Civil Division

Armstrong Group Agrees to Pay $6.5M to Settle False Claims Act Allegations Relating to Subsidies Under the Federal Communications Commission’s High-Cost Program Butler, Pennsylvania, based Armstrong Group has agreed to pay $6.5 million to resolve allegations that it violated the False Claims Act by knowingly violating the Federal Communications Commission’s (FCC) rules governing the agency’s High-Cost Program and submitting improper costs in order to inflate the subsidies it received from the federal Universal Service Fund (USF). The FCC established the USF to help ensure that all people in the United States have access to rapid, efficient, nationwide communications service with adequate facilities at reasonable charges. The High-Cost Program is one of four programs that comprise the USF and aims to ensure that consumers in rural, insular, and high-cost areas have access to modern communications networks capable of providing reasonably comparable voice and broadband service, both fixed and mobile, at rates that are reasonably comparable to those in urban areas. In pursuit of that goal, the High-Cost Program provides federal funds to qualified eligible telecommunications carriers, including incumbent local exchange carriers (ILECs), that receive subsidies to expand connectivity infrastructure within the United States. Read more: https://lnkd.in/gbSfxCZK

The Grand Health Care System and 12 Affiliated Skilled Nursing Facilities to Pay $21.3M for Allegedly Providing and Billing for Fraudulent Rehabilitation Therapy Services Company Admits that Supervisory Officials Falsified Information in Medical Records Strauss Ventures LLC, doing business as The Grand Health Care System, and 12 affiliated skilled nursing facilities (collectively, the Grand) have agreed to resolve allegations that they violated the False Claims Act by knowingly billing federal health care programs for therapy services that were unreasonable, unnecessary, unskilled or that simply did not occur as billed. “We expect nursing facilities to provide only reasonable and appropriate amounts of skilled rehabilitation therapy service to their residents and to bill government healthcare programs only for the services actually provided,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department's Civil Division. “The department is committed to protecting both vulnerable nursing home patients and taxpayers against fraudulent conduct by unscrupulous actors.” Read more: https://lnkd.in/gFyj6FQP

Rite Aid Corporation and Elixir Insurance Company Agree to Pay $101M to Resolve Allegations of Falsely Reporting Rebates The Justice Department announced today that Rite Aid Corporation and Rite Aid subsidiaries, Elixir Insurance Company, RX Options LLC and RX Solutions LLC, have agreed to resolve allegations that they violated the False Claims Act (FCA) by failing to accurately report drug rebates to the Medicare Program. As part of the settlement, Elixir Insurance and Rite Aid will pay the United States $101 million, and RX Options and RX Solutions will grant the United States an allowed, unsubordinated, general unsecured claim for a total of $20 million in Rite Aid’s bankruptcy case pending in the District of New Jersey. The settlement is based on the companies’ ability to pay and was approved on June 28 by the bankruptcy court as part of Rite Aid’s plan of reorganization, which is expected to become effective later this summer. In addition to operating one of the country’s largest retail pharmacy chains, Rite Aid offered Medicare drug plans and pharmacy benefits manager (PBM) services through Elixir Insurance, RX Options and RX Solutions. “Participants in Medicare’s drug program must accurately report price concessions, including drug manufacturer rebates, to ensure that the government receives the benefit of those concessions,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement reflects the Justice Department’s commitment to hold accountable entities that pursue their own financial interests at the expense of taxpayer programs.” Read more: https://lnkd.in/g7HyxdSG

Rite Aid Corporation and Affiliates Agree to Settle False Claims Act and Controlled Substance Act Allegations Related to Opioid Dispensing The Justice Department today announced that Rite Aid Corporation (Rite Aid) and 10 subsidiaries and affiliates have agreed to settle the government’s allegations under the False Claims Act (FCA) and Controlled Substances Act (CSA) asserted in United States ex rel. White et al. v. Rite Aid Corp., et al., No. 1:21-cv-1239 (N.D. Ohio). Under the settlement, the government will be paid $7.5 million and have an allowed, unsubordinated, general unsecured claim of $401.8 million in Rite Aid’s bankruptcy case that is pending in the District of New Jersey. During the relevant time period, Rite Aid operated one of the country’s largest retail pharmacy chains with over 2,200 retail pharmacies in 17 states. “Filling unnecessary prescriptions for powerful and addictive opioids, as the government alleged here, not only takes a toll on our communities, but also violates the law,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As today’s settlement illustrates, the Justice Department is committed to holding pharmacies accountable for their role in the nation’s opioid crisis.” Read more: https://lnkd.in/gr4Wsr_w

Court Enjoins Louisiana Company and its Owners from Distributing Adulterated Food On July 2, a federal court enjoined a Louisiana company from manufacturing and distributing adulterated food products in violation of the Federal Food, Drug and Cosmetic Act (FDCA). In a civil complaint filed on June 10, the United States alleged that Freshy Foods, LLC, Team Fresh & Go, LLC and its owners, Floyd D. James and Ida M. James, violated the FDCA at their food processing facility in Elmwood, Louisiana by manufacturing and distributing adulterated food products. The defendants manufactured and distributed ready-to-eat food products, including sandwiches and fruit cups. The complaint alleged that environmental tests in 2023 detected Listeria monocytogenes (L. mono), the pathogen that can cause listeriosis, in the defendants’ facility. The complaint also alleged that a 2023 U.S. Food and Drug Administration (FDA) inspection identified insanitary conditions at the facility. According to the complaint, the defendants voluntarily withdrew their registration to process FDA-regulated food in August 2023. “Food manufacturers must ensure the safety of their food products,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department works closely with the FDA to pursue appropriate legal actions against food manufacturers who fail to adhere to laws designed to protect public health.” Read more: https://lnkd.in/gdMBf6zU

