Holiday Acquisition and Fortress Investments pay $8.86 million to settle DOJ case for submitting false claims to Veterans Affairs

The Holiday Acquisition Corp. and Fortress Investment Group, LLC (collectively Holiday) agreed to pay $8.86 million to resolve alleged False Claims Act violations for submitting false claims to the United States Department of Veterans Affairs (VA) to qualify veterans or a surviving spouse of a veteran for monthly benefits from the Aid and Attendance Program, announced U.S. Attorney Billy Williams.

The settlement resolves a lawsuit brought under the qui tam provisions of the False Claims Act by Sheila and Louis Rose, who worked as managers at several of the Holiday Retirement properties.  The Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery.  Under the civil settlement announced yesterday, Mr. and Mrs. Rose will receive approximately $1.5 million out of the federal share of the recovery.  The lawsuit is captioned United States of America ex rel. Sheila Rose and Louis Rose v. Fortress Investment Group, LLC. et al., Case Number 3:13-cv-00314-MO.

The Holiday suit alleged that the defendants violated the False Claims Act by engaging in a number of fraud schemes related to VA program benefits.  Specifically, the Relators allege that the named defendants knowingly assisted veterans or their surviving spouses in completing and submitting false claims for veteran’s benefits under the Aid and Attendance and Housebound Benefits program.  The named defendants expressly denied the allegations in the suit and did not admit any liability in reaching the settlement.

The Holiday settlement was based on a claim in the suit which alleged that false statements were made about the services provided by the defendants’ facilities which caused the VA to determine a veteran was eligible for aid and attendance benefits, when in fact, the veteran was not eligible and the benefits should not have been paid.

“Pursuing corporations who engage in fraud remains a top priority of the U.S. Attorney’s Office and the Department of Justice,” said U.S. Attorney Billy Williams.  “We are committed to holding them accountable for profiting at the expense of taxpayers and taking advantage of our nation’s veterans.”

This settlement illustrates the government’s emphasis in combating fraud and followed shortly after another settlement in a health care fraud case against Hung Viet Tran.  In March 2016, Tran paid $825,000 to resolve Medicare and Medicaid fraud claims.  The scheme involved billing for prescription drugs that he never dispensed, dispensing generic medications and billing for the more expensive brand name, and dispensing Costco brand fish oil but billing for brand name prescription Omega 3 fatty acids.  In addition to the settlement amount, Tran will also be excluded from participating in all Federal health care programs for fifteen years. The Tran settlement was a joint investigation with the U.S. Attorney’s Office for the District of Oregon and the Oregon Department of Justice – Medicaid Fraud Unit.  The state Department of Justice prosecuted the criminal case and the U.S. Attorney’s Office prosecuted and settled the civil matter.

“Nationally, losses caused by fraud amount to tens of billions of dollars every year,” said Williams. “These settlements are an example of the hard working lawyers in this office and our resolve to hold accountable those who commit fraud.  For that reason, we will work with our state and federal partners to uncover these fraudulent activities and recover those losses through the False Claims Act.”

The Holiday matter was investigated by the U.S. Attorney’s Office for the District of Oregon and the Department of Veteran’s Affairs, Office of Inspector General.

Both of these civil fraud investigations and settlements were resolved through the efforts of the Affirmative Civil Enforcement (ACE) Unit in the United States Attorney’s Office.  The ACE Unit is led by Division Chief Katie Lorenz and Assistant United States Attorney Neil J. Evans.