Texas Man Arrested for Alleged COVID-19 Fraud Scheme 

Texas Man Arrested for Alleged COVID-19 Fraud Scheme 

Scott Davis of Harris County, Texas, was charged with wire fraud, bank fraud, and money laundering for allegedly fraudulently receiving over $3.3 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to DOJ’s press release, Davis submitted applications for three businesses which he claimed to represent and falsely claimed that these businesses had numerous employees and significant payroll expenses. He also allegedly falsely represented that he had not been convicted of a felony in the prior five years when, in fact, he pled guilty to felony wire fraud charges in April 2017. Davis allegedly spent a large amount of the $3.3 million in PPP loan funds received on luxury vehicles, real estate, and private jet travel. 

Read the DOJ’s press release here.

Arkansas Woman Sentenced for Participation in Covid-19 Fraud Scheme 

A woman from Fort Smith, Arkansas, was sentenced to 41 months imprisonment and ordered to pay $120,978.00 in restitution for her participation in a COVID-19 fraud scheme. The defendant pled guilty to one count of wire fraud in connection with filing for pandemic related unemployment benefits from the Arkansas Department of Workforce Services using others’ identities without their knowledge or consent. 

Read the DOJ’s press release here.

Michigan Company To Pay $500,000 To Resolve Allegations of Federal Contract Fraud 

Metna Co., a Lansing, Michigan based research and development firm, along with its president, agreed to pay $500,000 to resolve allegations that Metna violated the False Claims Act by failing to disclose its use of underpaid foreign graduate students to obtain Small Business Innovation Research (“SBIR”) contracts from the U.S. Army. 

Metna is alleged to have falsely certified in its SBIR proposals that it was not using foreign nationals. The foreign students allegedly used by Metna were not eligible to work at Metna because Metna provided false information to Michigan State University to secure the necessary F-1 visa work authorizations. In addition, Metna is alleged to have failed to use third-party consultants listed and budgeted for in its proposals and the designated principal investigator did not allegedly serve as the principal investigator. Metna and its president also agreed to a two-year ban from federal contracting and financial assistance. 

Read the DOJ’s press release here.

Pennsylvania Pharmacy and Its Owner To Pay $1 Million To Resolve FCA Allegations 

Bachtu “Theresa” Phan, the owner of LAN Apothecary, Inc., agreed to jointly pay (with the apothecary) $1 million to resolve allegations that they fraudulently billed Medicare for prescription medications, such as Januvia, Janumet, Zetia, Tradjenta, Linzess, Advair Diskus, Namenda XR, and Dexilant, that were not dispensed. Phan and her apothecary also agreed to enter into a corporate integrity agreement with the Office of the Inspector General of the Department of Health and Human Services Office, that requires them to undertake substantial compliance obligations and contract with an Independent Review Organization that will conduct third-party audits of their drug inventory and claims submitted to Medicare and Medicaid. 

Read the DOJ’s press release here.

Mississippi Physician and Family Medical Practice To Pay $375,000 To Resolve FCA Liability

Kevin Cooper, M.D., and his family medical practice, Cooper Family Medical Center, agreed to pay $375,000 to resolve allegations that he overbilled Medicare for non-reimbursable acupuncture devices. 

P-Stim is an electro-acupuncture device that is supposed to be affixed to the back of a patient’s ear using an adhesive while needles are inserted into the patient’s ear using another adhesive. Once the device is properly connected, the device is activated and provides intermittent stimulation via electrical pulses for approximately four days until the device’s battery runs out. Despite the fact that Medicare does not reimburse for these acupuncture devices, from July 2018 to August 2019, Dr. Cooper submitted false claims to Medicare falsely indicating that he surgically implanted these devices. Dr. Cooper and his practice received $179,106.72 from Medicare as a result of these false claims.

Read the DOJ’s press release here.