Business Crimes Hotline

The government's complaint alleged that RehabCare's policies set unrealistic financial goals and it had a practice of scheduling therapy to achieve the highest reimbursement level regardless of the clinical needs of its patients. These polices and practices resulted in Rehabcare providing unreasonable and unnecessary services to Medicare patients and led its SNF customers to submit artificially and improperly inflated bills to Medicare that included those services.

The case was initiated by two former RehabCare employees, a physical therapist/former rehabilitation manager and an occupational therapist, under the qui tam or whistleblower provisions of the FCA. The whistleblowers will split nearly $24 million as their share of the recovery from RehabCare.

WASHINGTON, DC

Leodan Privatbank AG Reaches Resolution Under Swiss Bank Program

On Jan. 25, 2015, the DOJ announced that Leodan Privatbank AG (Leodan), previously known as PHZ Privat- und Handelsbank Z rich AG, reached a resolution under DOJ's Swiss Bank Program. The program, announced in August 2013, provides a path for Swiss banks to resolve potential tax-related criminal offenses in connection with undeclared U.S.-related accounts. To participate in the program, eligible Swiss banks were required to advise the DOJ by Dec. 31, 2013, that they had a reason to believe that they had committed a qualifying offense. Banks already under criminal investigation, as well as all individuals, were expressly excluded from participating in the program. The Swiss Bank Program has six main requirements that financial institutions must satisfy to earn a non-prosecution agreement (NPA), as follows: 1) Make a complete disclosure of cross-border activities; 2) Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest; 3) Cooperate in treaty requests for account information; 4) Provide detailed information regarding other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed; 5) Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and 6) Pay appropriate penalties.

Leodan, which is organized as a corporation owned by private shareholders, is a small private bank that commenced business in September 2009 with a focus on asset management. Its business encompassed advisory, brokerage and custodial services, for private and institutional clients. According to Leodan's NPA, until June 2013, it had conducted a U.S. cross-border banking business that aided and assisted certain of its U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the U.S. government. During the period since Aug. 1, 2008, Leodan held a total of 44 U.S.-related accounts, which included both declared and undeclared accounts. These accounts had an aggregate peak of approximately $59.42 million in assets under management.

According to the terms of Leodan's NPA, Leodan agreed to pay a penalty of $500,000, cooperate in any related criminal or civil proceedings, and demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts. In addition, Leodan mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. The NPA noted that additional U.S. accountholders at Leodan who had not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program.

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