Health Net Federal Services, LLC and Centene Corporation Agree to Pay Over $11 Million to Resolve False Claims Act Liability for Cybersecurity Violations

Source: United States Department of Justice

Note: View the settlement agreement here

Health Net Federal Services Inc. (HNFS) of Rancho Cordova, California and its corporate parent, St. Louis-based Centene Corporation, have agreed to pay $11,253,400 to resolve claims that HNFS falsely certified compliance with cybersecurity requirements in a contract with the U.S. Department of Defense (DoD) to administer the Defense Health Agency’s (DHA) TRICARE health benefits program for servicemembers and their families. In 2016, Centene acquired all of the issued and outstanding shares of Health Net Inc., HNFS’s corporate parent, and assumed the liabilities of HNFS.

“Companies that hold sensitive government information, including sensitive information of the nation’s servicemembers and their families, must meet their contractual obligations to protect it,” said Acting Assistant Attorney General Brett A. Shumate, head of the Justice Department’s Civil Division. “We will continue to pursue knowing violations of cybersecurity requirements by federal contractors and grantees to protect Americans’ privacy and economic and national security.”

“Safeguarding sensitive government information, particularly when it relates to the health and well-being of millions of service members and their families, is of paramount importance,” said Acting U.S. Attorney Michele Beckwith for the Eastern District of California. “When HNFS failed to uphold its cybersecurity obligations, it didn’t just breach its contract with the government, it breached its duty to the people who sacrifice so much in defense of our nation.”

“This settlement reflects the significance of protecting TRICARE, and the service members and their families who depend on the health care program, from risks of exploitation,” said Cyber Field Office Special Agent in Charge Kenneth DeChellis of the Defense Criminal Investigative Service (DCIS), the law enforcement arm of the DoD Office of Inspector General. “DCIS will not be deterred from investigating contractors that fail to comply with federal cybersecurity requirements and risk exposing protected information vulnerable to criminal hackers. The U.S. taxpayers who fund these government contracts expect no less.”

The settlement resolves allegations that, between 2015 and 2018, HNFS failed to meet certain cybersecurity controls and falsely certified compliance with them in annual reports to DHA that were required under its contract to administer the TRICARE program. The United States alleged that HNFS failed to timely scan for known vulnerabilities and to remedy security flaws on its networks and systems, in accordance with its System Security Plan and the response times HNFS had established. Furthermore, the United States alleged HNFS ignored reports from third-party security auditors and its internal audit department of cybersecurity risks on HNFS’ networks and systems related to asset management; access controls; configuration settings; firewalls; end-of-life hardware and software in use; patch management (i.e., installing critical security updates released by vendors to counter known threats); vulnerability scanning; and password policies.

The Civil Division’s Commercial Litigation Branch (Fraud Section) and the U.S. Attorney’s Office for the Eastern District of California handled the matter, with assistance from DoD’s Office of Inspector General, including the DCIS, Cyber Field Office Western Region and the Inspector General’s Office of Audits, Cyberspace Operations Directorate, and DoD’s Defense Contract Management Agency, Defense Industrial Base Cybersecurity Assessment Center.

Trial Attorneys Christopher Wilson, Laura Hill, and Jonathan Thrope of the Civil Division’s Fraud Section and Assistant U.S. Attorney Steven Tennyson for the Eastern District of California represented the United States in this matter.

The claims asserted against defendants are allegations only; there has been no determination of liability.

District Court Enters Permanent Injunctions Prohibiting Unauthorized Debits to Consumer and Small Business Bank Accounts

Source: United States Department of Justice Criminal Division

On Jan. 31, a court in Miami entered the final in a series of consent decrees, permanently barring 10 individuals and entities from operating a scheme to steal funds from thousands of bank accounts belonging to consumers and small businesses across the United States.

In a civil complaint unsealed on Dec. 11, 2023, the Justice Department alleged that a network of individuals and their companies, including defendants Farhan Khan, Jeremy Todd Briley, Christopher Foufas, Brandon Hahn, and Melinda Petit-Homme, participated in a scheme to steal millions of dollars from consumers and small businesses by making recurring unauthorized charges against their bank accounts.

