Three North Texas cab company executives, their companies, and their affiliates have agreed to pay the U.S. $1.125 million to resolve allegations made in a False Claims Act lawsuit filed by whistleblowers who accused the defendants of Medicaid fraud.
According to the U.S. Attorney for the Eastern District of Texas, the settlement resolves a portion of a lawsuit filed under the whistleblower provisions of the False Claims Act by Robert Spence, Mike Jones, and Cheryl Jones – all former employees of Yellow Cab and its parent company Irving Holdings Inc.
Yellow Cab contracted with Medicare and Medicaid to provide non-emergency medical transportation services to beneficiaries who couldn’t get to a hospital or clinic any other way.
The plaintiffs accused their former employer, its executives, and affiliates of failing to comply with Medicaid regulations in virtually every claim they submitted to the government for reimbursement.
The lawsuit claims the company had a policy of fining drivers who changed the price of their trips or had patients sign false trip logs, yet even when the executives levied such fines, they never reported the illegal activity to the Centers for Medicare and Medicaid Services as required by law.
According to the lawsuit, Yellow Cab often would be reimbursed by Medicaid for the same claim multiple times, yet when these errors were reported to the company, Yellow Cab’s CFO and comptroller would deposit the money anyway in the company’s account, saying that it was the state’s loss if it was “too stupid” to realize its accounting errors.
The whistleblowers also claimed that driver fraud was rampant among Yellow Cab and its affiliated companies, and that Yellow Cab prepared false financial statements.
Each of the whistleblowers claims he or she was fired in retaliation for calling out Yellow Cabs’ fraudulent business practices, which if proven would constitute violations of federal whistleblower protections. That part of the lawsuit has not been settled.
“The public is besieged by fraud, guile, and recklessness every single day,” U.S. Attorney John Bales said in a statement. “Our office will not tolerate the mistreatment of taxpayer money, whether by corporations or individuals.”
The three former employees will share a whistleblower award of $202,500 for their role in exposing the fraud.