2 BUSINESSES CITED BY DOL AFTER 6 DIED AND 2 INJURED AFTER GRAIN ELEVATOR EXPLODED

FROM:  U.S. DEPARTMENT OF LABOR
Bartlett Grain in Atchison, Kan., cited for willful and serious violations by US Labor Department after 6 die, 2 injured in grain elevator explosion
Contractor Kansas Grain Inspection Services also cited
ATCHISON, Kan. — Bartlett Grain Co. L.P. faces five willful and eight serious safety violations cited by the U.S. Department of Labor's Occupational Safety and Health Administration following an October 2011 grain elevator explosion in Atchison that killed six workers and left two others hospitalized.

The willful violations include allowing grain dust — which is nine times as explosive as coal dust — to accumulate, using compressed air to remove dust without first shutting down ignition sources, jogging (repeatedly starting and stopping) inside bucket elevators to free legs choked by grain, using electrical equipment inappropriate for the working environment and failing to require employees to use fall protection when working from heights.

"The deaths of these six workers could have been prevented had the grain elevator's operators addressed hazards that are well known in this industry," said Secretary of Labor Hilda L. Solis. "Bartlett Grain's disregard for the law led to a catastrophic accident and heartbreaking tragedy for the workers who were injured or killed, their families and the agricultural community."

The serious violations involve a lack of proper preventive maintenance, certification and lubrication of grain handling equipment; inadequate emergency action plan training for employees and contractors; a lack of employee and contractor training on job hazards; and a housekeeping program that was deficient because it did not prevent grain dust accumulations.
The citations to Bartlett Grain, which is based in Kansas City, Mo., carry $406,000 in proposed fines.

Topeka-based Kansas Grain Inspection Services Inc., a contractor employed by Bartlett Grain, also is being cited for one willful violation involving a lack of fall protection for employees working on the top of rail cars; one serious violation, the lack of a hazard communication program; and one other-than-serious violation, not providing basic advisory information about respirators to employees. These violations carry total proposed penalties of $67,500.

"OSHA standards save lives, but only if companies comply with them," said Dr. David Michaels, assistant secretary of labor for occupational safety and health. "Bartlett Grain has shown what happens when basic safety standards are ignored, and this agency simply will not tolerate needless loss of life."

A willful violation is one committed with intentional knowing or voluntary disregard for the law's requirements, or with plain indifference to worker safety and health. A serious violation occurs when there is substantial probability that death or serious physical harm could result from a hazard about which the employer knew or should have known. An other-than-serious violation is one that has a direct relationship to job safety and health, but probably would not cause death or serious physical harm.

Over the past 35 years, there have been more than 500 explosions in grain handling facilities across the United States that have killed more than 180 people and injured more than 675. Grain dust is the main source of fuel for explosions in grain handling. This dust is highly combustible and can burn or explode if enough becomes airborne or accumulates on a surface and finds an ignition source (such as a hot bearing, overheated motor or misaligned conveyor belt, as well as heat or sparks from welding, cutting and brazing operations). OSHA standards require that both grain dust and ignition sources be controlled in grain elevators to prevent potentially deadly explosions.

Both companies have 15 business days from receipt of the citations and penalties to comply, request an informal conference with OSHA's area director in Wichita, or contest the findings before the independent Occupational Safety and Health Review Commission.

SEC CHARGES GOLDMAN, SACHS & CO. IN POLICIES AND PROCEDURES CASE

FROM:  SEC
SEC Charges Goldman, Sachs & Co. Lacked Adequate Policies and Procedures for Research “Huddles”
FOR IMMEDIATE RELEASE
2012-61
Washington, D.C., April 12, 2012 — The Securities and Exchange Commission today charged that Goldman, Sachs & Co. lacked adequate policies and procedures to address the risk that during weekly “huddles,” the firm’s analysts could share material, nonpublic information about upcoming research changes. Huddles were a practice where Goldman’s stock research analysts met to provide their best trading ideas to firm traders and later passed them on to a select group of top clients.

Goldman agreed to settle the charges and will pay a $22 million penalty. Goldman also agreed to be censured, to be subject to a cease-and-desist order, and to review and revise its written policies and procedures to correct the deficiencies identified by the SEC. The Financial Industry Regulatory Authority (FINRA) also announced today a settlement with Goldman for supervisory and other failures related to the huddles.

