Find Corporate Waste

Tag: False Claims Act

  • Mount Sinai Reaches DOJ Agreement Amid False Claims Act Investigation

    Logo of Mount Sinai Hospital featuring stylized mountain graphics in blue and pink, with the text 'Mount Sinai Hospital' to the right.

    Mount Sinai Health System has reached an agreement with the Justice Department resolving a federal investigation into its provision of gender-transition procedures to minors.

    Under the agreement, Mount Sinai will stop providing puberty blockers, cross-sex hormones and surgical procedures to minors.

    The health system will also pay a monetary penalty and dedicate $2 million to free medical care for individuals who report harmful consequences from gender-transition treatment received as children.

    The agreement stems from a nationwide Justice Department investigation that includes potential violations of the False Claims Act and federal health care laws.

    According to the Justice Department, investigators are examining whether providers used false diagnosis codes or other billing practices to obtain reimbursement from federal health programs and private insurers for pediatric gender-transition procedures.

    The investigation follows a January 2025 executive order directing federal agencies to take enforcement action concerning pediatric gender-transition procedures, including fraud investigations.

    Mount Sinai has allegedly ‘cooperated’ with the investigation.

    For Find Corporate Waste, the development signals another emerging area of federal health care enforcement where billing records, diagnosis coding, and federal reimbursement may become central to future False Claims Act investigations and whistleblower cases.

  • Complete Health Pays $14.1M Over Inflated Medicare Advantage Diagnoses

    Complete Health Pays $14.1M Over Inflated Medicare Advantage Diagnoses

    Complete Health Partners Holdings will pay $14.1 million to settle allegations that it used unsupported patient diagnoses to increase Medicare Advantage payments.

    The Jacksonville, Florida-based company manages and operates affiliated medical groups in Florida, Alabama and Colorado.

    Under its contracts with Medicare Advantage insurers, Complete Health received a percentage of the payments those insurers collected from the Centers for Medicare & Medicaid Services. Because CMS pays more for patients coded as having serious medical conditions, Complete Health stood to profit when patient risk scores increased.

    According to the Justice Department⁠, Complete Health submitted unsupported diagnoses between 2020 and 2023 involving drug and alcohol dependence, major depression, bipolar disorder and paranoid disorders.

    Federal officials alleged that the company distributed incorrect coding guidance, searched medical records for additional diagnoses and prompted physicians to add conditions that were not clinically justified or properly supported.

    Those diagnoses increased payments from CMS to Medicare Advantage insurers. The insurers then passed part of the additional money to Complete Health.

    The case was brought under the False Claims Act by Karen Bowers, a former associate director of risk adjustment at VIVA Health. Bowers will receive approximately $2.47 million from the federal recovery.

    The settlement shows why insiders remain critical to exposing Medicare Advantage fraud. Employees who understand coding guidance, physician prompts, risk-adjustment reviews and payment arrangements may be able to identify when patient conditions are being exaggerated to extract more taxpayer money.

  • Boston Eye Practice to Pay $3.9M Over Unsupported Medicare Billing

    Boston Eye Practice to Pay $3.9M Over Unsupported Medicare Billing

    Ophthalmic Consultants of Boston, Inc. has agreed to pay $3.9 million to resolve allegations that it improperly billed Medicare and MassHealth for office visits performed alongside eye injections.

    According to the Justice Department⁠, OCB submitted the claims between January 2015 and July 2025. Federal and state billing rules generally prohibit providers from separately charging for an office visit when it is conducted as part of an intravitreal injection appointment, except under limited circumstances.

    Prosecutors alleged that OCB used Modifier 25 to bill for additional office visits without documentation establishing that the services were separately identifiable and medically necessary.

    The settlement credits OCB for cooperating with the government’s investigation. It resolves allegations and does not constitute a determination of liability.

    The case began with a sealed whistleblower lawsuit filed under the False Claims Act. The unidentified relator will receive an undisclosed portion of the recovery.

    The settlement demonstrates how unsupported billing modifiers can turn routine coding practices into substantial taxpayer losses. For healthcare insiders, recurring use of Modifier 25 without matching clinical documentation may provide the evidence needed to expose systematic overbilling.

  • 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.