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Sunday, February 16, 2025

Releasing Countries From The Humanitarian And Economic Prisons Of Warfare


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The same, multi-national collaborative negotiation used to free 24 prisoners in Russia can be utilized to prevent and resolve wars.

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I have learned a great deal in two military combat tours, 36 years in the weapons systems business and 17 years as a national and international volunteer counselor to small business.

The most important lesson has been that someone different than I may not have the same value system I possess, but by learning about them I will be able to make distinctions between my values and theirs. 

That learning process permits me to consider accepting the differences between us, communicate with them and move forward on constructive objectives.

When governments and weapons makers treasure the economic windfalls in collective military industrial technology while refusing to negotiate, then political and military values on both sides of a world conflict collide.

Soldiers and civilians then die and economies endure massive debt or risk collapse while other world powers are forced to take sides.

All wars eventually result in negotiated settlements. Avoiding them by learning and negotiation in the first place is the most effective war weapon and by far the least costly in materials, debt and lives. 

A look over our shoulders at our recent warfare is useful when viewing our future while making prudent decisions regarding financial and defense security. Every citizen from the individual voter to the politician must consider the risks and the opportunities to avoid the risks of war.  

Effective negotiation must involve learning the other party’s values, not simply the perceived threat they represent to us because we do not know them.

From the neighborhood to the boardroom, from the Statehouse to the Congress and the White House, we would do well to learn more about those different from us before we fight.

The way forward lies in developing a mutual understanding of our respective values and cultures in lieu of fighting wars by using diplomacy and negotiation to save lives and economies.

Nations are evolving technological tools for communication at a startling pace. Our diplomacy, and negotiation must keep pace by using those tools with communicative, knowledgeable leadership to keep the peace.

What Can We Learn From People Who Are Different From Us?

