Criminal Investigative Updates

CVS Pharmacy Inc., and its related corporate entities known as CVS collectively, agreed to pay $315 million to resolve allegations that they illegally filled opioid prescriptions and other controlled substances and sought payment for invalid prescriptions from federal healthcare programs in violation of the False Claims Act. The settlement resolves allegations in the government’s complaint that CVS knowingly filled prescriptions for controlled substances that lacked a legitimate medical purpose, were not valid, and/or were not issued in the usual course of professional practice. The VA OIG investigated this case with several other federal and state law enforcement agencies. 

Dr. Mark Loftis of Cushing, Oklahoma, was sentenced to 14 years in prison for his role in a years-long scheme that attempted to bilk Medicare, TRICARE, and CHAMPVA out of over $30 million for durable medical equipment that beneficiaries did not want or need. The VA OIG, HHS-OIG, FBI, and Defense Criminal Investigative Service investigated the case.

Missouri resident Venkatesh Sattaru was sentenced to more than four years in prison for his role in the forced labor of an Indian national. Sattaru, an Army veteran, exaggerated his disability to increase compensation under the VA Caregiver Support Program. Sattaru paid more than $83,000 in restitution to VA. The VA OIG, Homeland Security Investigations, and the St. Charles County Police Department investigated this case.

United States Attorney Scott E. Bradford in Portland announced the continued work of the District of Oregon’s Government Fraud Task Force, bringing together federal law enforcement agencies and inspectors general to strengthen efforts to identify, investigate, and prosecute fraud against government programs and American taxpayers. The US Attorney’s Office hosted the task force’s most recent meeting which was attended by federal prosecutors and representatives from participating agencies, including the VA OIG. The meeting focused on expanding intelligence and data sharing, developing new methods for identifying fraud, prioritizing investigative leads, and ensuring law enforcement resources are directed toward significant fraud schemes.

Thomas E. Lauer and Rebecca J. Davis pleaded guilty to one count of conspiring to commit major fraud against the United States. Both Lauer and Davis admitted that they conspired with one another and others to secure five contracts awarded to Davis’s company, the Elstner Construction Company, at the Letterkenny Army Depot in Pennsylvania. The contracts were set aside for eligible small, disadvantaged businesses participating in an SBA program aimed at their development. The total value of these contracts was over $80 million. Lauer also admitted to conspiring with others to obtain a $5.3 million contract awarded to a VA medical center in Virginia. As part of their individual plea agreements, Lauer and Davis agreed to pay restitution. The VA OIG, the DoD OIG, Army Criminal Investigation Division, and the SBA OIG investigated this case.