McLaren et al v. Family and Child Services of Washington, D.C., et al


District of Columbia, dcd-1:2016-cv-00384

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8 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ____________________________________) THE UNITED STATES OF AMERICA,) THE DISTRICT OF COLUMBIA,)) ex rels.)) KIRK W. MCLAREN) 10109 Banchory Pl.) Bristow, VA 20136)) AZORA L. IRBY-MUNTASIR,) 1419 S. Street, SE) Washington, DC 20020))) Case No. Plaintiffs)) FILED UNDER SEAL v.) PURSUANT TO 31 U.S.C. § 3729, et seq.) FAMILY AND CHILD SERVICES OF) WASHINGTON, D.C. d/b/a FAMILY) MATTERS OF GREATER) DO NOT PLACE IN PRESS BOX WASHINGTON, D.C.,) DO NOT ENTER ON PACER 1509 6th St. NW) Washington, DC 20036)) TONYA JACKSON-SMALLWOOD) 11503 Little Bay Harbor Way) Spotsylvania, VA 22551)) GWENDOLYN MOSELEY-COLEMAN) 6304 Caryhurst Dr.) Fort Washington, DC 20744)) Defendants.)) 1 8 FALSE CLAIMS ACT COMPLAINT AND DEMAND FOR JURY TRIAL Qui tam Plaintiffs/Relators Kirk McLaren ("Relator McLaren") and Azora Irby-Muntasir ("Relator Muntasir") (collectively "Plaintiffs" or "Relators"), by and through their attorneys, on behalf of the United States of America and the District of Columbia complain and allege as follows: I. INTRODUCTION 1. This is an action to recover damages and civil penalties on behalf of the United States and the District of Columbia arising from false and/or fraudulent records, statements and claims made, used and/or caused to be made, used or presented by Defendants Family and Child Services of Washington, D.C. d/b/a Family Matters of Greater Washington, D.C. ("FMGW"), Tonya Jackson-Smallwood ("Defendant Smallwood"), and Gwendolyn Moseley-Coleman ("Defendant Coleman") (collectively "Defendants") in violation of the Federal False Claims Act (31 U.S.C. § 3729, et seq.) (the "FCA") and its D.C. counterpart, the District of Columbia False Claims Act (D.C. Code Ann. § 2–381.02, et seq.) (the "D.C. FCA"). 2. This action involves Defendants' false submission of claims to the Federal and Washington, D.C. Government in connection with FMGW's Mental Health Unit ("Mental Health Program"), Retired & Senior Volunteer Internship Program ("RSVP/DC") and Senior Works Program. 3. With respect to FMGW's Mental Health Program, Defendants FMGW and Smallwood engaged in a pattern of improper billing practices in order to fraudulently obtain Medicaid reimbursements based on inflated billing invoices. Specifically, FMGW (1) billed Medicaid for individual therapy sessions even though services were delivered in group sessions and (2) billed Medicaid based on incorrect social worker ratios. As a direct result of these 2 8 improper practices, federal and state health insurance programs have been caused to pay for mental health services that were never provided. 4. With respect to FMGW's RSVP/DC and Senior Works Programs, Defendants FMGW and Coleman fraudulently received federal and D.C. government funds based on false grant applications, false grant continuation applications and/or bi-annual progress reports. As a direct result of these improper practices, the federal and D.C. governments have been caused to divert funds from other legitimate senior social services programs and to pay for services that were never provided. 5. The FCA provides that any person who knowingly presents, or causes to be presented, makes, uses, or causes to be made or used, a false claim, record or statement to the government for payment or approval is liable for a civil penalty of up to $11,000 for each false claim submitted or paid, plus three times the amount of damages sustained by the government. 6. Similarly, the D.C. FCA provides that any person who knowingly presents, or causes to be presented, makes, uses, or causes to be made or used, a false claim, record or statement to the D.C. Government for payment or approval is liable for a civil penalty of up to $11,000 for each false claim submitted or paid, plus three times the amount of damages sustained by the D.C. Government. 7. Both the FCA and the D.C. FCA allow for any person having information regarding a false or fraudulent claim against the government to bring an action on behalf of themselves and the government and to share in any recovery. 8. Relators make these claims based on personal knowledge as former employees of Defendants and/or information and belief and diligent investigation including review of available documents and interviews of witnesses. 3 8 9. In addition, Relators seek recovery of damages for unlawful and retaliatory harassment and eventual termination of their employment as a result of their efforts to address the fraudulent conduct described herein. II. JURISDICTION AND VENUE 10. This Court has jurisdiction over the subject matter of this Federal False Claims Act action pursuant to 28 U.S.C. § 1331, 28 U.S.C. § 1367, and 31 U.S.C. § 3732(a), which specifically confers jurisdiction on this Court for actions brought pursuant to 31 U.S.C. §§ 3729 and 3730.1 11. This Court has personal jurisdiction over the defendants pursuant to 31 U.S.C. § 3732(a), which provides that "[a]ny action under section 3730 may be brought in any judicial district in which the defendant, or in the case of multiple defendants, any one defendant can be found, resides, transacts business or in which any act proscribed by section 3729 occurred." Section 3732(a) also authorizes nationwide service of process. 12. During the time period relevant to this Complaint, each of the Defendants resided and/or transacted business in D.C., and all of the violations of 31 U.S.C. § 3729 described herein occurred within this judicial district. 13. Venue is proper in this district because each of the Defendants can be found in, resides in, or transacted business in D.C. and a substantial part of the violations of 31 U.S.C. § 3729 described herein occurred within this judicial district. 28 U.S.C. §§ 1391(b) and 1395(a) and 31 U.S.C. § 3732(a). III. THE PARTIES 1 As the claims herein under the D.C. FCA arise from the same transaction or occurrence as the claims brought under the Federal FCA, this court has jurisdiction over the D.C. FCA claims as well. 31 U.S.C. § 3732(b). 