Sunday, February 09, 2025

How the Pentagon Became Walmart



“FOREIGN POLICY”  By 
“Asking warriors to do everything poses great dangers for our country — and the military.
Our armed services have become the one-stop shop for America’s policymakers.
Here’s the vicious circle in which we’ve trapped ourselves: As we face novel security threats from novel quarters — emanating from nonstate terrorist networks, from cyberspace, and from the impact of poverty, genocide, or political repression, for instance — we’ve gotten into the habit of viewing every new threat through the lens of “war,” thus asking our military to take on an ever-expanding range of nontraditional tasks. But viewing more and more threats as “war” brings more and more spheres of human activity into the ambit of the law of war, with its greater tolerance of secrecy, violence, and coercion — and its reduced protections for basic rights.
Meanwhile, asking the military to take on more and more new tasks requires higher military budgets, forcing us to look for savings elsewhere, so we freeze or cut spending on civilian diplomacy and development programs. As budget cuts cripple civilian agencies, their capabilities dwindle, and we look to the military to pick up the slack, further expanding its role.
“If your only tool is a hammer, everything looks like a nail.” The old adage applies here as well. If your only functioning government institution is the military, everything looks like a war, and “war rules” appear to apply everywhere, displacing peacetime laws and norms. When everything looks like war, everything looks like a military mission, displacing civilian institutions and undermining their credibility while overloading the military.
More is at stake than most of us realize. Recall Shakespeare’s Henry V:
In peace there’s nothing so becomes a man
As modest stillness and humility:
But when the blast of war blows in our ears,
Then imitate the action of the tiger;
Stiffen the sinews, summon up the blood,
Disguise fair nature with hard-favour’d rage 
In war, we expect warriors to act in ways that would be immoral and illegal in peacetime. But when the boundaries around war and the military expand and blur, we lose our ability to determine which actions should be praised and which should be condemned.
For precisely this reason, humans have sought throughout history to draw sharp lines between war and peace — and between the role of the warrior and the role of the civilian. Until less than a century ago, for instance, most Western societies maintained that wars should be formally declared, take place upon clearly delineated battlefields, and be fought by uniformed soldiers operating within specialized, hierarchical military organizations. In different societies and earlier times, humans developed other rituals to delineate war’s boundaries, from war drums and war sorcery to war paint and complex initiation rites for warriors.
Like a thousand other human tribes before us, we modern Americans also engage in elaborate rituals to distinguish between warriors and civilians: Our soldiers shear off their hair, display special symbols on their chests, engage in carefully choreographed drill ceremonies, and name their weapons for fearsome spirits and totem animals (the Hornet, the Black Hawk, the Reaper). And despite the changes ushered in by the 9/11 attacks, most of us view war as a distinct and separate sphere, one that shouldn’t intrude into our everyday world of offices, shopping malls, schools, and soccer games. Likewise, we relegate war to the military, a distinct social institution that we simultaneously lionize and ignore. War, we like to think, is an easily recognizable exception to the normal state of affairs and the military an institution that can be easily, if tautologically, defined by its specialized, war-related functions.
But in a world rife with transnational terrorist networks, cyberwarriors, and disruptive nonstate actors, this is no longer true. Our traditional categories — war and peace, military and civilian — are becoming almost useless.
In a cyberwar or a war on terrorism, there can be no boundaries in time or space: We can’t point to the battlefield on a map or articulate circumstances in which such a war might end. We’re no longer sure what counts as a weapon, either: A hijacked passenger plane? A line of computer code? We can’t even define the enemy: Though the United States has been dropping bombs in Syria for almost two years, for instance, no one seems sure if our enemy is a terrorist organization, an insurgent group, a loose-knit collection of individuals, a Russian or Iranian proxy army, or perhaps just chaos itself.
We’ve also lost any coherent basis for distinguishing between combatants and civilians: Is a Chinese hacker a combatant? What about a financier for Somalia’s al-Shabab, or a Pakistani teen who shares extremist propaganda on Facebook, or a Russian engineer paid by the Islamic State to maintain captured Syrian oil fields?
When there’s a war, the law of war applies, and states and their agents have great latitude in using lethal force and other forms of coercion. Peacetime law is the opposite, emphasizing individual rights, due process, and accountability.
When we lose the ability to draw clear, consistent distinctions between war and not-war, we lose any principled basis for making the most vital decisions a democracy can make: Which matters, if any, should be beyond the scope of judicial review? When can a government have “secret laws”? When can the state monitor its citizens’ phone calls and email? Who can be imprisoned and with what degree, if any, of due process? Where, when, and against whom can lethal force be used? Should we consider U.S. drone strikes in Yemen or Libya the lawful wartime targeting of enemy combatants or nothing more than simple murder?
When we heedlessly expand what we label “war,” we also lose our ability to make sound decisions about which tasks we should assign to the military and which should be left to civilians.
Today, American military personnel operate in nearly every country on Earth — and do nearly every job on the planet. They launch raids and agricultural reform projects, plan airstrikes and small-business development initiatives, train parliamentarians and produce TV soap operas. They patrol for pirates, vaccinate cows, monitor global email communications, and design programs to prevent human trafficking.
Many years ago, when I was in law school, I applied for a management consulting job at McKinsey & Co. During one of the interviews, I was given a hypothetical business scenario: “Imagine you run a small family-owned general store. Business is good, but one day you learn that Walmart is about to open a store a block away. What do you do?”
“Roll over and die,” I said immediately.
The interviewer’s pursed lips suggested that this was the wrong answer, and no doubt a plucky mom-and-pop operation wouldn’t go down without a fight: They’d look for a niche, appeal to neighborhood sentiment, or maybe get artisanal and start serving hand-roasted chicory soy lattes. But we all know the odds would be against them: When Walmart shows up, the writing is on the wall.
Like Walmart, today’s military can marshal vast resources and exploit economies of scale in ways impossible for small mom-and-pop operations. And like Walmart, the tempting one-stop-shopping convenience it offers has a devastating effect on smaller, more traditional enterprises — in this case, the State Department and other U.S. civilian foreign-policy agencies, which are steadily shrinking into irrelevance in our ever-more militarized world. The Pentagon isn’t as good at promoting agricultural or economic reform as the State Department or the U.S. Agency for International Development — but unlike our civilian government agencies, the Pentagon has millions of employees willing to work insane hours in terrible conditions, and it’s open 24/7.
It’s fashionable to despise Walmart — for its cheap, tawdry goods, for its sheer vastness and mindless ubiquity, and for the human pain we suspect lies at the heart of the enterprise. Most of the time, we prefer not to see it and use zoning laws to exile its big-box stores to the commercial hinterlands away from the center of town. But as much as we resent Walmart, most of us would be hard-pressed to live without it.
As the U.S. military struggles to define its role and mission, it evokes similarly contradictory emotions in the civilian population. Civilian government officials want a military that costs less but provides more, a military that stays deferentially out of strategy discussions but remains eternally available to ride to the rescue. We want a military that will prosecute our ever-expanding wars but never ask us to face the difficult moral and legal questions created by the eroding boundaries between war and peace.
We want a military that can solve every global problem but is content to remain safely quarantined on isolated bases, separated from the rest of us by barbed wire fences, anachronistic rituals, and acres of cultural misunderstanding. Indeed, even as the boundaries around war have blurred and the military’s activities have expanded, the U.S. military itself — as a human institution — has grown more and more sharply delineated from the broader society it is charged with protecting, leaving fewer and fewer civilians with the knowledge or confidence to raise questions about how we define war or how the military operates.
It’s not too late to change all this.
No divine power proclaimed that calling something “war” should free us from the constraints of morality or common sense or that only certain tasks should be the proper province of those wearing uniforms. We came up with the concepts, definitions, laws, and institutions that now trap and confound us — and they’re no more eternal than the rituals and categories used by any of the human tribes that have gone before us.
We don’t have to accept a world full of boundary-less wars that can never end, in which the military has lost any coherent sense of purpose or limits. If the moral and legal ambiguity of U.S.-targeted killings bothers us, or we worry about government secrecy or indefinite detention, we can mandate new checks and balances that transcend the traditional distinctions between war and peace. If we don’t like the simultaneous isolation and Walmartization of our military, we can change the way we recruit, train, deploy, and treat those who serve, change the way we define the military’s role, and reinvigorate our civilian foreign-policy institutions.
After all, few generals actually want to preside over the military’s remorseless Walmartization: They too fear that, in the end, the nation’s over-reliance on an expanding military risks destroying not only the civilian competition but the military itself. They worry that the armed services, under constant pressure to be all things to all people, could eventually find themselves able to offer little of enduring value to anyone.
Ultimately, they fear that the U.S. military could come to resemble a Walmart on the day after a Black Friday sale: stripped almost bare by a society both greedy for what it can provide and resentful of its dominance, with nothing left behind but demoralized employees and some shoddy mass-produced items strewn haphazardly around the aisles.”

