DOJ Announces Settlements in False Claims Cases

The U.S. Department of Justice has announced two significant settlements this week, highlighting its ongoing efforts to combat fraud in both COVID-19 relief programs and healthcare services.

Hemisphere GNSS (USA) Inc., an Arizona-based GPS manufacturer, has agreed to pay $2.6 million to settle allegations of violating the False Claims Act. The company, acquired by CNH Industrial in 2023, is accused of knowingly providing false information to obtain and receive forgiveness for a Paycheck Protection Program (PPP) loan for which it was not eligible.

The settlement, announced on Wednesday, July 17, 2024, stems from Hemisphere's application for a second-round PPP loan in February 2021. The company allegedly made false certifications regarding its ownership and board membership, specifically misrepresenting its ties to China.

Principal Deputy Assistant Attorney General Brian M. Boynton emphasized the importance of preserving PPP funds for eligible businesses, stating, "When ineligible entities improperly sought PPP loans or forgiveness of those loans, they reduced the availability of this critical support for eligible businesses."

Kindred Healthcare Affiliates to Pay $19.428 Million in Hospice Fraud Case

In a separate case, Gentiva, the successor to Kindred at Home, has agreed to pay $19.428 million to resolve allegations of submitting false claims and retaining overpayments for hospice services provided to ineligible patients. This settlement addresses accusations against Kindred at Home and related entities across multiple states.

The case involves hospice services provided to patients ineligible for benefits under various federal health care programs, including Medicare and Medicaid. The settlement resolves claims made by the United States and the State of Tennessee in a 2021 consolidated complaint against certain Kindred-related entities.

The allegations span multiple hospice locations operating under the names Avalon, Kindred, SouthernCare, and SouthernCare New Beacon in several states, including Tennessee, Rhode Island, Texas, Missouri, Alabama, Indiana, and Ohio.

Additionally, the settlement resolves allegations that SouthernCare New Beacon violated the Anti-Kickback Statute by paying a consulting physician to induce hospice referrals of Medicare beneficiaries to its Gadsden, Alabama location.

U.S. Attorney Henry C. Leventis for the Middle District of Tennessee stated, "We are committed to holding accountable health care companies and providers who prioritize profits over patient care by ignoring these requirements."

Both Settlements Highlight Ongoing Fraud Enforcement Efforts

These settlements underscore the Department of Justice's continued commitment to combating fraud in federal programs. The Hemisphere GNSS case is part of the broader efforts of the COVID-19 Fraud Enforcement Task Force, established in May 2021. The Kindred Healthcare case demonstrates the government's focus on ensuring the integrity of healthcare programs, particularly in hospice care.

Both cases were brought to light through whistleblower lawsuits filed under the qui tam provisions of the False Claims Act, highlighting the importance of insider information in uncovering fraud against government programs.

As these settlements demonstrate, the Justice Department remains vigilant in its efforts to protect taxpayer dollars and ensure that federal funds are used appropriately, whether in pandemic relief or healthcare services.

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