The defendants allegedly used sham companies, including Altitude Processing Inc., which does business as Clear Marketing Agency, to cover their tracks and make the unauthorized charges appear legitimate. The defendants also allegedly took elaborate steps to portray the sham companies as legitimate businesses that provided online marketing services, creating bogus websites for the sham companies, fake customer authorizations for the charges, and a “customer service” call center to field complaints and offer refunds. The government alleged that, in reality, victims of the scheme never signed up for — or received — any services from the defendants.

“These consent decrees are the hard-won result of the Department’s efforts to eradicate schemes that prey upon consumers and small businesses across the United States,” said Acting Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division. “The Department is committed to using all the tools at its disposal to block fraudsters from reaching into victims’ bank accounts and draining their savings through repeated unauthorized charges.”

“The U.S. Postal Inspection Service will relentlessly pursue any and everyone masquerading as legitimate businesses to fraudulently steal money from unsuspecting consumers,” said Inspector in Charge Eric Shen of the Postal Inspection Service’s Criminal Investigations Group. “Postal inspectors work diligently to investigate fraud scams and educate the public about how to protect their money from criminals.”

Under the consent decrees, the defendants may not charge consumers without authorization. The consent decrees also prevent the defendants from taking any measures to: (a) evade fraud and risk monitoring programs established by any financial institution, payment processor, or the operator of any payment system; (b) disguise the nature of transactions; or (c) artificially reduce chargeback rates. They are further prohibited from assisting any other individuals or entities with taking any of the prohibited actions. The consent decrees do not constitute an admission of guilt on behalf of the defendants.

The United States Postal Inspection Service investigated the case.

Trial Attorneys Carolyn Rice and Meredith Reiter of the Civil Division’s Consumer Protection Branch represented the government in this matter. The U.S. Attorney’s Office for the Southern District of Florida provided substantial assistance.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at www.justice.gov/civil/consumer-protection-branch.

Defense News: U.S. Navy Joins Multilateral Naval Exercise Komodo in Indonesia

Source: United States Navy

MNEK emphasizes multilateral maritime cooperation and disaster response protocols. The exercise takes place in conjunction with the International Maritime Security Symposium (IMSS), the largest international symposium organized by the Indonesian Navy. The theme of this year’s IMSS is “Addressing Maritime Security Challenges with Technology and Cooperation.”

“I am proud of what the U.S. Pacific Fleet and our joint force can generate in terms of military power, our ability to synchronize in all domains, and do all of that with our allies and partners,” said Adm. Steve Koehler, commander, U.S. Pacific Fleet, during his presentation at the IMSS. “We will continue to be a reliable maritime partner for all like-minded nations and their citizens in support of a free and open Indo-Pacific. We do so with unity of purpose, and with a powerful and resolute force.”

The Arleigh Burke-class guided-missile destroyer USS Dewey (DDG 105), as well as a P-8A Poseidon aircraft from Commander, Task Force 72, are representing U.S. Navy forces in the exercise.

The theme for this year’s MNEK is “Maritime Partnership for Peace and Stability.” The theme is designed to encourage multinational naval forces coordination to strengthen Humanitarian Assistance and Disaster Relief (HA/DR), establish civil-military linkage, and enhance a mutual understanding and interoperability toward affected regions.

During a six-day harbor phase, the exercise will include international military workshops on infrastructure repairs and emergency medical response, as well as community outreach and cultural exchanges. That will be followed by a sea phase, during which participating ships and aircraft will conduct coordinated maneuvering and search-and-rescue training.

Komodo 2025 is the fifth iteration of the exercise, which was first held in 2014.

Dewey operates under Destroyer Squadron (DESRON) 15, the U.S. Navy’s largest forward-deployed destroyer squadron and U.S. 7th Fleet’s principal surface force.

U.S. 7th Fleet is the U.S. Navy’s largest forward-deployed numbered fleet, and routinely interacts and operates with allies and partners in preserving a free and open Indo-Pacific region.