Saturday, February 01, 2025

A Government Tyranny Meter



Evaluate this government tyranny meter by asking yourself 5 KEY questions. Determine whether Mr. Jefferson would have some concerns today about the state of tyranny in the U.S. and whether or not you should have some concerns as well.  
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Tyranny sprouts within massive organizations through influences that embed themselves in economies and assume a life of their own.

These influences become entrenched and difficult to change because they are wired to so much of economic and public life (a defense company in every state, a pork project tacked onto a defense appropriation); it becomes a subtle,sophisticated evolution.




Tuesday, January 28, 2025

False Claims Act Settlements and Judgments Exceed $2.9B in Fiscal Year 2024

 

Editors Note: Individual Agency Inspectors General play vital roles in achieving this sort of public money recovery.

U.S. STATE DEPARTMENT Press Release Number: 25-58

"The False Claims Act imposes treble damages and penalties on those who knowingly and falsely claim money from the United States or knowingly fail to pay money owed to the United States. 2024 had the highest number of Whistle Blower Actions filed in history."

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"Settlements and judgments under the False Claims Act exceeded $2.9 billion in the fiscal year ending Sept. 30, 2024, Principal Deputy Associate Attorney General Benjamin C. Mizer and Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, announced. The government and whistleblowers were party to 558 settlements and judgments, the second highest total after last year’s record of 566 recoveries, and whistleblowers filed 979 qui tam lawsuits, the highest number in a single year. Settlements and judgments since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $78 billion.

“The Department’s enforcement of the False Claims Act this past year demonstrates its continued commitment to pursuing those who seek to defraud the American taxpayers,” said Principal Deputy Associate Attorney General Mizer. “The False Claims Act and its whistleblower provisions remain a critical tool in protecting the public fisc and ensuring that taxpayer funds serve the purposes for which they were intended.”

“The Department places a high priority on fighting fraud and abuse in federal programs,” said Principal Deputy Assistant Attorney General Boynton, head of the Justice Department’s Civil Division. “The results announced today highlight once again that such conduct will not be tolerated, and that those who knowingly misuse taxpayer funds will be held accountable.”

The False Claims Act imposes treble damages and penalties on those who knowingly and falsely claim money from the United States or knowingly fail to pay money owed to the United States. The False Claims Act thus safeguards government programs and operations that provide access to medical care, support our military and first responders, protect American businesses and workers, help build and repair infrastructure, offer disaster and other emergency relief, and provide many other critical services and benefits. The resolutions in fiscal year 2024 also reflect the Department’s focus on key enforcement priorities, including combating health care fraud, the opioid epidemic, fraud in pandemic relief programs, and violations of cybersecurity requirements in government contracts and grants.

Of the more than $2.9 billion in False Claims Act settlements and judgments reported by the Justice Department this past fiscal year, over $1.67 billion related to matters that involved the health care industry, including managed care providers, hospitals and other medical facilities, pharmacies, pharmaceutical companies, laboratories, and physicians. The amounts included in the $1.67 billion reflect recoveries arising only from federal losses, but in many of these cases, the Department was instrumental in recovering additional amounts for state Medicaid programs.

The Justice Department continued its commitment to use the False Claims Act to deter and redress fraud by individuals as well as corporate entities. Such efforts deter future fraud, incentivize changes in both corporate and individual behaviors, ensure that the proper parties are held responsible, and promote the public’s confidence in our justice system.

The Department also remained committed to incentivizing and rewarding entities and individuals that self-disclose misconduct, demonstrably cooperate in the course of an investigation, and take effective remedial measures. Multiple settlements over the last year acknowledged such cooperative measures and reflected credits afforded to the defendants in the form of reduced penalties or damage multiples in connection with the resolution, including several of the matters discussed in more detail below. These cooperative measures included self-disclosures, assistance with the determination of government losses, disclosures of internal investigations and facts not known to the government, and remedial measures such as implementing tracking system enhancements or terminating or separating employees.

In 1986, Congress strengthened the False Claims Act by increasing incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government. These whistleblowers, or qui tam, actions comprise a significant percentage of the False Claims Act cases that are filed. Qui tam cases may be pursued by the government or the whistleblower, and this past year, significant recoveries were obtained by both. When a qui tam action is successful, the whistleblower, also known as the relator, typically receives a portion of the recovery ranging between 15% and 30%. The 979 qui tam suits filed in fiscal year 2024 breaks the prior record set in 2013, and this past year, the Justice Department reported settlements and judgments exceeding $2.4 billion in these and earlier-filed qui tam suits.

The $2.9 billion in settlements and judgments announced today does not include two significant settlements occurring just after the end of the fiscal year.

On Oct. 10, 2024, Teva Pharmaceuticals USA Inc., the largest generic drug manufacturer in the country, agreed to pay $425 million to resolve allegations that it violated the False Claims Act by paying copays for Medicare patients for the multiple sclerosis drug Copaxone while steadily raising the drug’s price. Teva further agreed to pay $25 million to resolve allegations that it conspired with other generic drug manufacturers to fix prices for certain drugs and that the benefits Teva received under its price fixing scheme constituted illegal kickbacks. This is the seventh resolution arising from the Department’s investigation of price fixing by generic drug manufacturers.

