FCA Settlement News

Defense Contractor SESOLINC Agrees to False Claims Act Settlement of up to $2.4 Million

Bracker & Marcus LLC is pleased to announce that the United States has intervened and settled a False Claims Act case filed by its client, Charles Jackson, against defense contractor SESOLINC Group for up to $2.4 million. SESOLINC is alleged to have knowingly sold defective products to the United States military and Department of Veterans Affairs. In addition to monetary payments, SESOLINC has agreed to repair all previously sold defective products.

When Charles Jackson came to our firm, he had but one concern: the safety of our nation’s soldiers. Mr. Jackson was a combat engineer for the U.S. Army for eight years, and his children also shared the honor of serving their country. In 2011, he became a salesman for SESOLINC, which builds pre-fabricated small buildings and equipment systems for the military and VA.

On his very first tour of the factory, Mr. Jackson—an electrician with over 30 years of experience—spotted safety issues with the systems that SESOLINC sold, including use of the wrong types of wiring, bushings, boxes, and other parts; improper grounding; lack of wire protection conduits; and lack of proper insulation. These systems were built to be transported from base to base and even flown across oceans to be used in theater of war. If jostling during transport were to shred a wire, simply because it was the wrong type or lacked standard safety protections, the systems could fail, fires could start, and soldiers could be electrocuted. He immediately raised his concerns with management about the defective and unsafe products and was told they’d be dealt with, but they never were.

For the next few years, whenever Mr. Jackson sold a system to his military customers, he personally checked it after delivery and made any necessary repairs. But in fall of 2014, customers at other bases started to complain that their systems were failing and constituted a safety hazard. After months of accusing the customers of “user-error”, SESOLINC issued a callback on a small subset of the systems, hiding from the military that all of the other systems contained similar issues and threatening to fire anyone who even mentioned another system. Mr. Jackson, not one to be silenced, complained to his supervisors that SESOLINC needed to recall all of the systems, until he was fired. He subsequently retained Bracker & Marcus LLC to file a qui tam and claim of retaliation under the False Claims Act.

After more than three-and-a-half years, the Government has intervened and settled the claims against SESOLINC. The company has agreed to pay up to $2.4 million to settle Mr. Jackson’s allegations. And more importantly, it is engaging in a recall of its products to ensure that any defective or substandard systems that had previously been delivered to military units are repaired and in full working order. Mr. Jackson will receive a share of the recovery, but more importantly, he once again feels the pride of having served his country and having kept its soldiers safe.

We congratulate our client, Mr. Charles Jackson, as well as the team representing the United States of America on achieving this tremendous result: Assistant United States Attorneys Shannon Heath Statkus and J. Thomas Clarkson; Special Agent Lam Hoang with Defense Criminal Investigative Service; Special Agent James Parkinson with Army Criminal Investigative Division; Special Agent Priva Guillory with U.S. Department of Veterans Affairs Office of Inspector General; and Special Agent Steven Heckler with General Services Administration Inspector General.

The case is captioned United States ex rel. Jackson v. Sesolinc Group, Inc., Case No. 4:16-cv-00092-WTM-BKE (S.D. Ga.). The United States’ press release can be seen here.

Compound Pharmacy Agrees to $365,000 Settlement of False Claims Act Lawsuit

Bracker & Marcus LLC is pleased to announce that the U.S. Attorney’s Office for the Middle District of Georgia has reached an intervened “ability-to-pay” settlement with defendant Lake Country Pharmacy & Compounding Center and its owners in the amount of $365,000 plus interest. Lake Country will also be subject to a Corporate Integrity Agreement to ensure that it operates on the straight and narrow moving forward. Our client (who wishes to avoid media coverage) will receive a 20% relator’s share of the Government’s recovery.

In his qui tam complaint, our client alleged that Lake Country, an independent pharmacy in Greensboro, Georgia, was improperly billing Medicare, TRICARE, and Medicaid for compounded drugs made with expensive tablets, when in fact the drugs were made using cheap bulk powders that were not eligible for reimbursement. When he learned that this was improper while watching a seminar on ethical practices in compound pharmacies, he immediately reported his concerns to the owners, which resulted in him being fired and asked to leave the premises. (Our client’s claim of retaliation under the False Claims Act has also been settled.) In short order, he found our co-counsel, prominent Athens-area employment lawyer John Beasley, and together we filed a qui tam lawsuit. The United States found over $2.2 million in potential damages.

In addition to being an upstanding citizen, our client is a veteran of the United States Marine Corps. We are proud to have represented him in this action and congratulate him on having come forward and reported this matter to the Government. He knew from the start that this was not likely to be a large recovery, but his only concern was righting a wrong and protecting patients, and his integrity compelled him to be a whistleblower.

We also congratulate Assistant U.S. Attorney Todd Swanson and investigator Shakethia Morgan for a successful investigation and settlement.

Beaumont Hospital to Settle False Claims Act Case for $84.5 Million

The United States Department of Justice and U.S. Attorney for the Eastern District of Michigan has announced a settlement with William Beaumont Hospital of $84.5 million to resolve a False Claims Act lawsuit brought by our client, David Felten, M.D., Ph.D.

False Claims Act whistleblower David Felten, M.D., Ph.D.

False Claims Act whistleblower David Felten, M.D., Ph.D.

