HEALTHCARE FRAUD

HCA Inc. - $631 million under the False Claims Act
In 2003, HCA Inc. (formerly known as Columbia/HCA and HCA)– The Healthcare Company) paid $631 million to settle allegations of cost report fraud, the payment of kickbacks to physicians and overbilling Medicare for HCA’s wound care centers. The company previously paid $731.4 million in a 2000 a civil settlement and criminal guilty plea. Total settlements paid by HCA under the False Claims Act currently amount to $1.7 billion.

Tenet Healthcare - $22.5 million under the False Claims Act
In March 2004, Tenet Healthcare Corporation agreed to pay $22.5 million to resolve allegations that one of its facilities improperly billed Medicare for millions of dollars for referrals provided by doctors with whom the hospital had prohibited financial arrangements. At that time the settlement was the largest False Claims Act recovery the government had obtained from a single hospital arising out of alleged violations.

Schering-Plough - $345 million under the False Claims Act
In July 2004, Schering Sales Corp., the sales and marketing subsidiary of drug manufacturer Schering-Plough, agreed to pay $52.5 million, while Schering-Plough Corporation agreed to pay more than $290 million to resolve allegations stemming from its fraudulent pricing of Claritin, its blockbuster allergy medication. The charges alleged that the company paid a health maintenance organization (HMO) a kickback of $1.8 million to induce the HMO to keep Claritin on its list of drugs that were covered for its beneficiaries. The suit also charged that Schering-Plough overcharged Medicaid by failing to report its true best price for Claritin.

Gambro Healthcare - $350 million under the False Claims Act
In December 2004, Gambro Healthcare agreed to pay more than $350 million to settle allegations of healthcare fraud in the Medicare, Medicaid and TriCare programs. As part of the global resolution, Gambro Supply Corporation, a sham durable medical equipment company and a wholly owned subsidiary of Gambro Healthcare, admitted to executing a healthcare fraud scheme and agreed to plead guilty to criminal felony charges, pay a $25 million fine and be permanently excluded from the Medicare program. Gambro Healthcare also agreed to pay in excess of $310 million to resolve allegations that it paid kickbacks to physicians and made false statements to procure payment for unnecessary tests and services.

DEFENSE FRAUD

SAIC (Science Applications International Corp) - $2.5 million under the False Claims Act
In April 2005, SAIC agreed to pay $2.5 million to settle allegations that it made false claims and engaged in defective pricing on delivery orders with the Air Force for environmental clean up at Kelly Air Force Base in San Antonio, Texas. The complaint alleged that SAIC knowingly failed to disclose information about its costs during price negotiations with the Air Force, as required by the federal Truth in Negotiations Act. The lawsuit alleged that SAIC utilized hidden management reserves to inflate its estimates of the amount of labor hours it would require to complete the delivery orders, but never told the Air Force about the reserves or the padded hours. Under federal law, a company bidding for a government contract must disclose if it is increasing its cost estimates in its formal bid based upon the possibility of cost overruns due to unforeseen circumstances. It cannot give the government the impression that speculative costs are certain costs, and thus falsely tell the government that its profit margin on a contract is, for example 10% when it fact it is 40%

Lockheed Martin - $37.9 million under the False Claims Act
In August 2003, Lockheed Martin Corporation agreed to pay $37,900,000 to resolve allegations that it inflated the cost of performing several Air Force contracts. The suit alleged that the company deliberately inflated the cost of contracts for the purchase of navigation and targeting pods for military jets.

Northrop Grumman Space & Mission Systems Corporation - $111 million under the False Claims Act
In June 2003, Northrop Grumman Space & Mission Systems Corporation (NGSMS), the successor to TRW Inc., agreed to pay $111.2 million for allegedly overcharging on government contracts. The suit alleged that between 1990 and 1997, TRW employees engaged in five separate schemes that increased the costs the government paid the aerospace contractor.

