Find Corporate Waste

Tag: False Claims Act

  • Abusive Michigan Day Care Owner Billed Medicare for Dead Patients

    Abusive Michigan Day Care Owner Billed Medicare for Dead Patients

    A Michigan adult day care owner pleaded guilty to billing Medicare for psychotherapy services that were never provided, including sessions supposedly performed after patients had died.

    According to the Justice Department⁠, Yolanda Matthews, 58, of Farmington Hills, submitted more than $539,000 in false Medicare claims.

    Matthews admitted billing for services while beneficiaries were hospitalized and filing claims under the names of social workers who no longer worked at her adult day care center. She also billed Medicare for treating beneficiaries after their deaths.

    Matthews pleaded guilty to conspiracy to commit health care fraud after being charged through the 2026 National Health Care Fraud Takedown. She faces up to 10 years in prison when sentenced on Nov. 18.

    Both Matthews and her husband were previously found responsible for abusing patients in their care.

    Link to allegations: https://adultfostercare.apps.lara.state.mi.us/Home/ViewReport/341911
  • Dallas Lab and Founders Pay $24M Over COVID Testing Claims

    Dallas Lab and Founders Pay $24M Over COVID Testing Claims

    Dallas-based Magnolia Diagnostics, its owners and several investors will pay $24 million to resolve allegations involving medically unnecessary testing performed on seniors during the COVID-19 pandemic.

    According to the Justice Department⁠, Magnolia and owners John Bains and Kelly Bains agreed to pay $19.2 million to settle False Claims Act allegations. Investors will pay another $4.8 million over distributions they received from the laboratory.

    Federal officials alleged Magnolia required senior living communities seeking COVID-19 testing to also obtain expensive respiratory pathogen panels. The laboratory allegedly used prepopulated forms and provider signatures as standing orders covering entire facilities without individual clinical assessments.

    Magnolia allegedly continued performing the panels even after communities questioned their medical necessity or requested COVID-19-only testing. John Bains was also accused of threatening to withhold COVID-19 testing and altering signed requisition forms to broaden their apparent authorization.

    The laboratory allegedly froze thousands of specimens for weeks or months before testing them, producing results too late to guide treatment or infection-control decisions.

    The case provides a glimpse into how qui tam enforcement under the Trump administration has evolved, specifically in the Northern District of Texas.

    This settlement also offers a roadmap for Find Corporate Waste projects: follow the money beyond the entity that submitted the claims to the owners, affiliates and investors who ultimately received the proceeds.

    Public records showing where taxpayer funds flowed may expose recovery targets beyond those which can be indexed from public records, even when the recipients never billed the government directly.

  • SSM Health Pays Nearly $1M After Pharmacy Copay Waiver Allegations

    SSM Health Pays Nearly $1M After Pharmacy Copay Waiver Allegations

    This case is an example of how the Trump Administration’s Department of Justice is clawing back billions of taxpayer dollars from fraud schemes throughout the country.

    The United States has reached a $939,290 civil settlement⁠ with SSM Health Care over allegations that the retail pharmacy at Saint Louis University Hospital routinely waived patient copays, causing Medicare and the Federal Employees Health Benefits Program to overpay for prescriptions.  

    DOJ says the conduct ran from September 2020 through February 2023, with pharmacy employees allegedly waiving or failing to collect copays. That is not a harmless discount. Routine copay waivers can steer patients to one pharmacy, hide the real prescription cost, and inflate what federal programs pay.

    The case began with a qui tam whistleblower suit filed under the False Claims Act. The whistleblower will receive $159,210, while SSM will also pay $150,000 in fees and costs. SSM did not admit liability and DOJ credited the company’s cooperation and remedial action.  

    For FCW, the takeaway is direct: when providers manipulate the economics behind federally reimbursed claims, the taxpayer is left holding the bill. Copays are not paperwork. They are part of the program-integrity firewall.

  • North Carolina Tax Preparers Turned Pandemic Relief Into a $14M Fraud Scheme

    North Carolina Tax Preparers Turned Pandemic Relief Into a $14M Fraud Scheme

    The latest pandemic-relief fraud case out of North Carolina is a story about tax preparers who abused their gatekeeping role, converted federal relief into a refund machine, and helped drain money from programs Congress created for people and businesses in legitimate distress.

    According to the Department of Justice⁠, the preparers used false tax returns to claim fraudulent COVID-era paid sick and family leave credits. The conspiracy allegedly ran from approximately April 2022 through May 2023 and involved refund claims tied to relief provisions meant for legitimate businesses.

