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Firm to pay $2.5 million in hospital fraud case

Wednesday, May 23, 2007
Chicago Tribune

Published COOK COUNTY -- A national supplier of medical equipment was ordered to pay Cook County more than $1.5 million and was fined an additional $1 million in federal court Tuesday for obstructing justice in a civil case stemming from a massive contract fraud at Stroger Hospital.

Siemens Medical Solutions admitted in February that it provided false testimony and withheld records from a federal judge overseeing a suit by rival GE Medical Systems. Prosecutors charged two former Siemens executives with scheming to win a $49 million diagnostic-equipment contract by setting up a sham joint-operating agreement with a minority-owned firm. Under the agreement, Siemens agreed to pay minority-owned Faustech Industries a flat fee of at least $450,000 to use the company's name to win the contract, officials said.
The former Siemens executives have admitted their guilt. The owner of the minority firm, Faust Villazan, is scheduled to plead guilty this month, according to court records.



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