarty of the DCIS Northeast Field Office. “This settlement demonstrates our commitment to protecting the TRICARE program, and we will continue to work with our partners to ensure critical healthcare funds are utilized in the appropriate manner.”

The allegations resolved by the settlement agreement were, in part, originally brought in a case filed under the qui tam or whistleblower provisions of the False Claims Act by Elizabeth Allen, Lauren Canlas, Donald Johnson and Stacey Adams, who are former QOL Medical employees. The case is captioned United States ex rel. John Doe 1 et al. v. QOL Medical LLC, et al., No. 1:20-cv-11243 (DMA). The False Claims Act permits private parties to sue for fraud on behalf of the United States and to share in any recovery. The act also permits the government to intervene in such actions, as the government did, in part, in this case. Of the total $47 million recovery, approximately $43.6 million constitutes the federal portion of the recovery and approximately $3.4 million constitutes a recovery for State Medicaid programs. The whistleblowers will receive approximately $8 million from the federal portion of the recovery.

The government’s pursuit of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of Massachusetts, with investigative support from HHS-OIG, the FBI Boston Field Office, DCIS and Department of Veterans Affairs’ Office of the Inspector General.

Trial Attorneys Emily Bussigel and Paige Ammons of the Justice Department’s Civil Division and Assistant U.S. Attorneys Brian LaMacchia and Lindsey Ross for the District of Massachusetts handled the matter.

With the exception of the facts admitted by QOL and Cooper, the claims resolved by the settlement are allegations only. There has been no determination of liability.

Settlement

Source: United States Department of Justice Criminal Division

The Justice Department announced today that it secured a settlement agreement with Key Fortune Inc., doing business as Express Employment Professionals (Express), a staffing company in Rancho Cucamonga, California. The agreement resolves the department’s determination that Express discriminated against a worker because of her immigration status by refusing to continue to honor her valid document that showed her permission to work in the United States. The agreement also resolves the department’s determination that Express refused to place her on an assignment until she presented a specific document showing her future permission to work.

“It is unlawful for employers to require a specific document, or to reject a valid document, showing someone’s permission to work because of their immigration status,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The department is committed to protecting workers from immigration-related discrimination in the hiring process and eliminating unnecessary barriers to employment.”

After conducting an investigation based on a complaint, the Civil Rights Division’s Immigrant and Employee Rights Section (IER) concluded that Express unlawfully discriminated against a worker based on her immigration status when it rejected the worker’s Employment Authorization Document (EAD), which was still valid and not set to expire for an additional two months. Express then told the worker that it would not place her on an assignment until she provided a new EAD. Under the anti-discrimination provision of the Immigration and Nationality Act (INA), employers are not permitted to request specific documentation or reject valid documentation showing someone’s permission to work because of their immigration status.

Under the terms of the settlement, Express will pay a civil penalty to the United States and pay backpay to the affected worker. The agreement also requires the company to train its personnel on the INA’s anti-discrimination requirements, review its employment policies and be subject to departmental monitoring.

IER is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits discrimination based on citizenship status and national origin in hiring, firing or recruitment or referral for a fee; unfair documentary practices; or retaliation and intimidation.

IER’s website has information about how employers can avoid unlawful discrimination when verifying a worker’s permission to work. Learn more about IER’s work and how to get assistance through this brief video. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status or national origin in hiring, firing, recruitment or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public can also call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a live webinar or watch an on-demand presentation; email IER@usdoj.gov; or visit IER’s English and Spanish websites. Sign up for email updates from IER.

Source: United States Department of Justice Criminal Division

Ilya Lichtenstein was sentenced today to five years in prison for his involvement in a money laundering conspiracy arising from the hack and theft of approximately 120,000 bitcoin from Bitfinex, a global cryptocurrency exchange.

According to court documents, Lichtenstein, 35, hacked into Bitfinex’s network in 2016, using advanced hacking tools and techniques. Once inside the network, Lichtenstein fraudulently authorized more than 2,000 transactions transferring 119,754 bitcoin from Bitfinex to a cryptocurrency wallet in Lichtenstein’s control. Lichtenstein then took steps to cover his tracks by deleting from Bitfinex’s network access credentials and other log files that could have revealed his conduct to law enforcement. Following the hack, Lichtenstein enlisted the help of his wife, Heather Morgan, in laundering the stolen funds.

Lichtenstein, at times with Morgan’s assistance, employed numerous sophisticated laundering techniques, including using fictitious identities to set up online accounts; utilizing computer programs to automate transactions; depositing the stolen funds into accounts at a variety of darknet markets and cryptocurrency exchanges and then withdrawing the funds; converting bitcoin to other forms of cryptocurrency in a practice known as “chain hopping”; depositing a portion of the criminal proceeds into cryptocurrency mixing services; using U.S.-based business accounts to legitimize Lichtenstein’s and Morgan’s banking activity; and exchanging a portion of the stolen funds into gold coins.

On Aug. 3, 2023, Lichtenstein and Morgan both pleaded guilty to one count of conspiracy to commit money laundering. In addition to his term of imprisonment, Lichtenstein was ordered to serve three years of supervised release. Morgan is scheduled to be sentenced on Nov. 18.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Matthew M. Graves for the District of Columbia; Chief Guy Ficco of IRS Criminal Investigation (IRS-CI); Assistant Director Bryan Vorndran of the FBI’s Cyber Division; Special Agent in Charge Douglas S. DePodesta of the FBI Chicago Field Office; and Special Agent in Charge William S. Walker of the Homeland Security Investigations (HSI) New York Field Office made the announcement.

The IRS-CI Washington D.C. Cyber Crimes Unit, FBI Chicago Field Office, FBI Virtual Assets Unit, and HSI New York Field Office are investigating the case, with assistance from the Justice Department’s Office of International Affairs and the Ansbach Police Department in Germany.

Trial Attorneys Jessica Peck and C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Special Assistant U.S. Attorney Christopher B. Brown for the District of Columbia are prosecuting the case. Assistant U.S. Attorney Jolie Zimmerman, Paralegal Specialists Angela De Falco and Brian Rickers, and Legal Assistant Jessica McCormick, all for the District of Columbia, provided valuable assistance. CCIPS Trial Attorney Christen Gallagher, former Assistant U.S. Attorney Jessica C. Brooks for the District of Columbia, the U.S. Attorneys’ Offices for the Eastern District of Pennsylvania and Southern District of New York, and the HSI Philadelphia Field Office also provided significant assistance.

Consistent with standard practice in criminal forfeiture cases, there will be a formal process pursuant to Rule 32.2 of the Federal Rules of Criminal Procedure for third-party claimants to submit claims for any seized and forfeited property. Additional information is available on the Justice Department’s website for large cases at www.justice.gov/usao-dc/2016-bitfinex-hack.