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Date: 08-01-2023

Case Style:

United States of America v. BestCare Laboratory Services, L.L.C.

Case Number: 4:08cv2441

Judge: Lynn N. Hughes

Court: United States District Court for the Southern District of Texas (Harris County)

Plaintiff's Attorney: United States Attorney’s Office in Houston

Susan J Arenella, Office Of The Attorney General

Mitchell Reed Kreindler

Melissa Neiman

Defendant's Attorney: Eric J R Nichols

Description: Houston, Texas qui tam defense lawyer represented Defendant charged with violating the False Claims Act.

BestCare Laboratory Services LLC (BestCare), a now defunct Texas-based company that operated as a clinical laboratory, and its owner and founder, Karim A. Maghareh, have agreed to pay an additional $5.7 million to settle an outstanding False Claims Act judgment against them. The judgment was entered in 2018 after a court found that BestCare knowingly submitted false claims to Medicare, as directed by Maghareh, by billing for travel allowance reimbursements that did not reflect the mileage that lab technicians had actually traveled when they collected specimens from nursing home residents in Texas.

The settlement announced today is designed to resolve BestCare and Maghareh’s outstanding obligation under the 2018 judgment. The settlement provides for payments totaling $5.7 million and the possibility of additional annual payments for five years based on Maghareh’s future income. These payments are in addition to $789,652 that the United States has already collected since 2018. The settlement amount is based on the Justice Department's ability-to-pay policy.

The original lawsuit was filed in 2008 by Richard Drummond under the qui tam, or whistleblower, provisions of the False Claims Act. The qui tam provisions allow private parties, called “relators,” to sue on behalf of the United States individuals or companies they believe have knowingly submitted false claims for government funds. Relators are entitled to receive 15 to 25 percent of any recovery if the United States intervenes in the suit, as it did here in 2011. As part of this settlement, the relator will receive $1,311,000.

“Health care providers that submit inflated reimbursement claims to Medicare waste funds intended to ensure access to vital medical services,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates the department’s resolve to ensure that those who defraud the taxpayers are held accountable.”

“When the greedy manipulate the Medicare system, it affects us all, especially the elderly,” said U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas. “It’s a waste of resources meant to help those in need. This fraudulent scheme adversely impacted our healthcare system because of the inflated costs associated with transporting lab samples. This settlement brings to bear some economic justice, by requiring those that orchestrated the fraudulent scheme to pay for their actions.”

This settlement 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).

The resolution obtained in this matter was the result of a coordinated effort among the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section; the U.S. Attorney’s Office for the Southern District of Texas, Affirmative Civil Enforcement Section; and the Department of Health and Human Services, Office of Inspector General. The settlement was handled by Fraud Section Senior Trial Counsel Andrew A. Steinberg and Assistant U.S. Attorney Elizabeth Karpati for the Southern District of Texas.

Outcome: Defendant agreed to pay $5.7 million to settle the claims made against it.

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