A medical and physical therapy provider with clinics in Austin, San Antonio, Corpus Christi, and Killeen will pay $3 million to settle civil health care fraud allegations.

Under the settlement, Union Treatment Centers will also waive claims for payment exceeding $1.6 million and be permanently excluded from participating in federal health care programs, according to the U.S. Department of Justice.

The DOJ states the settlement partially resolves a lawsuit under the False Claims Act alleging the provider perpetrated a scheme to defraud the federal workers’ compensation program (FECA program).

U.S. Attorney Richard L. Durbin, Jr. said Wednesday's settlement reflects his commitment to combating fraud in the federal health care system.

“We will use all of the tools at our disposal, including civil litigation under the False Claims Act, to ensure the integrity of federally funded programs,” Durbin Jr. said.

The FECA program is administered by the U.S. Department of Labor, Office of Workers’ Compensation Programs. The program covers close to three million federal civilian and postal employees for job-related injuries with benefits that include payment of an injured worker's medical and rehab expenses. The office uses federal funds to reimburse health care providers that treat covered workers.

Steven Grell, Special Agent in Charge, Dallas Regional, U.S. Department of Labor, Officer of Inspector General said UTC and its executives submitted false claims to the Office of Workers’ Compensation Programs under the guise that they were treating injured American workers pursuant to the Federal Employees’ Compensation Act.

“The U.S. Department of Labor’s Office of Inspector General will continue to work with our law enforcement partners to vigorously investigate medical providers who attempt to fraudulently obtain money from Department of labor Programs intended to treat injured workers,” Grell said.

Gary A. Steinberg – Deputy Director of OWCP said the compensation programs considers program integrity and fraud detection and prevention a top priority.

“We thank the law enforcement community for their investigative efforts – we also thank DOJ for their hard work in resolving this case,” Steinberg said. “This settlement sends a strong signal to providers who submit false health care claims to the government that they will be held accountable for their actions.”

UTC claimed to specialize in treating workplace injuries and marketed itself to patients covered by the FECA program – targeting in particular, unionized postal workers in Austin and San Antonio and civilian Army employees in the Corpus Christi area.

The U.S. alleged that UTC’s former CEO Garry Craighead and its COO Christine Craighead orchestrated a scheme to overcharge OWCP for services and supplies allegedly rendered to patients covered by the FECA program. Between January 1, 2009 and December 31, 2012, UTC fraudulently billed the FECA program for services it did not render; routinely overcharged for medical examinations; falsely inflated the time patients spent in therapy; and, billed for unnecessary service and supplies, according to a press release. The U.S. also accused the provider of offering, paying, soliciting, and receiving kickbacks in exchange for patient referrals.

The settlement agreement is not an admission of liability by UTC.

The settlement with UTC is part of a larger enforcement activity. Garry Craighead is currently serving a 14-year term of imprisonment as a result of his guilty plea to kickback and money laundering charges. He was ordered to pay OWCP nearly $18 million in restitution for damage he caused the FECA program. Christine Craighead is awaiting trial on conspiracy, wire fraud, kickback, and aggravated identity theft charges and her trial is set for October 30, 2017.

Christopher Combs, FBI Special Agent San Antonio Division said along with criminal prosecution, the FBI is committed to pursuing administrative and civil remedies with the United States Attorney’s Office and its partner investigative agencies to prevent, deter, and recover government losses sustained by fraud waste and abuse.

The United States Postal Service Office of the Inspector General, United States Army Criminal Investigation Command’s Major Procurement Fraud Unit, Federal Bureau of Investigation, and United States Department of Labor Office of the Inspector General conducted the investigation for the United States. Assistant United States Attorney John J. LoCurto and Auditor Jamie Cole, CPA handled the investigation for the United States Attorney’s Office.