On February 22, 2024, the Department of Justice announced that settlements and judgments under the False Claims Act exceeded $2.83 billion for the fiscal year ending September 30, 2023. These 543 settlements and judgments marked a record-breaking number of settlements and judgments in a single year.

The announcement highlighted the importance of cases filed by whistleblowers in exposing fraud. In the fiscal year 2023, whistleblowers filed 712 qui tam lawsuits. Of the $2.68 billion in reported settlements and judgments, the government recovered more than $2.3 billion from cases filed by whistleblowers.  Whistleblowers who exposed fraud by filing qui tam cases were paid more than $349 million by the government.

The settlements and judgments related to fraud in various areas including health care, procurement, pandemic-related fraud, and cyber-fraud.

doj false claims act settlements

Healthcare Fraud

Fraud in the healthcare industry continues to be the main source of recovery in False Claims Act cases. The government recovered more than $1.8 billion related to fraud in health care including fraud in the Medicare Advantage program, billing for unnecessary services, providing substandard care, exacerbating the opioid epidemic, and unlawful kickbacks.

For example, The Cigna Group agreed to pay $172 million and Martin’s Point Health Care Inc. agreed to pay $22.5 million to resolve allegations that they knowingly submitted inaccurate diagnosis codes for Medicare Advantage enrollees to increase payments from Medicare.

Cornerstone Hospital Medical Center and other entities agreed to pay $21.6 million to resolve allegations that it knowingly submitted claims for services performed by unlicensed students, did not provide services, or that the services it provided were worthless.

Carter Healthcare LLC and its President and CEO agreed to pay $22.9 million to resolve kickback allegations that it improperly paid physicians for medical directorships to induce referrals of patients.

Here at Bracker & Marcus, healthcare fraud is our bread and butter. In 2023, we had three intervened settlements. Our case alleging that an ophthalmology group was engaged in cataract kickbacks settled for $2.9 million. Another case alleging overbilling for COVID testing visits settled for $1.6 million. We also had a $225,000 settlement of allegations that a local provider was upcoding her patient visits.

This followed three healthcare settlements just before the new year. The first was a $13 million settlement against Advanced Bionics, a manufacturer of cochlear implants.

The second was a $1.9 million settlement in a case alleging that an orthopedic practice improperly billed for viscosupplementation injections, which we litigated alongside the USAO for the Northern District of Mississippi.

Finally, the Government settled a case against a billing company for billing medically unnecessary respiratory pathogen panels when providers had only ordered COVID tests. This settlement was for just over $300,000.

Most recently, and related to that RPP settlement, we had a $14.3 million settlement against a laboratory resolving allegations that it billed Medicaid for unnecessary drug testing of high school students and for billing the government for expensive panels in addition to routine COVID tests. This settlement will be counted towards next year’s totals.

PPP Fraud

The government recovered over $48.3 million in the past fiscal year related to improper PPP loans. For example, Victory Automotive Group Inc. agreed to pay $9 million to resolve allegations that it falsely certified that it employed fewer than 500 people when its affiliated dealerships employed more than 3,000 employees.

Partner Jason Marcus is one of the most experienced and prolific PPP fraud attorneys in the Relators’ bar. In 2023 alone, Bracker & Marcus filed 41 PPP cases, and as our cases have become unsealed and settlements announced, more PPP prospectors have sought our expertise to help them stake their claims.

Our firm brought a case similar to Victory, tying that case for the largest PPP settlement thus far. We alleged that a company had improperly applied for separate PPP loans for each affiliated entity instead of adding them together, which would have resulted in the company being ineligible. This also resulted in a $9 million settlement.

We also had a December settlement of nearly $1 million resulting from our showing that that a marijuana-related business was ineligible for PPP funds.

Cybersecurity Fraud

The Department of Justice also has begun to resolve a few cases related to the new Civil Cyber-Fraud Initiative holds government contractors responsible under the False Claims Act for failing to adhere to cybersecurity requirements, misrepresenting their cybersecurity status, and reporting breaches on time.

The initiative is still new, but earlier this year, Jelly Bean Communications Design LLC paid $293,771 to resolve allegations that it failed to secure personal information hosting for a federally funded children’s health insurance website.

Verizon Business Network Services LLC submitted a written self-disclosure to the government, admitting to having failed to completely satisfy three critical controls required by the General Services Administration contracts, and settled its claim for $4.091,317 – which was a 1.5 multiplier on damages because of it was given “cooperation credit” for having self-disclosed.

Finally, the U.S. settled two whistleblower cases brought under the Initiative against Comprehensive Health Care Services LLC, resolving concerns about how the company fell below cybersecurity standards for maintaining personal medical information at government-run facilities in Iraq and Afghanistan.

Partner Julie Bracker has quickly become a leading relator’s counsel for cybersecurity fraud cases, a burgeoning area of False Claims Act litigation. As is apparent from the DOJ taking the time to highlight a $300,000 settlement, there have not been many settlements yet. Still, the Department of Justice recently intervened in one of our cases, the first intervention with potential litigation of the new initiative. We also have a second cybersecurity case that has been unsealed but is similarly not yet settled and may result in litigation.

Another Year of Record-Breaking Settlements

Bracker & Marcus LLC represents whistleblowers under the federal False Claims Act. If you have questions about fraud, we are here to help. Book your free evaluation today.