    DOJ says Nejlai Mitchell, owner of a tax preparation business operating in Lumberton and Hope Mills, pleaded guilty to conspiracy and assisting in the preparation of false returns. Seven other preparers also pleaded guilty for their roles in the scheme.

    For FCW, this case reinforces why pandemic-relief enforcement cannot stop at PPP or Provider Relief Fund reviews. Relief fraud moved through tax credits, refund claims, payroll representations, and professional intermediaries.

    Operation Clawback is built around that same premise: COVID-era funds must be screened against eligibility rules, exclusion indicators, and public-record red flags.  

  • Brooklyn Adult Day Care Operators Accused in $38M Medicaid Kickback and False-Billing Scheme

    Brooklyn Adult Day Care Operators Accused in $38M Medicaid Kickback and False-Billing Scheme

    Federal prosecutors have charged eight defendants in an alleged $38 million Medicaid fraud scheme involving two Brooklyn social adult day care centers: APNA Adult Daycare and Ashiana Social Adult Daycare, according to the New York Post⁠.

    The reported indictment alleges that Medicaid recipients were paid cash kickbacks to enroll, recruiters were paid to bring in beneficiaries, and the centers then billed New York Medicaid for services that were not actually provided. Prosecutors also reportedly allege fake sign-in sheets, Pakistan-based billing support, and shell-company transfers labeled as “gifts,” “dividends,” “medicine,” or “laddu.”

    For Find Corporate Waste, the relevance is the public-funds mechanism: Medicaid claims allegedly tied to false attendance, kickback-driven enrollment, and non-rendered services.

    That is the same fraud structure FCW tracks across taxpayer-funded health care programs, including provider eligibility, billing integrity, ownership/control relationships, and public-payment exposure.

    The case also fits a broader enforcement pattern. DOJ previously announced guilty pleas in a $68 million Brooklyn adult day care fraud scheme⁠ and charged two Queens men in an alleged $120 million adult day care and pharmacy fraud scheme⁠. 

  • Alabama Defense Contractor Pays $507K to Resolve False Claims Act Cybersecurity Allegations

    Alabama Defense Contractor Pays $507K to Resolve False Claims Act Cybersecurity Allegations

    The Department of Justice announced that LOGZONE Inc. agreed to pay $507,144⁠ to resolve False Claims Act liability related to alleged cybersecurity noncompliance on Department of the Navy contracts.

    LOGZONE, a Huntsville, Alabama defense contractor, provided logistical, inventory, and facilities support services for the Naval Oceanographic Command Property Management Program at Stennis Space Center in Mississippi.

    According to DOJ, the Navy contracts required LOGZONE to comply with cybersecurity obligations under DFARS contract clauses, including requirements tied to NIST SP 800-171⁠, which governs protection of controlled unclassified information in nonfederal systems.

    The government alleged that LOGZONE submitted claims for payment while failing to fully implement required cybersecurity controls.

    The DOJ also alleged that LOGZONE submitted a perfect cybersecurity self-assessment score of 110 in October 2021, but a later government assessment in February 2024 produced a score of -170.

    The settlement agreement states that the covered conduct occurred from May 5, 2021, through March 8, 2025. The $507,144 settlement includes $253,572 in restitution.

    This case reflects DOJ’s continued use of the False Claims Act⁠ to pursue government contractors that allegedly seek federal payment while failing to meet material contract requirements.

  • Aquatherm Pays $1.35M Over PPP Eligibility Allegations

    Aquatherm Pays $1.35M Over PPP Eligibility Allegations

    Aquatherm, L.P.⁠ agreed to pay $1,351,575.84 to resolve False Claims Act⁠ allegations that it improperly obtained a Paycheck Protection Program⁠ loan for which it was not eligible, according to the U.S. Attorney’s Office for the District of Delaware⁠.

    DOJ said Aquatherm received an $864,982 PPP loan in March 2021 after certifying that it and its affiliates had fewer than 300 employees. Under the applicable PPP rule, that employee count included domestic and foreign affiliates.

    According to DOJ, Aquatherm is 99% owned by Aquatherm Besitzgesellschaft mbH & Co. KG, a German company. The government alleged that Aquatherm exceeded the 300-employee limit when its domestic and foreign affiliates were included, making it ineligible for the loan. Aquatherm later received full forgiveness from the SBA.

    The settlement also resolved claims brought under the qui tam⁠ provisions of the False Claims Act. DOJ said the whistleblower will receive a share of the recovery.

    The case highlights a recurring PPP enforcement issue: affiliate headcount. For public-record screening, foreign ownership, control, affiliated entities, employee count, and forgiveness records can all create eligibility questions requiring verification.