OptumRx Agrees to Pay $20M to Resolve Allegations that It Filled Certain Opioid Prescriptions in Violation of the Controlled Substances Act OptumRx Inc., a prescription drug benefit provider, has agreed to pay $20 million to resolve allegations that it improperly filled certain opioid prescriptions in violation of the Controlled Substances Act. The settlement resolves an investigation initiated by the Drug Enforcement Administration (DEA) into whether, between April 2013 and April 2015, OptumRx improperly filled certain opioid prescriptions in combination with other drugs such as benzodiazepines and muscle relaxants, commonly referred to as “trinity” prescriptions. The United States alleged that these combination prescriptions, which OptumRx filled primarily from a mail order pharmacy location in Carlsbad, California, raised “red flags” indicating that the prescriptions may not have been intended for legitimate medical use and could lead to abuse or diversion of highly addictive and powerful opioids. The United States also contended that these trinity prescriptions carry significant risk of harm and that these red flags must be resolved prior to filling a controlled substance prescription. During the course of its investigation, the government alleged that OptumRx received numerous trinity prescriptions that raised red flags but filled those prescriptions without always resolving the red flags. Read more: https://lnkd.in/gXAS4vFf

Seventeen Federal Agencies Recognize Decade of Federal Progress Addressing Elder Abuse At a meeting of the Elder Justice Coordinating Council (EJCC) on Wednesday, June 12, 17 federal agencies including the Justice Department and the Department of Health and Human Services (HHS) will look back on a decade in which the federal government has significantly expanded efforts to combat elder abuse, neglect, and exploitation — including in the areas of enforcement, public education, training, interagency collaboration, research, and support for older adults who experience or are at risk of experiencing abuse. “We know that the vast majority of elder abuse cases go unreported. And that too many victims remain unseen,” said Attorney General Merrick B. Garland. “That is why the Department of Justice has aggressively targeted perpetrators of elder fraud and abuse, while providing victims with the support they need. In the last five years, the Department has pursued more than 1,500 criminal and civil cases involving conduct that targeted or disproportionately affected older adults. We have provided services to more than 1.5 million older victims. And we have returned hundreds of millions of dollars to elder fraud victims. The Elder Justice Coordinating Council has played a key role in our work.” Read more: https://lnkd.in/g7zHE_KW

Justice Department and FDA Announce Federal Multi-Agency Task Force to Curb Distribution and Sale of Illegal E-Cigarettes The Justice Department and U.S. Food and Drug Administration (FDA) today announced the creation of a federal multi-agency task force to combat the illegal distribution and sale of e-cigarettes. Along with the FDA and the Justice Department, the task force will bring together multiple law enforcement partners, including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); U.S. Marshals Service (USMS); U.S. Postal Inspection Service (USPIS); and Federal Trade Commission (FTC) to coordinate and streamline efforts to bring all available criminal and civil tools to bear against the illegal distribution, and sale of e-cigarettes, vapes, and other electronic nicotine delivery system (ENDS) responsible for nicotine addiction among American youth. Additional agencies may join the task force in the coming weeks and months. Read more: https://lnkd.in/gRsewhJM

#ThisWeekatJustice, ▶️ Attorney General Merrick B. Garland highlighted the historic decline in #ViolentCrime before the House Judiciary Committee ▶️ Charged 47 defendants, made dozens of arrests, and seized 2 million doses of fentanyl associated with the Sinaloa Cartel to combat #DrugTrafficking ▶️ Justice Department leadership underscored expansions in access to cutting-edge crime gun intelligence technology at ATF's Third Annual Chiefs of Police Executive Forum on Crime Guns ▶️ Announced 4 arrests and kilogram seizures of illegal substances by #LawEnforcement in relation to a drug trafficking conspiracy in Washington and New Jersey after a year-long wiretap investigation ▶️ Sentenced a white supremacist to 26 months and 3 years of supervised release for federal hate crimes targeting Black and Jewish people and desecrating a synagogue Keep up with the latest news from the Justice Department at justice.gov/news For closed captions: https://lnkd.in/gVX4RCvH

Court Imposes Restrictions on Alcohol Addiction Treatment Company to Protect Consumers’ Private Information The Justice Department and the Federal Trade Commission (FTC) announced today that a federal court in Washington, D.C., has entered a settlement that prohibits alcohol addiction treatment company Monument Inc. (Monument) from misrepresenting its data privacy practices and disclosing its customers’ health information to third parties for advertising purposes, and also requires the company to take several measures to safeguard its customers’ personal information. The court also entered a $2.5 million civil penalty judgment against Monument, which is suspended due to the company's inability to pay. A civil complaint filed today alleges that Monument violated the Federal Trade Commission Act and the Opioid Addiction Recovery Fraud Prevention Act of 2018 by misrepresenting on its alcohol addiction treatment website and elsewhere that it would not disclose its customers’ health information without their express consent and by failing to employ reasonable measures to protect its customers’ data. The complaint alleges that such failures led Monument to disclose thousands of users’ health information to third parties for advertising or other purposes. Read more: https://lnkd.in/dMPs7HzE