November 27, 2022

Volume XII, Number 331

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COVID-19 Fraud Update: DOJ Prosecutes More than 150 Defendants, 95 Criminal Cases

COVID-19 Fraud Update: DOJ Prosecutes More than 150 Defendants, 95 Criminal Cases 

Since the inception of the CARES Act, DOJ’s Fraud Section has prosecuted over 150 defendants in over 95 criminal cases. The Fraud Section has also seized over $75 million in cash along with numerous luxury items and real estate properties purchased with fraudulently obtained PPP proceeds.

A federal jury in Atlanta, Georgia, convicted a South Carolina man of conspiracy to commit bank fraud, making a false statement to a bank, and money laundering. According to DOJ’s press release, the man fraudulently obtained a $300,000 PPP loan under the CARES Act by falsely inflating the number of employees and average monthly payroll expenses on his loan application, which led to him receiving a larger PPP loan than he was legitimately eligible for. 

The man, along with a co-conspirator, then submitted a forged tax document to support the false statements and engaged in a series of sham transactions to make it appear as though he was paying employees, who, in reality, were returning most of the money to him. He is the 11th defendant convicted in this $3 million Atlanta-based PPP fraud ring; all other defendants pled guilty before trial.  

A former IRS employee recently pled guilty to fraudulently obtaining $62,300 in CARES Act Funds. 

The former IRS employee was alleged to have fraudulently applied for a loan under the Economic Injury Disaster Loan (EIDL) program by falsely claiming to be an independent contractor in the “Hair & Nail Salon” industry, even though at the time he was a full-time IRS employee. As a result of this false statement, he obtained $62,300 and used that money to renovate an investment property he owned. Read the DOJ’s press release here.

Biogen Inc. Settles False Claims Act Allegations for $900 Million 

Pharmaceutical company, Biogen Inc., agreed to pay approximately $900 million to settle allegations that it violated the False Claims Act (FCA) by causing the submission of false claims to Medicare and Medicaid.  

A former Biogen employee filed a lawsuit against Biogen under the whistleblower provisions of the FCA, alleging that Biogen paid kickbacks to physicians in order to induce them to prescribe Biogen’s drugs for multiple sclerosis, including Avonex, Tysabri, and Tecfidera. According to the complaint, Biogen paid health care professionals who spoke at or attended Biogen’s speaker programs, speaker trainings, and consultant programs. 

These professionals allegedly received speaker honoraria, speaker training fees, consulting fees, and meals to induce them to prescribe Biogen’s drugs.

Read the DOJ’s press release here.

Washington Doctor Pleads Guilty for Accepting Kickbacks in Scheme that Targeted the Elderly 

A Renton, Washington doctor pled guilty to conspiring to accept kickbacks in connection with an alleged fraudulent genetic testing scheme. According to DOJ’s press release, telemarketers connected the doctor to Medicare beneficiaries on the telephone, and the doctor then placed genetic testing orders for these Medicare beneficiaries whom he was not treating and with whom he had no physician-patient relationship. The laboratories then billed Medicare for the genetic tests, while another company billed Medicare for the alleged “telemedicine” visit. From December 2020 to September 2021, the doctor received $167,996 in kickbacks for ordering medically unnecessary genetic testing and other services.

Read the DOJ’s press release here.

© 2022 ArentFox Schiff LLPNational Law Review, Volume XII, Number 273
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About this Author

D. Jacques Smith Attorney Litigation ArentFox Schiff Washington DC
Partner and Complex Litigation Practice Co-Leader

Jacques focuses his practice on government investigations and enforcement. Recognized as one of the top False Claims Act practitioners in the country, his clients largely encompass all branches of health care and life sciences. He has more than 30 years of experience handling jury, bench, and administrative trials in a variety of civil and criminal cases in state and federal courts throughout the country. Jacques excels at handling complex commercial disputes and internal investigations and responding to government inquiries. 

Jacques is...

202-857-6154
Randall A. Brater Litigation Attorney ArentFox Schiff Washington DC
Partner

Randy routinely litigates high-stakes matters in state and federal courts, including preliminary injunctions, motions practice, jury and bench trials, arbitrations, and mediation.

Randy often handles matters related to investigations and the False Claims Act, municipal bond finance, and trademark litigation. Randy also has represented agricultural chemical manufacturers in numerous data compensation disputes arising under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), environmental actions under CERCLA, employment, trade secret...

202-715-8472
Mohammed T. Farooqui ArentFoxSchiff
Associate

Mohammed has conducted internal and external investigations to assess compliance with federal and state laws, advised companies on adopting strategies to ensure compliance with anti-bribery and anti-corruption laws and regulations, and defended companies and individuals in actions brought by the DOJ and SEC. 

His experience includes leading a team of ArentFox Schiff attorneys tasked with reviewing the practices and procedures of one of the largest law enforcement agencies in the United States. Mohammed's regulatory enforcement experience...

212-457-5428
Laura Zell Associate ArentFox Schiff LLP
Associate

Laura specializes in intellectual property litigation, with a focus on trademark, trade dress, and copyright infringement, and complex litigation, as well as white collar defense and internal and government investigations. Laura has served as the lead associate at trademark and white collar trials in federal court, providing her with significant experience in all phases of litigation, ranging from discovery, motions practice, and witness preparation to direct and cross-examinations and post-trial motions.  

Intellectual Property...

202-857-6032
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