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Feds intervene in False Claims Act case involving Texas company

Profit sharing or bribery?

Well, that depends on who is being asked the question.

If it's the president of a company that regularly handed over money to another business pursuant to its contractual relationship with the latter entity, such arrangement was akin to merely returning a share of the profit garnered, which equated to "a standard and legal practice in the industry."

If, conversely, the opinion of federal regulators and prosecutors is being solicited, the response is a resounding charge that returned monies were kickbacks paid as a privilege of doing business, and nothing more. As such, claim federal spokespersons, the money paid (and other unlawful actions) worked a fraud under the U.S. False Claims Act.

Although the details of a business arrangement between the East Texas Medical Center (ETMC) and the Emergency Medical Services Authority (EMSA) might seem a bit complex at first glance, what government authorities allege is actually quite simple.

And that is this: The two companies colluded, with ETMC regularly paying kickbacks through a subsidiary supplying ambulance services to EMSA in order to retain a monopoly position vis a vis would-be competitors. Reportedly, ETMC paid EMSA in excess of $20 million to keep the contract intact.

And EMSA, further contends a complaint filed by the U.S. government recently as intervenor in an FCA case first brought by a so-called whistleblower relator, committed fraud upon American taxpayers by submitting false Medicare and Medicaid claims amounting to more than $100 million.

Federal officials joined a portion of the underlying case last Monday.

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