Financial Fraud: Alice Soard And Wendell James Pay To Resolve Federal And State False Claims Act Allegations

Financial Fraud
Action for Defrauding a Program for Individuals with Developmental Disabilities Settles for Approximately $2 M

Action for Defrauding a Program for Individuals with Developmental Disabilities Settles for Approximately $2 M

SACRAMENTO, Calif. — Two Bay Area companies and the two individuals who head them will pay approximately $2 million to resolve federal and state allegations that they knowingly overbilled a program designed to serve Californians with developmental disabilities, U.S. Attorney Phillip A. Talbert announced today.

A federal lawsuit, filed by whistleblower Beverly McCaffery, contends that Alternative Learning Center, its president Alice Soard, Adult Educational Technologies Inc., and its executive director Wendell defrauded California’s Department of Developmental Services (DDS) by billing for services that were never provided. The lawsuit was brought in the Eastern District of California because the false claims were submitted to the DDS in Sacramento.

“These defendants took advantage of a government program designed to help some of our most vulnerable citizens, diverting funds over a number of years that may have been used to provide services to others in need,” said U.S. Attorney Talbert. “My office will continue to work closely with our federal and state partners to safeguard the integrity of this important program, and results like this one help accomplish that objective. We encourage anyone who has additional information about abuse of this program to come forward.”

“It is reprehensible that Adult Educational Technologies, Alternative Learning Center, Alice Soard, and Wendell James charged Medicaid for services that were never provided to developmentally disabled patients — services that were badly needed,” said Special Agent in Charge Steven J. Ryan of U.S. Department of and Human Services Office of Inspector General, San Francisco Regional Office. “Such repulsive scams, which cheat both patients and taxpayers, will not be tolerated. Thanks to our hardworking investigators and our law enforcement partners, these companies and executives will pay dearly for their heartless behavior.”

DDS administers programs that enable individuals with developmental disabilities to live in the community instead of being institutionalized. DDS contracts with nonprofit regional centers around the state, who in turn contract with “vendors,” such as Alternative Learning Center and Adult Educational Technologies Inc., who commit to provide in-home support to these individuals, including personal care and homemaking.

According to the settlement agreement, Alternative Learning Center and Adult Educational Technologies Inc. were authorized to provide services in Alameda and Contra Costa counties. It is alleged that the defendants submitted claims for for services that were never performed, fraudulently retained overpayments to which they knew they were not entitled and intentionally falsified documents to reflect services that were never actually performed in order to provide support for their false claims for payment.

The terms of the settlement require each defendant to make substantial up-front payments to the United States and California, along with additional payments over a period of time, plus . Alternative Learning Center will pay a total of $562,600, Adult Educational Technologies, Inc. will pay $322,500, Alice Soard will pay $159,400, and Wendell James will pay $107,500. Alice Soard has also agreed to sell her primary residence and remit the proceeds to the government.

The False Claims Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. Ms. McCaffery will receive a 20 percent share of all settlement proceeds paid to the United States.

This case was investigated by the United States Office of Inspector General of the U.S. Department of Health and Human Services, the , and the California Department of Justice, Office of the Attorney General, Bureau of Medi-Cal Fraud and . Assistant U.S. Attorney Colleen M. Kennedy handled the case.

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