“Higher-risk trading and business strategies require higher-order controls,” said Robert S. Khuzami, Director of the Commission’s Division of Enforcement. “Despite being on notice from the SEC about the importance of such controls, Goldman failed to implement policies and procedures that adequately controlled the risk that research analysts could preview upcoming ratings changes with select traders and clients.”

The SEC in an administrative proceeding found that from 2006 to 2011, Goldman held weekly huddles sometimes attended by sales personnel in which analysts discussed their top short-term trading ideas and traders discussed their views on the markets. In 2007, Goldman began a program known as the Asymmetric Service Initiative (ASI) in which analysts shared information and trading ideas from the huddles with select clients.
According to the SEC’s order, the programs created a serious risk that Goldman’s analysts could share material, nonpublic information about upcoming changes to their published research with ASI clients and the firm’s traders. The SEC found these risks were increased by the fact that many of the clients and traders engaged in frequent, high-volume trading. Despite those risks, Goldman failed to establish adequate policies or adequately enforce and maintain its existing policies to prevent the misuse of material, nonpublic information about upcoming changes to its research. Goldman’s surveillance of trading ahead of research changes — both in connection with huddles and otherwise — was deficient.

“Firms must understand that they cannot develop new programs and services without evaluating their policies and procedures,” said Antonia Chion, Associate Director in the SEC’s Division of Enforcement.

In 2003, Goldman paid a $5 million penalty and more than $4.3 million in disgorgement and interest to settle SEC charges that, among other violations, it violated Section 15(f) of the Securities Exchange Act of 1934 by failing to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material, nonpublic information obtained from outside consultants about U.S. Treasury 30-year bonds.  The 2003 order found that although Goldman had policies and procedures regarding the use of confidential information, its policies and procedures should have identified specifically the potential for receiving material, nonpublic information from outside consultants. Goldman settled the SEC’s 2003 proceeding without admitting or denying the findings.

The order issued today finds that Goldman willfully violated Section 15(g) of the Exchange Act (formerly Section 15(f)). The SEC censured the firm and ordered it to cease and desist from committing or causing any violations and any future violations of Section 15(g) of the Exchange Act. Under the terms of the settlement, Goldman will pay a $22 million penalty, $11 million of which shall be deemed satisfied upon payment by Goldman of an $11 million penalty to FINRA in a related proceeding. The SEC considers a variety of factors, including prior enforcement actions, when determining sanctions.

In addition, Goldman agreed to complete a comprehensive review of the policies, procedures, and practices relating to the SEC’s findings in the order, and to adopt, implement, and maintain practices and written policies and procedures consistent with the findings of the order and the recommendations in the comprehensive review. In June 2011, Goldman entered into a consent order relating to the huddles and ASI with the Massachusetts Securities Division (Docket No. 2009-079). In the SEC’s action, Goldman admits to the factual findings to the extent those findings are also contained in Section V of the Massachusetts Consent Order, but otherwise neither admits nor denies the SEC’s findings.

Stacy Bogert, Drew Dorman, Dmitry Lukovsky, Alexander Koch, and Yuri Zelinsky in the SEC’s Division of Enforcement conducted the investigation.
The SEC thanks FINRA for its assistance in this matter.

JUSTICE GOES AFTER E-BOOK PRICE FIXING

FROM:  U.S. DEPARTMENT OF JUSTICE
JUSTICE DEPARTMENT REACHES SETTLEMENT WITH THREE OF THE
LARGEST BOOK PUBLISHERS AND CONTINUES TO LITIGATE AGAINST
APPLE INC. AND TWO OTHER PUBLISHERS TO RESTORE PRICE
COMPETITION AND REDUCE E-BOOK PRICES
Department Settles with Hachette, HarperCollins and Simon & Schuster;
Litigates Against Apple, Macmillan and Penguin to Prevent Continued
Restrictions on Price Competition
WASHINGTON — The Department of Justice announced today that it has reached a settlement with three of the largest book publishers in the United States– Hachette Book Group (USA), HarperCollins Publishers L.L.C. and Simon & Schuster Inc.–and will continue to litigate against Apple Inc. and two other publishers–Holtzbrinck Publishers LLC, which does business as Macmillan, and Penguin Group (USA)–for conspiring to end e-book retailers' freedom to compete on price, take control of pricing from e-book retailers and substantially increase the prices that consumers pay for e-books. The department said that the publishers prevented retail price competition resulting in consumers paying millions of dollars more for their e-books.