Surely one of the most prestigious whistleblowers in FCA history, Dr. Felten was recently listed among the “Thirty Most Influential Neuroscientists Alive Today.” Among many other honors, Dr. Felten is the lead author for Netter's Atlas of Neuroscience, and recipient of a MacArthur Genius Grant and two 10-year research MERIT Awards from two different National Institutes of Health. He is widely credited with creating the field of psychoneuroimmunology.

Bracker & Marcus LLC and Caplan Cobb LLP are proud to represent Dr. Felten and congratulate him, the federal government (in particular AUSAs Peter Caplan, Leslie Wizner, and Carolyn Bell-Harbin, lead investigator Jonathan Sonbay, and DOJ attorney Laurie Oberembt), and the state of Michigan for this outstanding result. In addition to the qui tam settlement, our firms continue to litigate a False Claims Act retaliation claim on his behalf. The case is captioned United States ex rel. Felten v. William Beaumont Hospitals, 2:10-cv-13440 (E.D. Mich.).

For more information on the case and settlement, please see our press release.

Relator Herretta Pickens Speaks Out on her Decision to File an FCA Suit

Last month, we announced a settlement with the Southern Spine & Pain Institute in a False Claims Act case brought by former employees Herretta Pickens and Teresa Williams. Ms. Pickens was a nurse practitioner at Southern Spine; she believed it was her calling to provide relief to those in pain. I asked Ms. Pickens, now that it was all over, why she decided to file a False Claims Act case in the first place. Here is what she said:

I started [down] this path because my patients wanted to be heard and needed a voice. Alone I was not much help, but with support from Teresa, and then you [Jason Marcus], Oscar [Prioleau], and Julie [Bracker], we made those voices heard.
During the process I further realized the enormous associated risks and threats to individuals who are economically challenged and/or uneducated. I now work harder than ever to be compassionate and empathetic with my patients. I do correctional medicine now and use this incident as a platform to help those with substance abuse issues and addiction to pain pills. I also have spoken [at] pain management education seminars put on by my peers. As difficult as this has been, it has been rewarding and taught me much. I hope this experience will make me a better provider.

Ms. Pickens chose a career in the medical profession to help people and, like many of our clients, came to us for that same purpose. Moreso than any other area of False Claims Act liability, Medicare and Medicaid fraud results in harm to the public, as patients face the prospects of unnecessary procedures, insufficient care, and exhausting of their insurance benefits. Healthcare fraud targets the sick and the infirm, the members of our society most in need of our attention and care, and we are thankful for practitioners like Herretta Pickens, who put their patients' well-being ahead of all else.

Southern Spine & Pain Institute Settles False Claims Act Suit for $430,000

Relators to receive 19.5% share of recovery.

"When physicians bill the government for medical services that are not needed by the patient, they violate the trust placed in them by their patients and the government to provide only medically necessary care."
U.S. Attorney John Horn

Bracker & Marcus LLC is pleased to announce that the United States and State of Georgia have settled allegations of wrongdoing by Southern Pain Institute, P.C, and its owner, Dr. Anthony Clavo. SPI operated three medical offices in the Atlanta area, as well as an ambulatory surgical center and pharmacy, treating patients with pain and related disorders. The United States and the State intervened and settled allegations that SPI submitted claims for services that were not medically necessary and where there was insufficient information in the medical records to support procedures performed and billed to Medicare and Medicaid.

"Delivering medically unnecessary treatment or failing to document the need for that care can be a serious threat to the health of the patient as well as the federal programs they depend upon."
HHS OIG SAC Derrick L. Jackson

Two brave women reported SPI in a qui tam action, after choosing to resign from the practice rather than participate in the fraud. Both had serious concerns that patients were being put in harm's way. Herretta Pickens was Dr. Clavo's nurse practitioner. She discovered that SPI had not maintained the medical records necessary to properly treat her patients and formed a belief that patients were being subjected to unnecessary procedures. Teresa Williams was a front office administrator, and she too harbored concerns that patients were being scheduled for procedures that they did not need. Things got so bad that in a single 24-hour period in March of 2015, they both quit, in response to separate incidents, without having had any prior discussion about doing so or bringing an FCA action together. Just a few months later, in July 2015, the two whistleblowers found each other, and Bracker & Marcus LLC filed a False Claims Act case on their behalf.

"Fighting Medicaid fraud has been and will remain a top priority for our office. People who misuse our medical systems divert funds from those in need of care and abuse Georgia taxpayer dollars."
Georgia Attorney General Chris Carr

Attorney Jason Marcus spent his days working directly with federal and state investigators, attorneys, and agents, digging through medical records and building a robust case against SPI. Before the investigation could be completed, both SPI and Dr. Clavo filed for bankruptcy, and the medical practice was closed. SPI soon thereafter settled the claims against it for $430,000 plus interest. Ms. Pickens and Ms. Williams will split a relator's share of 19% and 21% of the federal and state recoveries, respectively. The relators also settled personal retaliation claims under the False Claims Act.

"Those individuals in positions of trust within the healthcare industry have an inherent duty to be forthright in their claims submittals to those government programs that pay for their services. Through the False Claims Act settlement and the associated monetary judgments announced today, the defendant in this case, Dr. Anthony Clavo, understands this and the U.S. Government's position on this a lot better."
George Crouch, Acting Special Agent in Charge, FBI Atlanta Field Office

Bracker & Marcus LLC would like to thank and congratulate everyone who assisted with the prosecution of the case, including Assistant U.S. Attorney Lena Amanti, state Assistant Attorney General Sara Vann, and its co-counsel, Oscar Prioleau of Prioleau & Milfort, LLC.