Northern California Record

Monday, January 20, 2020

Government settles $2.6 M whistleblower suit against sleep clinics

By John Severance | Mar 16, 2017

Law money 10

SAN FRANCISCO — A chain of sleep clinics agreed to pay $2.6 million to settle the U.S. government’s accusation that it made false Medicare claims over a 15-year period.

The U.S. attorney suit, which was brought against Bay Sleep Clinic in South Bay, followed a private suit by a former employee filed in 2012. Bay Sleep Clinic technician Elma Dresser will receive about $545,000 under the federal whistleblower act, according to a report on

Dresser was represented by attorneys Jessica Moore, Eric Havian, Anne Hayes Hartman, Hallie Nocker and Sarah Poppy Alexander of Constantine Cannon, a practice based in San Francisco.

"It's rewarding to see the alleged fraudsters held responsible. Because of the close cooperation and work between the whistleblower and the government, we were able to recover significant funds for the government," Hayes Hartman said in a news release. "It is gratifying to represent people like Elma Dresser, who bravely stepped forward with knowledge of her employer's wrongdoing. Many do not appreciate the risks whistleblowers face to hold alleged wrongdoers accountable."

The company owns 20 clinics in Northern California that treat patients with sleep disorders. According to the suit, the clinic’s owners and operators, Anooshiravan Mostowfipour, 58, and Tara Nader, 58, had billed Medicare going back to April 2002 for sleep tests by technicians who did not have the needed certification.

According to the news release, the lawsuit “alleged that the defendants fraudulently billed Medicare for sleep studies conducted by unlicensed individuals in unapproved locations; improperly dispensed durable medical equipment from unapproved locations using unlicensed technicians; and paid doctors for referrals in violation of the federal Anti-Kickback Statute.” The company's owners did not admit to or deny liability.

Michael Khouri, a lawyer for the owners, said in the report they “continue to deny any wrongdoing. The case was settled because my clients believe in spending their time making money rather than litigating in the courthouse.”

The settlement was announced by the U.S. government on Dec. 28 and as part of the settlements, the owners are not allowed to make any Medicare claims for three years.

Dresser had worked at the clinic for eight years as a sleep technician and marketer. Through her various roles at the company, Dresser gained knowledge of the defendants' alleged plan to defraud Medicare. After she filed her suit, the government investigated the claims and took part in the case.

“Sleep studies are a quickly expanding medical field," Moore said in the news release. "Ensuring the safety of these procedures should be a top priority of the government for all patients, Medicare and otherwise."

Under the federal False Claims Act, whistleblowers can sue companies that are defrauding the government as well as earn a reward should the government recover any funds during the process.

“Medicare patients expect to be treated by properly credentialed health-care professionals in approved locations,” U.S. Attorney Brian Stretch said in a statement, according to

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U.S. Department of Justice