The civil antitrust lawsuit was filed in U.S. District Court for the Southern District of New York against Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the department's antitrust concerns with Hachette, HarperCollins and Simon & Schuster, and would require the companies to grant retailers–such as Amazon and Barnes & Noble–the freedom to reduce the prices of their e-book titles.

"As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles," said Attorney General Eric Holder. "We allege that executives at the highest levels of these companies–concerned that e-book sellers had reduced prices–worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers."

"With today's lawsuit, we are sending a clear message that competitors, even in rapidly evolving technology industries, cannot conspire to raise prices," said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice's Antitrust Division. "We want to undo the harm caused by the companies' anticompetitive conduct and restore retail price competition so that consumers can pay lower prices for their e-books."

The department's Antitrust Division and the European Commission cooperated closely with each other throughout the course of their respective investigations, with frequent contact between the investigative staffs and the senior officials of the two agencies. The department also worked closely with the states of Connecticut and Texas to uncover the publishers' illegal conspiracy.

According to the complaint, the five publishers and Apple were unhappy that competition among e-book sellers had reduced e-book prices and the retail profit margins of the book sellers to levels they thought were too low. To address these concerns, they worked together to enter into contracts that eliminated price competition among bookstores selling e-books, substantially increasing prices paid by consumers. Before the companies began their conspiracy, retailers regularly sold e-book versions of new releases and bestsellers for, as described by one of the publisher's CEO, the "wretched $9.99 price point." As a result of the conspiracy, consumers are now typically forced to pay $12.99, $14.99, or more for the most sought-after e-books, the department said.

The department alleges the conspiracy began in the summer of 2009. CEOs from the publishing companies met privately as a group about once per quarter. The meetings took place in private dining rooms of upscale Manhattan restaurants and were used to discuss confidential business and competitive matters, including Amazon's e-book's retailing practices.

The complaint states that the companies accomplished their conspiracy by agreeing to stop the longstanding practice of selling e-books, as they long sold print books, on wholesale to bookstores, and leaving it to the bookstores to set the price at which they would sell the e-books to consumers. Through their conspiracy, the companies imposed a new model under which the publishers seized e-book pricing authority from all of their retail bookstores and raised prices for e-books.

As stated in the department's complaint, one publisher's CEO said, "Our goal is to force Amazon to return to acceptable sales prices through the establishment of agency contracts in the USA. . . . To succeed our colleagues must know that we entered the fray and follow us."

The publishers also agreed with Apple to pay Apple a 30 percent commission for each e-book purchased through Apple's iBookstore and promised, through a retail price-matching most favored nation (MFN) provision, that no other e-book retailer would sell an e-book title at a lower price than Apple.
As stated in the department's complaint, Apple's then-CEO Steve Jobs said, "the customer pays a little more, but that's what you [publishers] want anyway."  Based on the commitments to Apple, the publishers imposed agency terms, over some objections, on all other e-book retailers.  As a result, no e-book retailer is able to compete by using its commission to discount or reduce the price that the publishers set for their e-book titles or offer any special sales promotions to encourage consumers to purchase those e-books. The department said that the intent and effect of the publishers' contracts with Apple was to raise the prices that consumers nationwide pay for e-books.

Under the proposed settlement agreement with Hachette, HarperCollins and Simon & Schuster, they will terminate their agreements with Apple and other e-books retailers and will be prohibited for two years from entering into new agreements that constrain retailers' ability to offer iscounts or other promotions to consumers to encourage the sale of the publishers' e-books.  The settlement does not prohibit Hachette, HarperCollins and Simon & Schuster from entering new agency agreements with e-book retailers, but those agreements cannot prohibit the retailer from reducing the price set by the publishers.

The proposed settlement agreement also will prohibit Hachette, HarperCollins and Simon & Schuster for five years from again conspiring with or sharing competitively sensitive information with their competitors. It will impose a strong antitrust compliance program on the three companies, which will include a requirement that each provide advance notification to the department of any e-book ventures they plan to undertake jointly with other publishers and that each regularly report to the department on any communications they have with other publishers. Also for five years, Hachette, HarperCollins and Simon & Schuster will be forbidden from agreeing to any kind of MFN that could undermine the effectiveness of the settlement agreement.

The ongoing litigation against Apple, Macmillan and Penguin seeks to restore price competition among e-book retailers in the sale of the litigating publishers' e-books. Under the existing agency agreements, Macmillan and Penguin prohibit e-book retailers from exercising any pricing discretion on their titles, and Apple is freed from any price competition with other retailers in selling those e-books.
Hachette Book Group USA has its principal place of business in New York City. It publishes e-books and print books through its publishers such as Little, Brown and Company and Grand Central Publishing.

