The settlements announced today resolve allegations that Conway Lakes, through File, Cleveland, Fraser, and Clear Choice, conspired to pay Dr. Krumins under a sham “medical director” agreement to induce him to illegally refer Medicare and TRICARE patients to Conway Lakes for rehabilitation services that were billed to the United States. Dr. Krumins’s settlement agreement also resolves allegations that he engaged in a similar kickback scheme with a related home health agency.
The allegations resolved by the settlement agreements were originally brought in a lawsuit filed by a former employee of Conway Lakes, Jonathan Montes de Oca, under the qui tam, or whistleblower, provisions of the False Claims Act. The Act permits private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery. Mr. Montes de Oca will receive $267,000 of the proceeds from the settlements. He is represented by Morgan and Morgan.