  • Arkansas Lab and Owners Pay $30M Over Alleged Kickback-Fueled Testing Scheme

    Arkansas Lab and Owners Pay $30M Over Alleged Kickback-Fueled Testing Scheme

    An Arkansas pathology lab and its owners agreed to pay $30 million to resolve federal allegations that their business model turned physician referrals and add-on testing into a taxpayer-funded billing pipeline.

    The settlement covers Advanced Pathology Solutions PLLC, APS MSO LLC, and current and former owners Kevin Hannah, Donell Burkett, and Daniel Hunter Pledger⁠. According to the Justice Department, APS operated “lean labs” with gastroenterology practices across the country and allegedly provided financial benefits to those practices in exchange for exclusive referrals of pathology specimens to APS’s North Little Rock laboratory.

    Federal prosecutors also alleged APS caused special stains and confirmatory testing to be ordered automatically before a pathologist determined whether the tests were medically necessary.

    In essence, the government alleged extra testing was built into the process first, while medical necessity came second.

    The settlement also resolves claims that APS and CEO Kevin Hannah paid volume-based commissions to Richard Sorgnard⁠ to induce referrals for epidermal nerve fiber density testing. The United States contended the commissions equaled 4% of collections from referred ENFD testing.

    The case originated from three whistleblower lawsuits filed under the False Claims Act⁠. As part of the resolution, APS entered into a five-year Corporate Integrity Agreement with HHS-OIG⁠ requiring compliance reforms, training, auditing, and review of physician referral relationships.

    For Find Corporate Waste⁠, the settlement shows how federal health care fraud can hide inside ordinary-looking referral networks, lab protocols, and billing defaults. When financial incentives shape where specimens go and testing is added before necessity is established, taxpayers are left paying for a system designed around revenue rather than care.

  • Seven Men Arrested in $205K COVID Relief Fraud Case

    Seven Men Arrested in $205K COVID Relief Fraud Case

    Federal prosecutors announced that seven Las Vegas men have been arrested and indicted in connection with allegedly fraudulent COVID-19 relief loan applications.

    According to the U.S. Attorney’s Office for the District of Nevada⁠, the defendants are accused of submitting false information and fake documentation to obtain funds through the Small Business Administration’s Paycheck Protection Program and Economic Injury Disaster Loan program. The alleged fraudulent proceeds totaled $205,639.

    The defendants named by DOJ are Elias Santino Acereto, Sheyland Juakeen Barnett, James Sean Freeman II, Yves Garry Harrison-Pierre, Tyrone Tatrice Johnson, Marcus Dushun McMillian-Bonner, and Nathan Jeffry Scott. Six defendants were charged with one count of wire fraud, while Freeman was charged with two counts.

    The SBA Office of Inspector General⁠ said the arrests followed coordinated law enforcement actions in Nevada, Arizona, and Texas involving the FBI, SBA-OIG, Las Vegas Metropolitan Police Department, and North Las Vegas Police Department.

    For Find Corporate Waste⁠, the case is another reminder that COVID-era relief enforcement remains active. Even smaller-dollar PPP and EIDL cases can expose broader weaknesses in application screening, identity verification, and post-payment review.

  • Utah Men Charged in Alleged $5.5M IRS and SBA COVID-Relief Fraud Scheme

    Utah Men Charged in Alleged $5.5M IRS and SBA COVID-Relief Fraud Scheme

    Federal prosecutors have charged two Provo, Utah men in an alleged scheme to defraud the IRS and the Small Business Administration out of more than $5.5 million tied to COVID-era relief programs.

    According to the SBA Office of Inspector General⁠, David Starling, 61, and Benjamin Young, 39, were charged with conspiring to defraud the United States. Young was also charged with twelve counts of wire fraud. A third defendant, Adam Starling of Oregon, previously pleaded guilty.

    The government alleges the defendants owned or controlled eight companies and falsely listed family members — including spouses and children — as employees. Prosecutors say they created false tax documents reporting more than $4 million in wages, then used those documents to obtain COVID-relief benefits.

    The alleged proceeds included $3 million in tax credits and $200,000 in Paycheck Protection Program loans, which were later forgiven based on alleged false statements.

    The case also includes a separate SBA-backed loan angle. Prosecutors allege Young used fraud proceeds and embezzled funds to buy commercial space in Provo, then relied on fabricated documents to obtain a $2.5 million SBA-secured bank loan.

    For Find Corporate Waste⁠, this case is another reminder that COVID-relief enforcement is not just about the original loan. It is about payroll records, forgiveness certifications, tax filings, affiliated entities, and the paper trail behind taxpayer-backed money.