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July 21, 2014 Contractor Fraud

Relocation Service Pays Hefty Sum to Settle False Claims Act Allegations

Fraud can occur in virtually any industry – and it takes courageous private citizens to come forward, ultimately exposing fraud to authorities and alerting taxpayers as the misconduct being perpetrated in even the most unlikely of sectors.

In a recent settlement under the False Claims Act, Re/Max Allegiance Relocation Service agreed to pay over $500,000 to settle fraud allegations involving its home relocation services. The agreement occurred following a whistleblower lawsuit filed several years ago in U.S. District Court in Virginia by a relator with firsthand knowledge of the misconduct. The relator is set to receive $86,667 for his willingness to come forward.

Facts of Case Involving Re/Max Allegiance Relocation

The federal government has historically offered transfer assistance for families asked to relocate due to a change in duty station assignment. These services are contracted to private moving companies, such as Re/Max Allegiance, on the premise the company will offer an affordable rate and will not overcharge the government for the relocation of government workers’ families and belongings.

According to relator Michael Angel, a former employee of Re/Max Allegiance, his company was unlawfully overbilling the federal government for these relocation services in violation of a long-held agreement to offer the government a relocation rate comparable to rates offered to other entities. More specifically, the allegations include the assertion that Re/Max billed for vague “management services” that were not actually provided. In addition, the relator contends Re/Max billed the U.S. government for tariff charges that were not actually applicable to the international transfers.

Government’s Response

Despite the government spending significant amounts of time and resources combatting healthcare fraud, it has not turned a blind eye to the occurrence of fraud in other areas. According to Assistant U.S. Attorney Stuart F. Delery, “[t]oday’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government do so legally and honestly, and that taxpayer funds are not misused….Government contractors who seek to profit at the expense of taxpayers will be held accountable.”

False Claims Act

The False Claims Act is a statute – in force since the Civil War era – that seeks to incentivize integrity by offering private individuals rewards for coming forward. Today, the FCA is most helpful in the context of healthcare and defense contractor fraud, however it has proven useful in even the most obscure cases of misconduct.

The most common type of misconduct addressed by the FCA involves billing the government for services never rendered, or billing the government at a higher rate for a service than that billed to other parties. In the context of healthcare, this practice is referred to as “upcoding,” and involves submitting bills to Medicare or Medicaid that do not accurately reflect the doctor-patient interaction that occurred.

Contact an Experienced Qui Tam Attorney Today

If you are aware of fraud involving government-insured patients, or in any other transaction involving government funds, we encourage you to contact Berger Montague today.