iBiomedical Company Avoids DOJ Prosecution After First Ever Voluntary Corporate Self-Disclosure of Fraud Under NSD Enforcement Policy
On May 22, the US Department of Justice (DOJ) announced that it will not prosecute a Massachusetts biomedical company, DBA MilliporeSigma, for fraudulent conduct and conspiracy, based on the factors set forth in the Department’s Principles of Federal Prosecution of Business Organizations and the National Security Division (NSD) Enforcement Policy for Business Organizations.
According to the DOJ, MilliporeSigma’s compliance personnel identified suspicious discounted product orders. MilliporeSigma retained outside counsel who voluntarily disclosed the identified misconduct to the DOJ when they “found evidence that one of its employees was diverting biochemical products to an unauthorized purchaser in China,” even though MilliporeSigma’s internal investigation was not yet complete.
The NSD Enforcement Policy creates a presumption that companies that (1) voluntarily self-disclose to NSD potentially criminal violations arising out of or relating to the enforcement of export control or sanctions laws, (2) fully cooperate, and (3) timely and appropriately remediate will generally receive a non-prosecution agreement, unless aggravating factors are present. The DOJ declined prosecution under the NSD Enforcement Policy due to MilliporeSigma’s prompt disclosure of the rogue insider and his accomplice who fraudulently diverted millions of dollars’ worth of biochemicals to China.
The Assistant Attorney General of the NSD, Matthew G. Olsen, urged companies to continue the practice of self-disclosure to avoid prosecution. He said, “[t]oday’s announcement reflects the value for companies like MilliporeSigma to quickly self-disclose potential criminal activity and reaffirms our commitment to work in partnership with the private sector to root out conduct that violates the law and jeopardizes our national security.”
The two individuals responsible for the fraudulent acts, which lasted from 2016 to 2023, each pleaded guilty to one count of wire fraud conspiracy.
Read the DOJ press release here.
New York Man Pleads Guilty to $50 Million Health Care Fraud Scheme
On April 30, a New York man, Manishkumar Patel, pleaded guilty to one count of conspiracy to commit health care fraud, one count to commit wire fraud, and one count to violate the Anti-Kickback Statute for his involvement in a multi-million dollar scheme to obtain fraudulent Medicare reimbursements.
According to court documents, from 2019 to 2022, Patel and an unnamed co-conspirator obtained Medicare beneficiary information from call centers and used the information to create unnecessary doctors’ orders for durable medical equipment, medications, and laboratory tests. These orders were sent to doctors who signed them without seeing any patients or the signatures on orders were forged. Patel allegedly sold these orders to Medicare providers who fulfilled them and subsequently charged Medicare, which resulted in $48 million in fraudulent reimbursements.
The government also alleged that Patel entered into fraudulent contracts with Medicare providers for purported marketing services, which were occasionally rejected by some Medicare beneficiaries and doctors, leading to denial of reimbursement claims. Patel faces a maximum sentence of five years and is scheduled to be sentenced in July.
The case is United States v. Patel, No. 23 Cr. 543, (S.D.N.Y. Nov. 9, 2023).