Defense News: US, Japan Conduct Combined Operations

Source: United States Navy

“Combined operations are a testament to our nations’ shared commitment: ensuring we are able to fly, sail, and operate safely and responsibly, wherever international law allows,” said Capt. Justin Harts, Commander, Destroyer Squadron (DESRON) 15. “The experience our US destroyers gain from operating alongside our allies and partners is invaluable, and we take any opportunity to do so.”

Operations included dynamic maneuvering and communications drills during this multi-lateral exercise. We continue to integrate with partner nations to train, exercise and develop tactical interoperability.

“Through these operations, we enhanced our tactical capability and interoperability with the U.S. Navy. We are closely collaborating together anytime at sea in order to contribute to regional stability, as well as a Free and Open Indo-Pacific,” CDR Shota TAKASHIRO, Commanding Officer, JS Asahi said.

The U.S. Navy regularly operates alongside our allies in the Indo-Pacific region as a demonstration of our shared commitment to upholding international law. Combined operations such as this one provides valuable opportunities to train, exercise and develop tactical interoperability across allied navies in the Indo-Pacific.

Dewey is forward-deployed and assigned to Destroyer Squadron (DESRON) 15, the Navy’s largest DESRON and the U.S. 7th Fleet’s principal surface force.

U.S. 7th Fleet is the U.S. Navy’s largest forward-deployed numbered fleet, and routinely interacts and operates with allies and partners in preserving a free and open Indo-Pacific region.

Defense News: U.S. Navy EOD Conducts Arctic Warfare Exercise ‘Arctic Specialist’ with NATO Allies in Norway

Source: United States Navy

Arctic Specialist is an annual Norway-hosted multinational joint EOD and expeditionary mine countermeasures (ExMCM) exercise providing training at the platoon and squad level and the development of land and maritime EOD tactics, techniques and procedures (TTPs) in a cold-weather environment. Allied forces from Denmark, Norway, and Sweden trained alongside U.S. forces at this year’s event.

“Arctic Specialist represents one of the premier exercises where Thunderstealers hone our cold weather survival, EOD, and diving skills,” said Cmdr. John Kennedy, Commander, Task Group (CTG) 68.1 (EODMU 8). “The opportunity to train alongside such capable Allies builds confidence in our ability to deploy to the Arctic region and sustain combat operations.”

According to the Department of Defense’s 2024 Arctic Strategy, “Major geopolitical changes are driving the need for this new strategic approach to the Arctic, including Russia’s full-scale invasion of Ukraine, the accession of Finland and Sweden to the NATO Alliance, increasing collaboration between the People’s Republic of China (PRC) and Russia, and the accelerating impacts of climate change. This increasingly accessible region is becoming a venue for strategic competition, and the United States must stand ready to meet the challenge alongside Allies and partners.”

While arctic strategy and presence is a growing priority for the U.S. military, training for arctic warfare with our Allies in the high north is not a new initiative for U.S. Navy EOD. In 1986, Norway began hosting an annual “EOD Ex”, which in 2012 became Arctic Specialist.

“This is my 14th year participating at this exercise. The value of it, beyond working together on realistic scenarios and exchanging knowledge and TTPs, is getting to know other nations. Learning cultural respect and traditions, their working methods, the ‘do’s and don’ts’. Whatever the operation is going to be, it is important to get to know your Allies on a deep level,” said a Lieutenant Commander Operations Officer of Norwegian Naval EOD Command.

The exercise has continued to provide an excellent training ground for EOD operators to hone their skills and operate in a uniquely challenging environment alongside NATO Allies and partners. Unique to this year’s exercise was the participation of Sweden, NATO’s newest member, for the first time.

Participation in such exercises will enable our EOD and diving forces to increase warfighting skills in arctic conditions, use lessons learned from past engagements, and provide opportunities to learn from our Allies’ extensive cold weather operating experience.

During the 11-day exercise, EOD and MCM forces exchanged knowledge for countering regional and global security threats. A multinational Tactical Operations Center (TOC) was established to provide command and control, intelligence, and advanced communications for all participating units.