On Oct. 16, 2024, Raytheon Company paid $428 million to resolve allegations that it knowingly provided false cost and pricing data when negotiating with the Department of Defense for numerous government contracts and double billed on a weapons maintenance contract, leading to Raytheon receiving profits in excess of negotiated rates. This is the second largest government procurement fraud recovery under the False Claims Act in history.

Representative examples of False Claims Act matters pursued by the government and whistleblowers this past fiscal year are discussed below.

HEALTH CARE FRAUD

In fiscal year 2024, health care fraud remained a leading source of False Claims Act settlements and judgments. These recoveries restore funds to federal programs such as Medicare, Medicaid, and TRICARE, the health care program for service members and their families. But just as important, in many cases, enforcement of the False Claims Act also protects patients from medically unnecessary or potentially harmful actions. As in years past, the act was used to pursue matters involving a wide array of health care providers, goods, and services.

Opioid Epidemic

The Justice Department continued its pursuit of health care providers, pharmaceutical companies and pharmacies that contributed to and exacerbated the opioid crisis.

Endo Health Solutions, which is in bankruptcy, agreed that the United States has an allowed, unsubordinated, general unsecured claim of $475.6 million in the bankruptcy to resolve, among other things, allegations relating to losses to federal healthcare programs that paid for Opana ER, an opioid drug sold and marketed by Endo. The Department alleged that Endo used an aggressive scheme that marketed Opana ER to high-volume prescribers of opioids, including many prescribers that Endo knew were prescribing Opana ER or other opioids for non-medically accepted indications.

Rite Aid Corporation and 10 subsidiaries and affiliates paid $7.5 million and agreed to provide to the United States an allowed, unsubordinated, general unsecured claim of $401.8 million in Rite Aid’s bankruptcy case to resolve allegations that Rite Aid knowingly dispensed unlawful prescriptions for controlled substances that lacked a legitimate medical purpose, were not issued in the usual course of professional practice and/or were not valid prescriptions, or were not for a medically accepted indication. The unlawful prescriptions included prescriptions for the dangerous, highly diverted combination of drugs known as “the trinity,” and prescriptions for excessive quantities of opioids, such as highly addictive oxycodone and fentanyl.

Dr. Gregory Gerber agreed to a consent judgment that, among other things, requires him to pay $4.7 million arising from allegations that he unlawfully issued prescriptions without a legitimate medical basis for opioids and other controlled substances, that one patient died from an overdose of fentanyl patches prescribed by Gerber, and that Gerber received kickback payments from a drug manufacturer. Gerber was also sentenced to 42 months in prison and one year of home confinement in a related criminal case.

A chain of substance use disorder treatment clinics called Crossroads paid $863,934 to resolve allegations that the clinics defrauded the Medicaid program by billing for treatment services they did not provide by, for example, billing for comprehensive medical examinations when only a regular check-in visit occurred.

Unnecessary Services and Substandard Care

The Justice Department also pursued and resolved matters in which providers billed federal health care programs for medically unnecessary services and substandard care.

Strauss Ventures LLC, doing business as The Grand Health Care System, and 12 affiliated skilled nursing facilities agreed to pay $21.3 million to resolve allegations that they knowingly billed federal health care programs for therapy services that were unreasonable, unnecessary or unskilled, or that simply did not occur as billed. As part of the settlement, the company admitted it had implemented quotas relating to beneficiaries’ length of stay and to the percentages of beneficiaries billed at the highest reimbursement rate, resulting in some Medicare beneficiaries staying on therapy longer than was reasonable and medically necessary.

Acadia Healthcare Company Inc. paid $16.6 million to resolve allegations that six of its health facilities billed for medically unnecessary inpatient behavioral health services and failed to properly discharge beneficiaries when they no longer needed inpatient treatment and had improper and excessive lengths of stay. The United States further alleged that Acadia failed to provide adequate staffing, training and/or supervision of staff, which resulted in assaults, elopements, suicides and other harm resulting from these staffing deficiencies, and failed to provide active treatment, to develop and/or update individualized assessments and treatment plans, to provide adequate discharge planning, and to provide required individual and group therapy.

Daniel Hurt, who owned and/or operated Fountain Health Services LLC, Verify Health, Landmark Diagnostics LLC, First Choice Laboratory LLC, and Sonoran Desert Pathology Associates LLC, agreed to pay over $27 million, based on his ability to pay, to resolve allegations that he and his companies received payments from Medicare for cancer genomic tests that were not medically necessary and were procured through illegal kickbacks.

Medicare Advantage Matters

The Justice Department continued to pursue cases alleging false claims in the Medicare Advantage (or Medicare Part C) program. As Medicare Part C is now the largest component of Medicare, both in terms of federal dollars spent and the number of beneficiaries impacted, the work of the Justice Department in this area is of critical importance.

