U.S. Intervenes in Lawsuit Alleging Kickbacks for Ambulance Services

SHERMAN – The United States has filed a complaint intervening in an alleged kickback scheme involving a major East Texas-based healthcare provider and affiliated parties. According to a news release, the intervention is against East Texas Medical Center Regional Healthcare System, Inc.; East Texas Medical Center Regional Health Services, Inc. (together, “ETMC”); Paramedics Plus, LLC; Emergency Medical Services Authority (“EMSA”); and EMSA’s President, Herbert Stephen Williamson. The intervention alleges, among other things, violations of the False Claims Act and the Anti-Kickback Statute.

ETMC provides ambulance services outside of Texas through its for-profit subsidiary, Paramedics Plus. The United States’ complaint alleges that ETMC and Paramedics Plus entered into an illegal kickback scheme to obtain and retain a lucrative public ambulance services contract awarded by Williamson and EMSA, a public trust entity established under Oklahoma law. The United States alleges the defendants created a slush fund controlled by ETMC and Paramedics Plus that was used to pay over $20 million in kickbacks. The United States alleges the kickbacks and bribes ranged from cash payments (including at least $50,000 for Williamson’s personal benefit), political contributions, marketing expenses, and direct payments to EMSA’s contractors.

The lawsuit was originally filed in 2014 in the U.S. District Court for the Eastern District of Texas by relator Stephen Dean. Dean was employed by Paramedics Plus as Chief Operating Officer overseeing the EMSA contract. Dean’s lawsuit includes allegations against additional defendants, including other municipal entities doing business with Paramedics Plus in California, Florida, and Indiana.

Ron Schwartz, President of Paramedics Plus, issued a statement that reads, in part, “We at Paramedics Plus helped EMSA provide emergency medical services, which were independently judged to be among the best in the country. We also agreed to return a share of our profit to EMSA — a standard and legal practice in this industry — which was publicly disclosed. The whistleblower (Stephen Dean) and the federal government now say that limiting our profit and returning a portion of it back to these communities (those served by Paramedics Plus) somehow violated federal law.

“One of our most precious freedoms is the right to defend ourselves against false accusations, even when brought by the federal government. We intend to vigorously exercise that right and expect to be vindicated.”