OTHER TYPES OF FRAUD

Shell Oil - $49 million under the False Claims Act
In August 2003, Shell Oil Company agreed to pay $49 million to resolve allegations that the energy company improperly vented and flared gas from various offshore federal leases and failed to property report, or pay royalties on, the vented and flared gas. Regulations issued by the Department of the Interior prohibit unauthorized venting and flaring of gas in excess of small volumes that are not economical to recover. The lawsuit charged that Shell vented and flared for extended periods large volumes of gas at its Auger platform, located about 150 miles off the coast of Louisiana, and other facilities in the Gulf of Mexico.

OfficeMax, Inc. - $9.8 million under the False Claims Act
In May 2005, OfficeMax agreed to pay $9.8 million to settle allegations that it submitted false claims when it sold office supply products manufactured in countries not permitted by the Trade Agreements Act to U.S. government agencies. The settlement resolves allegations that OfficeMax sold products from countries that do not have reciprocal trade agreements with the U.S. OfficeMax was required by its contract with the General Services Administration (GSA) to prevent such items from being offered for sale to U.S. government agencies.

The Mayo Foundation - $6.5 million under the False Claims Act
In May 2005, The Mayo Foundation, the parent organization of the Mayo Clinic, paid $6.5 million to resolve allegations that it charged the government under federal grants for research costs unrelated to the research projects sponsored by those grants. The Foundation receives hundreds of grants each year from the National Institutes of Health (NIH) and other government agencies, each grant covering a distinct research project. The Mayo Foundation may charge the government only for costs related to the specific research covered by the grant. The settlement resolves allegations that Mayo wrongly charged the government by including on underspent grants research costs incurred on overspent grants and internal Mayo cost centers. As a result, the Foundation was paid more under the grants than they were entitled to receive.

Turner Construction Company - $6.6 million under the False Claims Act
In June 2005, Turner Construction Company paid $6.6 million to settle allegations that it received credits for bonds on dozens of federal contracts without passing the credits along to the federal government. The contracts in question include one for the construction of the VA’s Boston Medical Center in Massachusetts, one with the GSA for the construction of a courthouse in Islip, New York, numerous Navy contracts, and several other construction contracts or subcontracts with these and other agencies.

Humanscale Corporation - $9 million under the False Claims Act
In June 2005, Humanscale Corporation (formerly Softview Computer Products) agreed to pay $9 million to resolve allegations that they overcharged the government on furniture and office products. The government alleged that the firm failed to disclose current, accurate and complete discount and pricing information to the General Services Administration (GSA) contract negotiators and failed to comply with the price reduction clauses for three of its GSA Multiple Award Schedule contracts, resulting in the overcharging of the government.

PriceWaterhouseCoopers, LLP - $41.9 million under the False Claims Act
In July 2005, PriceWaterhouseCoopers, LLP (PWC) agreed to pay $41.9 million to settle allegations in connection with claims it made to federal agencies for travel reimbursement. PWC received rebates on its travel expenses from travel and credit card companies, airlines, hotels, rental car agencies and travel service providers. The allegations charged that the company did not consistently disclose the existence of travel rebates and did not reduce its travel reimbursement claims by the amounts of the rebates and knowingly presented claims for payment for amounts greater than the travel expenses actually incurred and in violation of contractual provisions and the applicable provisions of the Federal Acquisition Regulations. (recast previous sentence)

Electrolux - $700,000 under the False Claims Act
In October 2002, Electrolux Home Products agreed to pay $687,781.77 to settle claims that it defrauded the U.S. Customs Service by failing to declare the value of certain tooling molds, assembly labels and parts that it provided to overseas manufacturers on entry summaries it filed with the Customs Service.

Intertek Testing Services Environmental Laboratories – nearly $9 million under the False Claims Act
In March 2002, Intertek agreed to pay $8.7 million to resolve allegations that the firm did not carry out certain tests pursuant to contractual requirements with the government. Intertek’s now-defunct Richardson, Texas laboratory tested air, liquid and soil samples for hazardous substances. The government’s claims against the company were made on behalf of the Army Corps of Engineers, Department of the Air Force, Department of the Navy and the Environmental Protection Agency (EPA).