Oak Street Health, a wholly-owned subsidiary of CVS Health since 2023, paid $60 million to resolve allegations that it paid kickbacks to third-party insurance agents in exchange for recruiting seniors to Oak Street’s primary care clinics. Under the Medicare Advantage Program, Medicare beneficiaries have the option to obtain their health care through privately-operated insurance plans known as MA plans, some of which contract with health care providers, including Oak Street, to provide their plan members with primary care services. The United States alleged that the Oak Street Health payments to the agents improperly incentivized them to base their referrals and recommendations on the financial motivations of Oak Street Health and of the agents rather than the best interests of seniors.

In addition to this matter, the Justice Department continued to litigate a number of other cases involving the Medicare Advantage program, including actions against UnitedHealth GroupElevance Health (formerly Anthem), and the Kaiser Permanente consortium.

Unlawful Kickbacks and Stark Law Violations

Kickbacks paid or received by health care providers undermine the integrity of federal health care programs by tainting medical decision-making, increasing health care costs, and adversely affecting competition. Federal law prohibits the willful solicitation or payment of illegal remuneration to induce the purchase of a good or service paid for by a federal health care program. The Stark Law seeks to safeguard the integrity of the Medicare program by prohibiting billing for certain services when the referring physician and the entity submitting the claim have a financial relationship that does not satisfy one of the statute’s exceptions.

Community Health Network Inc. (Community) paid $345 million to resolve allegations that it submitted claims to Medicare for services that were referred in violation of the Stark Law. The United States alleged that the compensation Community paid to certain physician groups was well above fair market value, and that Community awarded bonuses to physicians that were tied to the number of their referrals. The United States alleged that senior management at Community embarked on an illegal scheme to recruit physicians for employment for the purpose of capturing their lucrative “downstream referrals.”

DaVita Inc. paid $34.5 million to resolve allegations that it paid kickbacks to a competitor to induce referrals to a former subsidiary that provided pharmacy services for dialysis patients. As part of the improper arrangement, the United States alleged that DaVita agreed to acquire certain European dialysis clinics and agreed to purchase dialysis products from the competitor. The United States also alleged that DaVita paid additional kickbacks to nephrologists and vascular physicians to induce referrals to DaVita’s dialysis centers.

Prema Thekkek, her management company Paksn Inc., and six skilled nursing facilities owned by Thekkek and/or operated by Paksn entered into a $45.6 million consent judgment to resolve allegations they paid kickbacks to physicians in the form of medical directorships to induce patient referrals.

RDx Bioscience Inc. (RDx) and its owner and Chief Executive Officer Eric Leykin paid $10.3 million to resolve allegations that they paid kickbacks in the form of commissions based on the volume and value of referrals to independent contractor marketers to arrange for and recommend that healthcare providers order RDx laboratory tests, as well as purported management services organization (MSO) payments to physicians, which were disguised as investment returns but actually were offered to induce the provider to order RDx laboratory tests. To date the government has recovered over $53 million relating to conduct involving MSO kickbacks to healthcare providers, including False Claims Act settlements with 48 physicians.

Innovasis and two senior executives agreed to pay $12 million to resolve allegations that they paid kickbacks to spine surgeons in the form of consulting fees, intellectual property acquisition and licensing fees, registry payments, performance shares in Innovasis, travel to a luxury ski resort, and lavish dinners and holiday parties to induce use of the company’s spinal implants, devices, and other equipment in medical procedures performed on Medicare beneficiaries.

The Justice Department filed claims against Murphy Medical Center, Inc., doing business as Erlanger Western Carolina Hospital, and Chattanooga-Hamilton County Hospital Authority doing business as Erlanger Health System and Erlanger Medical Center (collectively, Erlanger), alleging that Erlanger knowingly submitted claims to Medicare for services that were referred in violation of the Stark Law. The complaint alleged that Erlanger paid its physicians compensation that was well above fair market value and that Erlanger knew that the claims for services referred by those physicians were not eligible for payment.

The Justice Department also filed claims against Rick Nassenstein, formerly the president, chief financial officer, and co-owner of Cardiac Imaging Inc., a provider of mobile cardiac positron emission tomography (PET) scans. The complaint alleges that Nassenstein played a central role in a scheme whereby CII paid above-fair market value fees to doctors who referred patients to CII for cardiac PET scans, which was the subject of a $85 million settlement with Cardiac Imaging and its founder last year.

Other Health Care Fraud

Rite Aid Corporation (Rite Aid) and Rite Aid subsidiaries, Elixir Insurance Company, RX Options LLC, and RX Solutions LLC (Elixir), which offered Medicare drug plans and pharmacy benefit manager (PBM) services, agreed to pay $101 million and to grant the United States an additional, allowed, unsubordinated, general unsecured claim of $20 million in Rite Aid’s bankruptcy to resolve allegations that they failed to accurately report drug rebates to the Medicare Program. The United States alleged that these Rite Aid entities improperly reported portions of rebates they received from manufacturers as bona fide service fees, even though manufacturers did not negotiate with the defendants to pay such fees.

Walgreens Boots Alliance Inc. and Walgreen Co. (together, Walgreens) agreed to pay $106.8 million to resolve allegations that they billed government health care programs for prescriptions that were processed but never picked up by beneficiaries.

