The district court granted a motion to dismiss a qui tam complaint alleging the defendants submitted falsified timesheets to federal and state education grant programs. The relator alleged that a charter school made excessive payments to several individually named defendants, based on the submission of fraudulent timesheets, and that this resulted in the submission of false claims for reimbursement. However, the court found the complaint failed to describe when this conduct occurred, how the timesheets were fraudulent, or in what way the payments were excessive. The court also found no links between the conduct and any federal funds. While the school does receive state and federal funding, the court found no evidence that the payments to the defendants came from federal funds or that the amount of state or federal reimbursement increased due to the allegedly fraudulent timesheets.
New Horizons Community Charter School and its co-defendants moved to dismiss a qui tam complaint alleging that they received excessive payments through federal and state education grants due to the submission of fraudulent timesheets.
Relator Keesha Simmons was employed by New Horizons as a human resources coordinator. According to the relator, during the course of her employment, she became aware that New Horizons made improper payments to defendants Rhonda Wilson, Yashmine Cooper, and Tom Omwega—who were employed as chief school administrator, assistant principal, and school business administrator, respectively. The relator alleged that the individually named defendants submitted falsified timesheets, which resulted in excessive payments by New Horizons and the submission of false claims for reimbursement to the state of New Jersey and federal government.
Simmons notified her supervisors of her concerns about the payments. She also helped draft a letter to the New Jersey Department of Education complaining of the alleged falsified timesheets and resulting overpayments. According to the relator, soon after she raised her concerns, her employment was terminated.
In her complaint, the relator alleged that (1) New Horizons received both federal and state funding for their operating costs, including salaries; (2) each of the individual defendants submitted falsified time sheets to New Horizons in order to receive excessive or improper compensation; (3) she learned of this behavior during the course of her employment with New Horizons; and (4) she complained to her supervisors and drafted a letter to the New Jersey Department of Education regarding the Individual Defendants’ conduct.
The defendants moved to dismiss, arguing that the relator had not adequately stated a claim. The court agreed, first noting that the plaintiff provided no factual allegations that plausibly suggested false or fraudulent claims where submitted either to New Horizons or the government. For example, while alleging that fraud took place, the relator did not indicate when the alleged fraud took place or for how long, how the individual defendants’ timesheets were falsified, or how, as a human resources coordinator for New Horizons, she learned of the scheme. While the relator alleged that “upon information and belief” that falsified timesheets were submitted, the court found the relator had not shown how she came upon this information. Even assuming the allegations were true, the court found them conclusory, as there was no indication how the timesheets were falsified or why the remuneration would be considered excessive.
The court also concluded the relator failed to adequately allege a sufficient nexus between the alleged fraud and any government funds. While the relator noted that New Horizons receives federal funds, the court found nothing to show that the funds were used to pay the defendants’ salaries or any fraudulent claims. The relator also did not describe how New Horizons receives federal funding, what portion of its funding comes from the federal government, or how New Horizons uses that funding. The court found it unclear whether the alleged submission of falsified timesheets had any effect on the amount of funding provided by the federal government. For example, the court found no indication that the federal government provided excess funds to New Horizons, because falsified timesheets had been submitted. At best, the court found the plaintiff showed that New Horizons paid inflated sums to the individual defendants from the general operating fund, which apparently is funded in part by the federal government. The court found this fell far short of the pleading standard.
The court also dismissed the relator’s state claims, as they were premised on the same information as the federal FCA claims. The court granted the motion to dismiss the claims in full, but denied the defendants’ request for a dismissal with prejudice. The court allowed that the relator could file a leave to amend her complaint.
