An Orange County, California resident has agreed to pay $600,000 to the United States to settle allegations of violating the False Claims Act by paying kickbacks for prescription referrals. The settlement was announced by Acting U.S. Attorney and Special Attorney Alina Habba.
According to settlement documents, Andrew Do owned and operated three mail-order pharmacies in Orange County from January 2016 through December 2020. Authorities allege that Do paid kickbacks to receive prescriptions for compounded topical creams, filled those prescriptions, and then billed Medicare for reimbursement. The government claims Do knew these payments violated the Anti-Kickback Statute and resulted in false claims submitted to Medicare.
The settlement amount is based on Do’s financial disclosures and his inability to pay more.
Part of the settlement resolves allegations brought under the whistleblower provisions of the False Claims Act against one of Do’s pharmacies. Under this law, private individuals can file actions on behalf of the United States and may receive a portion of any recovery. In this case, relator Daniel Toellner will receive up to $100,000 from the settlement involving Family Care Investments d/b/a Value Pharmacy.
Acting U.S. Attorney and Special Attorney Habba credited special agents from both the U.S. Department of Health and Human Services Office of Inspector General and the Defense Criminal Investigative Service with conducting the investigation.
Assistant U.S. Attorney David V. Simunovich represented the government in this matter.
"The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477)," said officials.
The government noted that these are allegations only; there has been no determination of liability.
The qui tam case is captioned United States ex rel. Toellner v. Apogee Bio-Pharm Corp., et al., Civil Action No. 18-13640 (D.N.J.).