Columbus LTACH, doing business as Silver Lake Hospital, and certain of its investors, agreed to pay over $30 million to resolve allegations that Silver Lake claimed excessive Medicare cost outlier payments, a form of supplemental reimbursement to hospitals in cases where the cost of care is unusually high. The settlement also resolved allegations under the Federal Debt Collection Procedures Act that Silver Lake transferred millions of dollars of the hospital’s money to its investors without receiving equivalent value in return, at a time when the hospital had reason to believe that it would not be able to repay its debts to the Medicare program.

Gentiva, successor to Kindred at Home, paid $19.4 million to resolve allegations that Kindred at Home and related entities submitted claims and retained overpayments for hospice services provided to patients who were ineligible to receive hospice benefits.

The Justice Department filed claims against Regeneron Pharmaceuticals Inc., alleging that the company fraudulently inflated Medicare reimbursement rates for Eylea, a medication used to treat neovascular Age-Related Macular Degeneration. The complaint alleges that Regeneron knowingly submitted false average sales price reports, on which Medicare reimbursements are set, to the government that did not take into account certain price concessions.

The Justice Department also filed claims against six health plans (Brighton Marine Health Center, CHRISTUS Health Services, Johns Hopkins Medical Services Corporation, Martin’s Point Health Care, Pacific Medical Center, and St. Vincent’s Catholic Medical Centers of New York) participating in the Uniformed Services Family Health Plan program, as well as their trade group, alleging they knowingly retained inflated payments for healthcare services provided to retired military members and their families. The United States further alleged that after learning of the calculation errors, the plans took steps to conceal the overpayments from the government and continued to submit invoices at the inflated payment rates. The government resolved related claims against Kennell and Associates, an actuarial firm, for $779,951 plus contingent payments, based on its inability to pay.

MILITARY PROCUREMENT FRAUD

The government continued its pursuit of fraud matters involving the purchase of goods and services by the military services. Fraud in these programs not only squanders government funds, but also can deprive servicemembers of critical resources and potentially put them at risk.

Sikorsky Support Services Inc and Derco Aerospace Inc. paid $70 million to resolve allegations they overcharged the U.S. Navy for spare parts and materials needed to repair and maintain the primary aircraft used to train naval aviators. The United States alleged that these entities, which were owned by the same parent company, entered into an improper subcontract that resulted in the Navy paying inflated costs for parts.

Austal USA LLC paid $811,259 to resolve allegations that it knowingly supplied valves that did not meet military specifications. The United States alleged that under a U.S. Navy contract Austal invoiced for military grade valves to be installed on certain combat ships when Austal knew the valves had not met the testing requirements to be deemed military grade.

The Department brought claims against Insect Shield LLC and the Estate of Richard Lane, the founder, majority owner and chief operating officer of the company, for allegedly causing the submission of false claims to the Department of Defense under contracts to provide Army Combat Uniforms. The United States alleges that Insect Shield and Lane falsified the results of the insect repellant testing to conceal failing test results, including by inappropriately combining results from different rounds of testing, re-labeling test samples to hide the true origin of the samples, and performing re-tests of uniforms in excess of what the contract permitted.

PANDEMIC FRAUD

In response to the COVID-19 crisis, Congress authorized historic levels of emergency funding for federal agencies to provide direct financial assistance to individuals, businesses, and state, local, and Tribal governments. The Justice Department’s efforts in this area have included the pursuit of cases involving improper payments under the Paycheck Protection Program (PPP), administered by the Small Business Administration (SBA), and alleged fraud affecting Medicare and other federal healthcare programs for services related to COVID-19 testing and treatment. During fiscal year 2024, the Department obtained more than 250 False Claims Act settlements and judgments, which collectively exceeded more than $250 million, resolving allegations of pandemic-related fraud.

Now-bankrupt financial technology company Kabbage Inc., doing business as KServicing, agreed to resolve allegations that it submitted, and caused the submission of, thousands of false claims for PPP loan forgiveness, loan guarantees, and processing fees to the SBA. The United States alleged that Kabbage systemically inflated PPP loans, causing the SBA to guarantee and forgive loans in amounts that exceeded what borrowers were eligible to receive, and that Kabbage failed to implement appropriate fraud controls. As part of the resolution, the United States will receive an allowed, unsubordinated, general unsecured claim in the bankruptcy proceeding of up to $120 million.

West Coast Dental Administrative Services LLC (formerly West Coast Dental Services Inc.) and its founders and former owners Drs. Soleyman Cohen-Sedgh, Farid Pakravan and Farhad Manavi paid $6.3 million to resolve allegations that the company and affiliated dental offices received seven improper second-draw PPP loans, which were limited to businesses with 300 employees or less. The United States alleged the companies falsely certified that they qualified for these loans.

Hemisphere GNSS (USA) Inc., which was purchased by CNH Industrial in 2023, paid $2.6 million to resolve allegations that it provided false information with a PPP loan and forgiveness of that loan. To obtain the loan, the company certified that no entity created in or organized under the laws of the People’s Republic of China owned or held 20% or more of an economic interest in the company, and that it did not have a board member who was a resident of the People’s Republic of China. The United States alleged that at the time the company applied for the loan, both of those certifications were false.

