Federal inquiry targets Reston firm

Federal authorities have begun a criminal investigation of Maximus Inc. in the wake of a lawsuit claiming that the Reston-based consulting giant overcharged the government tens of millions of dollars while working for the District’s foster care agency, unsealed court records and other official files show.

The investigation follows a federal False Claims Act lawsuit that says Maximus lacked proper documentation for most of the more than $30 million in Medicaid claims the company prepared for the D.C. government, starting in 1999.

In February, Maximus disclosed to the Securities and Exchange Commission that it had received a subpoena from the criminal division of the U.S. Department of Justice pertaining to the company’s work preparing Medicaid claims for the D.C. government. The company received more than $3 million for its work for the D.C. Child and Family Services Agency, according to the lawsuit.

Maximus has declined to comment on the focus of the investigation beyond what it disclosed to the SEC.

However, previously sealed court records show that federal authorities began a probe as far back as 2004 into claims in a 2003 lawsuit against the company by Benjamin Turner, a former employee who says Maximus fired him in 2002.

According to Mr. Turner, Maximus was hired to help the city recoup federal Medicaid funds for services for foster children in the D.C. Child and Family Services Agency (CFSA).

Under the deal, Maximus pocketed 10 cents of every Medicaid dollar it helped the city recoup, eventually netting the company more than $3 million for at least $30 million in Medicaid claims it prepared, according to the lawsuit.

Mr. Turner, who says in the lawsuit that he worked on the billing project, says the Medicaid billing was “grounded in fraud.”

“After obtaining confirmation that such services were not performed through a CFSA computer search, and in the majority of instances after contacting the social workers who confirmed the services were not performed, Maximus nevertheless created files that indicated services were performed and used such information to demand Medicaid pay for services not rendered,” the lawsuit states.

Maximus declined to comment on the substance of complaint, saying it has not been served with the lawsuit and that public records show the suit was dismissed from Alexandria federal court in June 2005.

Mr. Turner and his attorneys, the U.S. Attorney’s Office and the D.C. Office of the Attorney General also had no comment.

Within days of the lawsuit’s dismissal in Alexandria, filings in Mr. Turner’s case show that the suit was filed in D.C. federal court June 21, 2005. Records filed by Mr. Turner’s attorney, Candace McCall, show that federal authorities wanted to prosecute the case in the District.

No records of the case appear on the public docket in the District. False Claims Act complaints usually are kept under seal until dismissal or the government decides whether to take over the case, according to legal experts.

In April 2005, Justice Department attorney Diana J. Younts stated in Alexandria court filings that the government wasn’t finished investigating Mr. Turner’s case. She said authorities were unable to decide whether to intervene in the case by a court-ordered May 2, 2005, deadline.

“However, the government’s investigation will continue,” Miss Younts wrote.

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