HarperCollins Publishers, L.L.C. has its principal place of business in New York City. It publishes e-books and print books through publishers such as Harper and William Morrow.

Macmillan has its principal place of business in New York City. It publishes e-books and print books through publishers such as Farrar, Straus and Giroux, and St. Martin's Press. Verlagsgruppe Georg von Holtzbrinck GmbH owns Holtzbrinck Publishers LLC, which does business as Macmillan, and has its principal place of business in Stuttgart, Germany.

Penguin Group (USA) Inc. has its principal place of business in New York City. It publishes e-books and print books through publishers such as The Viking press and Gotham Books. Penguin Group (USA) Inc. is the U.S. subsidiary of The Penguin Group, a division of Pearson plc, which has its principal place of business in London.

Simon & Schuster Inc. has its principal place of business in New York City. It publishes e-books and print books through publishers such as Free Press and Touchstone.

Apple Inc. has its principal place of business in Cupertino, Calif. Among many other businesses, Apple distributes e-books through its iBookstore.
The proposed settlement, along with the department's competitive impact statement, will be published in the Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60-days of its publication to John R. Read, Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, NW, 4th Floor, Washington, DC 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

The court will determine a pretrial schedule for the case against Apple, Macmillan and Penguin once the companies file their responses to the government's lawsuit.
E-BOOKS, AFFORDABLE E-BOOKS, E-BOOKS PRESS CONFERENCE, E-BOOK PRICE FIXING,

BIG MEDICAL COMPANY SETTLES WITH JUSTICE WITH $42.75 MILLION PAYMENT

FROM:  U.S. DEPARTMENT OF JSUTICE 
Tuesday, April 10, 2012
Dallas-based Tenet Healthcare Pays More Than $42 Million to Settle Allegations of Improperly Billing Medicare Settlement Related to Company’s Inpatient Rehabilitation Facilities
Tenet Healthcare Corporation has agreed to pay the United States $42.75 million to settle allegations that it violated the False Claims Act by overbilling the federal Medicare program, the Justice Department announced today.

The settlement resolves allegations pertaining to the various inpatient rehabilitation facilities (IRFs) that Dallas-based Tenet has owned and operated throughout the country.   IRFs are designed for patients who need an intense rehabilitation program that requires a multidisciplinary, coordinated team approach to improve their ability to function.   Because the patients treated at these facilities require more intensive rehabilitation therapy and closer medical supervision than is provided in other settings, such as acute care hospitals or skilled nursing facilities, Medicare generally pays IRFs at a higher rate for rehabilitation care than it pays for such care in other settings.

The Justice Department alleged that, between May 15, 2005, and Dec. 31, 2007, Tenet improperly billed Medicare for the treatment of patients at its IRFs when, in fact, these patient stays did not meet the standards to qualify for an IRF admission.   Today’s settlement is the United States’ single largest recovery pertaining to inappropriate admissions to IRFs.

“The Department of Justice is committed to protecting the Medicare program against all types of overcharging by health care providers,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department's Civil Division. “As today's settlement demonstrates, inpatient rehabilitation facilities will not be permitted to bill Medicare for patients who were not qualified for admission.”

“This settlement demonstrates our office’s continued commitment to protect crucial Medicare dollars from fraud and abuse. Inpatient rehabilitation facilities are expensive, and Medicare dollars should be reserved for patients who need the services–not for hospitals seeking to make money through improper billing,” said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia.

“Tenet disclosed this matter to my office as required under its corporate integrity agreement (CIA),” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.  “Our CIA reporting provisions have resulted in recovery of millions of taxpayer dollars back into the Medicare program.”

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between th e two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $6.6 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $8.8 billion.

Acting Assistant Attorney General Delery and U.S. Attorney Yates expressed appreciation to the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Northern District of Georgia, the FBI and the Department of Health and Human Services’ Office of Inspector General and Centers for Medicare and Medicaid Services for their collaboration in investigating this matter.