Andrew Maloney and the clinical laboratory that he owned, Capstone Diagnostics, paid $14.3 million to resolve allegations that, among other things, they sought to profit from the COVID-19 pandemic by paying volume-based commissions to independent contractor sales representatives to recommend respiratory pathogen panel tests to senior communities interested only in COVID-19 tests and to generate orders using forged signatures of physicians that did not reflect the medical conditions of the senior community residents receiving the tests. In a similar matter, the government obtained a $26.3 million default judgment against Provista Health LLC and its owner Patrick Britton-Harr for billing during the height of the pandemic for medically unnecessary respiratory pathogen panel tests and tests that were not performed.

City Medical of the Upper East Side, PLLC, Summit Medical Group, P.A., Summit Health Management, LLC, and Village Practice Management Company LLC, which collectively do business as CityMD, agreed to pay $12 million to resolve allegations for false claims for COVID-19 testing to a Health Resources and Services Administration (HRSA) program for uninsured patients arising from CityMD’s failure to adequately confirm that the individuals had health insurance coverage before submitting their claims to the Uninsured Program.

CYBERSECURITY INITIATIVE

The Department’s effort to combat cybersecurity threats includes its Civil Cyber-Fraud Initiative. The Initiative is dedicated to using the False Claims Act to promote cybersecurity compliance by government contractors and grantees by holding them accountable when they knowingly violate applicable cybersecurity requirements.

The Justice Department filed claims against Georgia Institute of Technology and Georgia Tech Research Corp. alleging that those defendants failed to meet cybersecurity requirements in connection with Department of Defense (DoD) contracts. The complaint alleges that a research lab at Georgia Tech failed to develop and implement a system security plan, as required by DoD cybersecurity regulations, and submitted a false cybersecurity assessment score to DoD for the Georgia Tech campus. The complaint also alleges that the lab failed to install, update or run anti-virus or anti-malware tools on desktops, laptops, servers and networks at the lab.

Guidehouse Inc. paid $7.6 million and Nan McKay agreed to pay $3.7 million to resolve allegations they failed to meet cybersecurity requirements in a contract with New York funded by a federal grant intended to secure online environments for New York residents to apply for federal rental assistance during the Covid-19 pandemic. Guidehouse and McKay admitted that neither satisfied their obligation to complete the required testing of the online site used to house applicants’ information, and the site was shut down within twelve hours after certain applicants’ personally identifiable information had been compromised.

Insight Global LLC paid $2.7 million to resolve allegations it failed to implement adequate cybersecurity measures to protect health information obtained during Covid-19 contact tracing. The United States alleged that the Pennsylvania Department of Health hired the company to provide staffing for Covid-19 contact tracing using funds from the U.S. Centers for Disease Control and Prevention and that the company failed to keep the health information confidential and secure.

OTHER FRAUD RECOVERIES

The judgments, settlements, and lawsuits announced during fiscal year 2024 involved a variety of other programs and schemes that reflect the range of the government’s False Claims Act enforcement efforts.

Gen Digital Inc. (formerly known as Symantec Corp.) paid $55.1 million to satisfy a judgment that it made knowingly false claims to the United States when it misrepresented its commercial sales practices during the negotiation and subsequent performance of a General Services Administration (GSA) contract. The court found after a four-week bench trial that the false disclosures induced GSA to accept and then continue to pay higher prices than it would have had it known of Symantec’s actual commercial pricing practices. The court also found that Symantec continuously violated the Price Reduction Clause, a standard term in these types of contracts that requires the contractor throughout performance of the contract to maintain GSA’s price position in relation to an identified customer or category of customer agreed upon in contract negotiations.

The City of Los Angeles paid $38.2 million to resolve allegations that it failed to meet federal accessibility requirements when it sought and used Department of Housing and Urban Development (HUD) grant funds for multifamily affordable housing. The United States alleged that the city failed to make its affordable multifamily housing program accessible to people with disabilities. The United States further alleged that the city failed to maintain a publicly available list of accessible units and their accessibility features and the city, on an annual basis, falsely certified to HUD that it complied with related grant requirements.

Hilcorp San Juan L.P. paid $34.6 million to resolve allegations that it underpaid royalties owed on oil and natural gas produced from federal lands. The United States alleged that the company made payments to the federal government based on estimated volumes and prices without indicating that the payments were based on estimates and without subsequently adjusting its payments in the following months to account for actual volumes and values, resulting in the underpayment of royalties to the United States. In another case based on allegations of the underpayment of royalties owed on natural gas, XTO Energy Inc. paid $16 million to resolve allegations that the company improperly deducted costs necessary to put the gas in marketable condition, improperly deducted costs of transporting carbon dioxide, and failed to pay royalties on carbon dioxide.

Hahn Air Lines GmbH and Hahn Air USA Inc. paid $26.8 million to resolve allegations that Hahn Air failed to remit to the United States certain travel fees collected from commercial airline passengers flying into or within the United States.

Consolidated Nuclear Security LLC paid $18.4 million to resolve allegations that it billed for time not worked at the National Nuclear Security Administration’s Pantex Site near Amarillo, Texas.

AECOM paid $11.8 million to resolve allegations that it submitted false claims to the Federal Emergency Management Agency for the replacement of certain educational facilities located in Louisiana that were damaged by Hurricane Katrina. The United States alleged that AECOM submitted to FEMA fraudulent requests for disaster assistance funds and did not correct applications that included materially false design, damage and replacement eligibility descriptions. Combined with settlements with other entities involved in the alleged conduct, the government recovered over $25 million in connection with the disaster assistance applications prepared by AECOM.