Beyond in-depth training on cold weather survival techniques, the exercise included live demolition for mine countermeasure diving, conventional munition disposal, limpet mine response, historical ordnance disposal operations (HODOPS), and chemical and homemade explosive (HME) response. All training was designed with an emphasis on integrated multinational operations at the tactical level in preparation for major combat operations.

EODMU 8’s MCM Company Commander, Lt. Andrew Lewis, said, “Forward deploying our team to Norway has been critical to our development of warfighting skills in arctic conditions. Through working with our peers from Denmark, Sweden, and Norway—subject matter experts who live and operate in this environment year-round—we have gained a new understanding of and respect for the difficult conditions we could face while operating in the Arctic. Exercises like Arctic Specialist allow us to continue improving our knowledge, skills, and tactics by conducting increasingly complex and high-end missions, and to build lasting bonds with our Allies.”

As the arctic security environment evolves, training, exercising, and operating in the Arctic will improve U.S. Navy EOD’s operational effectiveness by familiarizing the expeditionary Force with the unique and demanding operating environments of the European Arctic region. By exercising alongside Arctic Allies, the Force continues to improve interoperability and gains regional expertise.

“This exercise is designed for the operators. The focus is ground level training, developing the skills of the EOD technicians, and everyone getting stronger,” said a Lieutenant from Norwegian Naval EOD Command.

Before AS kicked off, a platoon of U.S. Navy EOD operators from EODMU 8 and Norwegian Navy EOD clearance divers from Minedykker Kommandoen (Norwegian Naval EOD Command) completed a 2-week winter warfare training in Hovden, Norway, focused on arctic mobility and survivability.

The winter warfare course consisted of academic training, gear preparation, cross country, back country, and downhill skiing instruction, ski training with heavy rucksack, cold weather injury treatment and prevention, improvised shelter building, camp set up, proper clothing loadout, avalanche safety training, cold weather demolition, small arms shooting on skis, and freezing water response.

“The value to the guys was immeasurable. Most of them started off the training without ever having skied and some never having seen snow in their lives. We went from that, to being able to self-sustain for 96 hours in the brutal, non-forgiving Norwegian wilderness in 6 feet of snow, transiting roughly 20 kilometers through the mountains, on back country skis, while wearing 70 lb. rucks,” said Explosive Ordnance Disposal Senior Chief Karl Sowinski, EODMU 8 ExMCM Company senior enlisted leader and lead exercise planner. “The cost of ending up out there alone, without the proper gear and training, is death. Out of all the environments we operate in, the Arctic is the only one that is actively trying to kill you 24/7.”

The team did a cold-water plunge in a freezing river, where they had to function under extreme stress and cold shock. Surrounded by snow and ice, they fully submerged in the icy water, then worked through their cold response by controlling their breathing and responding to a series of questions to demonstrate mental acuity before exiting the water, donning dry clothing, and rewarming.

“The critical takeaway of this exercise was the integration and interoperability. During the winter warfare portion, prior to Arctic Specialist, the U.S. EOD operators looked to us for our expertise in Arctic survival techniques. During Arctic Specialist, we [Norwegian EOD] looked to the U.S., Sweden, and Denmark teams for new technology or methods that we may not currently use,” said a platoon commander from Norwegian Naval EOD Command. “When we work with our Allied peers, the most valuable part is the group dynamic and becoming a team. We bond on both a personal level and as a military team, making us stronger for future engagements.”

Continuing to exercise presence in the high north through training and operations will enhance deterrence by demonstrating combat-credible capabilities and the ability to respond rapidly to threats in the Arctic and elsewhere around the globe.

U.S. Navy EOD stands ready to protect U.S. interests from explosive threats in the face of new challenges and an evolving security environment.

CTF-68 commands all naval expeditionary combat forces in the U.S. European Command and U.S. Africa Command areas of responsibility in direct support of U.S. Naval Forces Europe -Africa, and U.S. 6th Fleet.

U.S. 6th Fleet conducts the full spectrum of joint and naval operations, often in concert with allied, joint, and inter-agency partners, in order to advance U.S. national interests and security and stability in Europe and Africa.

For additional news about U.S. Navy EOD, visit https://www.dvidshub.net/unit/EODG-2.