CFTC SEEKS TO REVOKE REGISTRATIONS OF STRATEGIC RESEARCH LLC

FROM COMMODITY FUTURES TRADING COMMISSION
March 28, 2012
CFTC Seeks to Revoke the Registrations of Illinois Resident Joseph A. Dawson and His Company, Strategic Research LLC
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a notice of intent to revoke the registrations of Illinois residentJoseph A. Dawson (Dawson) and his company, Strategic Research LLC (SR), a registered Commodity Pool Operator (CPO). Dawson is the president and sole principal of SR and has been a registered Associated Person of SR since February 13, 2009.
According to the CFTC’s notice, Dawson is subject to disqualification from registration under the Commodity Exchange Act (CEA) based on his felony conviction for wire fraud, a federal court’s finding that he committed fraud and misappropriation, and a federal court’s entry of a permanent injunction order against him. SR is subject to disqualification from registration under the CEA because Dawson is its principal, according to the notice.

Specifically, the notice states that on March 8, 2011, Dawson pled guilty to three felony counts of wire fraud in violation of 18 U.S.C. § 1343 in United States v. Dawson, a criminal action filed by the U.S. Attorney’s Office for the Northern District of Illinois on Dec. 17, 2009, 09-CR-1037 (N.D. Ill. Dec. 17, 2009). The U.S. District Court for the Northern District of Illinois sentenced Dawson to 54 months of imprisonment and ordered him to pay restitution to his victims.

The notice also states that on April 26, 2011, the U.S. District Court for the Northern District of Illinois entered a consent order of permanent injunction against Dawson in a CFTC anti-fraud action filed on July 20, 2010, against Dawson and his unregistered CPO, Dawson Trading LLC, 10-CV-4510 (N.D. Ill. July 20, 2010) (see CFTC Press Releases 5860-10, July 26, 2010, and 6072-11, July 13, 2011). In that consent order, Dawson admitted that he misappropriated approximately $2.1 million of commodity pool participant funds, fraudulently solicited pool participants, and made material false statements to pool participants in violation of the CEA. The consent order permanently prohibits Dawson from violating the CEA’s anti-fraud provisions.

DEFUNCT CONSTRUCTION COMPANY ORDER TO RESTORE $520,000 TO RETIREMENT PLAN

FROM U.S. DEPARTMENT OF LABOR
Judge orders defunct California construction company to restore nearly $520,000 to employee retirement plan following US Labor Department lawsuit
Explore General failed to remit workers’ fringe benefits
SAN FRANCISCO — Fresno-based Explore General Inc. and Jaime M. Gonzalez have been ordered to restore $519,601 to the company's 401(k) profit-sharing plan, according to the terms of a judgment and order entered in the U.S. District Court for the Eastern District of California.

The judgment and order resolve a lawsuit that was filed by the U.S. Department of Labor based on an investigation by its Employee Benefits Security Administration. The suit alleged that the defendants failed to pay required fringe benefits to the plan and breached their fiduciary duties under the Employee Retirement Income Security Act by not administering the plan solely in the best interests of participants. At the time of the violations, Gonzalez was the owner and president of the company.

Chief Judge Anthony W. Ishii found that the now-defunct construction company was required to pay its workers an hourly prevailing wage rate, including a fringe benefit for each participant in the form of contributions to the retirement plan, when it was contracted to perform work on projects financed by government agencies. The company was paid in full by the agencies for its work, including fringe benefit amounts, and certified that it was sending the fringe benefits to the plan. However, the company failed to remit more than $300,000 to the plan, choosing instead to use the money for general operating expenses. In addition to that amount, the judge's order requires the company to restore lost earnings to the plan.

"Retirement savings are a vital part of ensuring a steady income after we leave the workforce, which is a key reason that Congress chose to give them special protections," said Phyllis C. Borzi, assistant secretary of labor for employee benefits security. "Unfortunately, the individuals entrusted with protecting this plan violated those safeguards."

DEPARTMENT OF STATE AND ALPINE AEROSPACE CO. REACH AGREEMENT ON ARMS EXPORT VIOLATIONS

FROM U.S. STATE DEPARTMENT

The Department of State has reached administrative agreement with Alpine Aerospace Corporation and TS Trade Tech Incorporated of New Jersey to resolve violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR) related to the export of significant military equipment.

The two companies, which share common ownership, procure and sell replacement parts to the aerospace industry. Many of the parts procured and sold by the Companies are designated as defense articles pursuant to § 38 of the AECA and the United States Munitions List (USML), § 121.1 of the ITAR and require authorization from the Department prior to export. Following an October 2010 filing of criminal information in the District Court for the District of New Jersey, the companies approached the Department to propose an administrative settlement and disclose additional violations.