RECOVERIES IN WHISTLEBLOWER SUITS

Of the $2.9 billion in settlements and judgments reported by the government in fiscal year 2024, over $2.4 billion arose from lawsuits that were filed under the qui tam provisions of the False Claims Act and pursued by either the government or whistleblowers. During the same period, the relator shares for the individuals who exposed fraud and false claims by filing qui tam actions exceeded $400 million.

The number of lawsuits filed under the qui tam provisions of the act has grown significantly since 1986, with an average of more than 18 new cases filed every week during this past year.

“Whistleblowers play a critical role in identifying fraud schemes,” said Principal Deputy Assistant Attorney General Boynton. “We continue to be grateful for their efforts and often substantial sacrifices to uncover and report these schemes.”

In 1986, Senator Charles Grassley and Representative Howard Berman led the successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009 and 2010, further improvements were made to the False Claims Act and its whistleblower provisions.

On behalf of the Civil Division, Principal Deputy Assistant Attorney General Boynton expressed appreciation for the many public servants over the past year who supported the Department’s enforcement efforts. “The accomplishments announced today are a result of the tireless efforts of civil servants who work to protect taxpayer dollars and the important programs that they support,” said Principal Deputy Assistant Attorney General Boynton. “These individuals serve at offices across the country, including the Fraud Section of the Civil Division, the U.S. Attorneys’ Offices, the agency Offices of Inspector General and Offices of General Counsel, and many other federal and state agencies that contribute to this important work.”

Except where indicated, the government’s claims in the matters described above are allegations only and there has been no determination of liability. The numbers contained in this press release may differ slightly from the original press releases due to accrued interest.

View the statistics sheet here.

U.S. STATE DEPARTMENT Press Release Number: 25-58

Saturday, January 18, 2025

What Does Our History Of Massive Waste,Fraud And Abuse in Iraq and Afghanistan Portend for Ukraine And The Middle East Warfare ?

 

By  Ken Larson 

Our near term future as a country involves weighty decisions regarding our fiscal and national security.  There will be trade offs during the next federal government incremental funding authorization.  

We are approaching a National Debt of $37 Trillion with a downgraded fiscal credit rating while carrying the financial burden of ongoing support for NATO and the Ukraine war, investments in the Israel - Hamas conflict, as well as domestic program needs.  

A look over our shoulder at two driving factors in recent warfare is useful. 

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DRIVING FACTOR 1 - GOVERNMENT CONTRACTOR  MOTIVES:

The motives of the U.S. Military Industrial Complex (MIC) and The US Agency for International Development (USAID) contractors fostered continuing wars.  Continued war nets billions in sales of weapons and massive construction and redevelopment dollars for international companies. They often operated fraudulently, fostering waste, fraud and abuse.   

It is common knowledge that many of these corporations spent more each year in lobbying costs than they paid in taxes and passed exorbitant overhead and executive pay costs on to the tax payer, thus financing the riches of their operating personnel while remaining marginally profitable to stockholders.

I watched this from the inside of many of these companies for 36 years. You can read my dissertation on the subject at:

Odyssey of Armaments | Ken Larson - Academia.edu

Here is an example of how the lobbying and behind the scenes string pulling worked during the run up and the conduct of the war incursion into Iraq: 

CorpWatch : US: Lockheed Stock and Two Smoking Barrels

DRIVING FACTOR 2 - LACK OF CULTURAL UNDERSTANDING 

There was a complete lack of cultural understanding between U.S. and Western decision makers and the middle east culture they were trying to "Assist" by nation building. 

The only real cultural understanding that existed during the period was in the person of General Schwarzkopf who spent much of his youth in the Middle East with his father, an ambassador to Saudi Arabia. He was fascinated by the Arab culture, commanded their respect and, like Eisenhower, led a successful coalition during the first Gulf War to free Kuwait.  

He astutely recommended no occupation of Iraq, went home and stayed out of government. Norman, like General Eisenhower, knew the power of the MIC. 

Eisenhower's Departing Speech

U.S Tax payers funded billions in USAID and construction projects in Iraq. The money was wasted due to a lack of cultural understanding, waste,  fraud and abuse. The Project On Government Oversight (POGO) has documented that aspect of the Iraq war history, as well as similar motives and abuses in Afghanistan. 

POGO on Iraq

CONCLUSION AND A HOPE FOR OUR FORTHCOMING DECISIONS:

There is history repeating itself here - much like Vietnam and Iraq, the above two factors are deeply at play again, with a lack of astute learning in our government as we look back over our shoulder.

We must come to the understanding, like a highly respected war veteran and West Point Instructor recently stated, “Victory’s been defeated; it’s time we recognized that and moved on to what we actually can accomplish."

West Point Modern War Institute

Frank Spinney is an expert on the MIC. He spent the same time I did on the inside of the Pentagon while I worked Industry. You may find his interviews informative.

Inside the Pentagon: 30-Year Insider Chuck Spinney

I have hope these historical factors are useful in considering our future financial and defense security and that every U.S. citizen from the individual voter to the politician will consider them in their decision-making. 

What Can We Learn From People Who Are Different From US