4 8 14. Relator McLaren is a resident of Bristow, Virginia. Relator McLaren began working for the D.C. office of FMGW in October 2012 as the Chief Financial Officer ("CFO"), a position he held until he was terminated on August 26, 2014 in retaliation for raising concerns about financial improprieties at FMGW. 15. Relator Muntasir is a resident of Washington, D.C. From 2008 until 2014, Relator Muntasir was employed by the D.C. office of FGMW as the Volunteer Coordinator. Relator Muntasir was terminated in 2014 in retaliation for voicing concerns regarding the financial improprieties at FMGW. 16. Relators bring this action for violations of 31 U.S.C. §§ 3729 et seq., on behalf of themselves and the United States pursuant to 31 U.S.C. § 3730(b)(1) and on behalf of themselves and D.C. pursuant to D.C. Code §§ 2-381.01 et seq. Relators have direct and independent knowledge of the false records, statements and/or claims that Defendants submitted and caused to be submitted to Medicaid and of the fraudulent billing practices in which Defendants engaged. 17. Defendant FMGW is a non-profit organization that provides foster care, youth development programs, mental health/counseling services, and other activities for youth and seniors in the D.C. metropolitan area. FMGW was founded in 1882 and is one of the oldest, nationally accredited social service organizations in the Washington metropolitan area. FMGW administers seven social service and community programs within the District of Columbia. 18. Defendant Tonya Jackson-Smallwood is a citizen and resident of Virginia. Defendant Smallwood is the President and CEO of FMGW. Defendant Smallwood directed and participated in, or recklessly disregarded, the fraudulent conduct described herein. 19. Defendant Gwendolyn Moseley-Coleman is a citizen and resident of Maryland. Defendant Coleman is the Program Director of FMGW's RSVP/DC and Senior Works 5 8 Programs. Defendant Coleman directed and participated in, or recklessly disregarded, the fraudulent conduct described herein. IV. BACKGROUND Environment of Mismanagement, Fraud and Corruption at FMGW 20. FMGW's website features the optimistic slogan that it is "creating brighter futures for all ages." Specifically, FMGW purports to offer comfort to the most vulnerable citizens in the nation's capital by serving as "the role of 'family'" and "a support system for those that need it most at any stage of life" through the services it offers to the Greater Washington area. Under the guise of this mission, FMGW has been able to obtain funding and contracts to help those in need from the federal and D.C. governments over a period of years. 21. Unfortunately, FMGW's actual use of government funds has diverged widely from its purported mission. As early as 2011, staff at FMGW have engaged in practices to maximize and continue the flow of federal and state funds to the organization through the inflation and fabrication of data required to substantiate federal and D.C. grant funding. To evade detection of these practices, FMGW has a engaged a pattern of "losing" documents needed to support its award of government funding, especially with respect to the timesheets needed to justify the funding amounts. (Ex. 1, October 1, 2011 - September 30, 2012 Audit of FMGW by D.C. Office on Aging) 22. From October 2012 until August 26, 2014, Relator McLaren worked as the CFO of FMGW. As CFO, Relator McLaren was charged with helping to fix FMGW's financial problems relating to financial fraud and the mismanagement of funds, which was crippling FMGW's ability to help the community (including, but not limited to, the restrictions placed on the mental health clinic). From November 2008 until January 2014, Relator Muntasir was the 6 8 Volunteer Coordinator at FMGW for the RSVP/DC and Senior Works Program. In this position, she prepared the grant applications and progress reports, supervised the program volunteers and provided coordination and consultation for the volunteer functions. 23. In both of their capacities, these Relators became intimately familiar with the billing, sources of funding, and corresponding services offered by FMGW. Both Relators separately attempted to raise their disagreement with the billing and funding practices of FMGW with senior leadership in the organization, including Defendants Smallwood and Coleman. 24. However, rather than be rewarded for raising these concerns, Relator Muntasir and Relator McLaren were retaliated against and fired on or about January 2014 and August 26, 2014, respectively. Defendant Smallwood has fostered an environment of fear, isolation and retaliation among FMGW staff that challenge these behaviors and has placed in management positions individuals, such as Defendant Coleman, who perpetuate this unhealthy environment. As a result, FMGW has seen constant employee turnover and was even prohibited from taking on new patients due to violations in connection with its Mental Health clinic. At bottom, Defendant Smallwood's "leadership" has create an environment in which mismanagement, fraud and corruption has flourished. 25. Now, FMGW's former CFO and former Volunteer Coordinator file this Complaint to shed light on the corruption and fraud that has been allowed to cultivate at FMGW with respect to its Mental Health, RSVP/DC and Senior Works Programs. V. APPLICABLE LAW Claims for Reimbursement under Medicaid 7 8 26. Medicaid is a public assistance program that provides payment of medical expenses for low-income patients. Funding for Medicaid is shared between the federal and D.C. governments. 27. Title XIX of the Social Security Act, known as the Medicaid Program, authorizes federal grants to the states for Medicaid programs to provide medical assistance to persons with limited income and resources. Although Medicaid is administered on a state-by-state basis, the state programs adhere to federal guidelines. 28. State Medicaid agencies conduc