From July 2005 through January 2007, the two companies arranged several foreign sales without obtaining the proper approvals prior to exporting, and in some instances, cited licenses that did not cover the companies' exports. In addition, the companies failed to obtain the appropriate non-transfer and use certifications for export of significant military equipment.

The Department proposed the following charges, which are resolved by the concluded agreements along with additional violations disclosed to the Department. Alpine engaged in six exports of parts for use on a Hawk missile system, and in a separate violation, failed to obtain a DSP-83 Non-Transfer and Use Certificate for these exports. Alpine cited an existing export license on export control documents for the exports which did not, in fact, authorize the export of parts for the Hawk missile system. TS Trade engaged in one export of aircraft parts and associated equipment without authorization.

Under the terms of the agreements, Alpine agrees to a civil penalty of $30,000 and TS Trade Tech agrees to a civil penalty of $20,000. The civil penalties are to be suspended on the condition that they are to be used for pre- and post-Consent Agreement expenditures for remedial compliance measures. Any portion of the penalty that is not so used will be forfeited at the conclusion of the thirty-month term of the agreements. The companies will implement additional remedial compliance measures, provide additional training to staff and principals, and will undergo two external audits of their compliance programs.

The companies have acknowledged the seriousness of the ITAR violations and have cooperated with the Department, expressed regret for their actions and taken steps to improve their compliance with law and regulations. For these reasons, the Department has determined that an administrative debarment of the companies is not appropriate at this time.

RADIATION ONCOLOGY PRACTICE PAYS $3,8 MILLION TO SETTLE FALSE CLAIMS CASE

FROM U.S. DEPARTMENT OF JUSTICE
Tuesday, April 3, 2012
Georgia-Based Radiation Oncology Practice to Pay $3.8 Million to Settle False Claims Act Case
WASHINGTON – Radiotherapy Clinics of Georgia LLC, a radiation oncology practice, and its affiliates RCOG Cancer Centers LLC, Physician Oncology Services Management Company LLC, Frank A. Critz, M.D. and Physician Oncology Services L.P. (collectively, RCOG) agreed to pay $3.8 million to settle claims that they violated the False Claims Act, the Justice Department announced today.  RCOG, which is located in Decatur, Ga., allegedly billed Medicare for medical treatment that they provided to prostate cancer patients in excess of those permitted by Medicare rules and for services that were not medically necessary.
           
The civil settlement resolves complaints filed by two whistleblowers, called relators, under the qui tam, or whistleblower, provisions of the False Claims Act by a former employee and a former doctor who both worked for RCOG.  The government alleged that RCOG overbilled Medicare for port films (X-ray images of the treatment area) and for simulations (the process by which radiation treatment fields are defined, filmed and marked on the skin in preparation for personalized radiation therapy).  Additionally, it was alleged that the practice overbilled Medicare for physics consults (production of complete special consultative reports for an individual patient) and for pre-plans ordered by Dr. Critz that were not medically necessary and/or never reviewed by the doctor.

“Protecting the integrity of the Medicare program, which over 47 million individuals rely on for their medical care, is one of the department’s highest priorities.  Health care providers are put on notice that they must bill only for medically appropriate care” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division.

The complaints, which were filed separately by the two relators, were consolidated into the case captioned United States ex rel. R. Jeffrey Wertz and Rebecca S. Tarlton v. Radiotherapy Clinics of Georgia, LLC, et al., Civil Action No. 1:08-CV-2244, pending in the U.S. District Court for the Northern District of Georgia.  The relators, R. Jeffrey Wertz and Rebecca S. Tarlton, M.D., will receive $646,000 as their share of the proceeds.
Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia, said, “This settlement demonstrates our office's continued commitment to stop Medicare fraud. Unfortunately, otherwise legitimate businesses continue to take advantage of federal healthcare programs for their private profit. We will not ignore these violations.”
“The OIG would like to remind providers that if they know a claim to be false, it is their responsibility to bill the claim properly,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) for the Atlanta region.  “The OIG will continue to hold companies like RCOG responsible for improper claims.”

Brian D. Lamkin, Special Agent in Charge, FBI Atlanta Field Office, stated: “The FBI continues to dedicate many investigative resources to the protection of the federally funded Medicare program from individuals who would attempt to divert these much needed funds through fraud.  The public is reminded that anyone with information regarding healthcare fraud, to include Medicare fraud, related activity should contact their nearest FBI field office.”

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $6.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 are over $9 billion.