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$1.6M Settlement Reached in Medicare Fraud Case

Durable medical equipment provider agrees to resolve Waters & Kraus whistleblower complaint alleging False Claims Act violations

DALLAS –– Waters & Kraus, LLP is pleased to announce a $1.634 million settlement of a qui tam lawsuit by Western Medical Group, Benjamin D. George, and Jody C. Rookstool. The settlement resolves allegations that the defendants submitted false claims to Medicare in connection with a durable medical equipment telemarketing scheme targeting Medicare beneficiaries.

Craig Bearden, who is represented by Charles Siegel and Caitlyn Silhan of Waters & Kraus, LLP, worked for Western Medical Group for a short period of time. As alleged in his complaint, during his employment Mr. Bearden learned that the company took advantage of unsuspecting Medicare beneficiaries through a bait-and-switch scheme, using telemarketers who initially claimed to be calling to sell identity theft protection but ultimately induced the beneficiaries into agreeing to order Medicare-covered knee and back braces, regardless of whether they had any legitimate need for them. The scheme violated Medicare’s clear prohibition on unsolicited telemarketing of durable medical equipment, as well as the False Claims Act.

Through his attorneys, Mr. Bearden blew the whistle and reported the fraud to the Department of Justice by filing a complaint under the False Claims Act, which allows whistleblowers to bring a lawsuit on behalf of the federal government. The United States Attorney’s Office for the District of Utah, along with the Federal Bureau of Investigation, the Department of Health and Human Services, and the Office of Personnel Management investigated his allegations, as well with those of subsequent whistleblower, and ultimately intervened in and settled the case. The United States Attorney for the District of Utah announced the settlement on Dec. 11, 2018.

“We are proud to represent Mr. Bearden in this case, and commend his courage in coming forward to report a fraudulent scheme that targeted vulnerable seniors at the taxpayers’ expense,” Caitlyn Silhan said. “We also greatly appreciate the hard work and dedication of the federal prosecutors and agents that investigated this case, especially Sandra Steinvoort, Assistant United States Attorney for the District of Utah.”

Mr. Bearden’s case is docketed as United States ex rel. Craig Bearden v. Arizona Medical Supply, LLC, dba Western Medical et al., No. 2:13-cv-01127. The other case resolved in connection with this settlement is United States, ex rel., Michelle Boucher, P.A., v. KPM Capital, LLC dba Western Medical Group, et al.

About Waters & Kraus

Waters & Kraus, LLP is a national plaintiffs’ firm with lawyers litigating complex civil matters. The firm represents plaintiffs in qui tam whistleblower actions and False Claims Act litigation nationwide. Based in Dallas, Texas, the firm has offices in California, Louisiana, and by appointment in Illinois. Our attorneys represent whistleblowers exposing fraud and false claims against the government in a variety of matters including government contractor fraud and procurement fraud, healthcare fraud, assisted living fraud, SEC fraud, and Foreign Corrupt Practices Act (FCPA) violations. Contact us at 800.226.9880 to learn more about our practice and our qui tam attorneys.

Waters Kraus & Paul is the West Coast practice of Waters & Kraus, LLP, a national plaintiffs’ law firm.

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