Cyber-fraud case settlement nearly $1M

  • Published
  • By Thomas Brading
  • OSI Public Affairs

The Office of Special Investigations helped settle a cyber-fraud case that is the first of its kind, following a new Department of Justice initiative. 

Comprehensive Health Services (CHS) agreed to pay $930,000 to resolve violations of the False Claims Act for inaccurately reporting to the State Department and the Air Force that it met contract requirements for supplying medical services in Iraq and Afghanistan.

“[OSI] is undeterred in its approach to hunting down fraud within our Foreign Military Sales program and ensuring the offenders are held accountable,” said Special Agent-in-Charge Nicolas J. Groesbeck, OSI Procurement Fraud Detachment 4, Wright-Patterson Air Force Base, Ohio. “We applaud the complainant for coming forward, which allowed our joint partners to protect the government's procurement process and carry out the warfighting mission”

Under the contract, CHS claimed the cost of a secure electronic medical record system that would be used for storing all patient records and the confidential identifying information of servicemembers, diplomats, officials and contractors who worked in Iraq, the DOJ stated in a release.

However, between 2012 and 2019, the company did not consistently store records on a secure EMR system. Instead, CHS staff left copies of the medical records and identifiable information on an internal drive network available to non-clinical staff, the release continued, even after staff raised concern.

In addition, the company’s contracts with the Air Force and State Department also required them to provide medical supplies, including control substances approved by the U.S. Food and Drug Administration and European Medicines Agency, following federal quality standards.

But, between 2012 and 2019, CHS stated certain substances were approved by the FDA and EMA while lacking a Drug Enforcement Agency license necessary for exporting controlled substances from the United States to Iraq.

The company circumvented this by using their Florida-based doctors to request prescriptions from their South African physicians. From there, the South African company ordered, received and forwarded the substances, unapproved by the FDA and EMA, to CHS in Iraq.

In Iraq, CHS supplied unapproved controlled substances to patients under the Air Force and State Department contracts.

The news comes as the military moves ahead with its plan to handle cybersecurity risks.

According to the release, the investigation and its resolution underline the government's commitment to combating cyber-fraud.

“The initiative aims to hold accountable entities or individuals that put U.S. information or systems at risk by knowingly providing deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity practices or protocols, or knowingly violating obligations to monitor and report cybersecurity incidents and breaches,” the release stated.