Attorneys from Waters Kraus Paul & Siegel have secured a recovery for three whistleblowers who exposed massive fraud within the Texas Medicaid program. On December 19, 2024, a Texas district court judge ordered the State of Texas to pay the three their rightful portion of a record $212.3 million settlement resulting from their allegations of Medicaid fraud against Xerox State Healthcare, LLC.

The order by District Court Judge Maya Guerra Gamble awards whistleblowers Alexandra Alvarez, Joshua LaFountain, and Dr. Christine Ellis, D.D.S., 17.5% of the settlement, amounting to approximately $37.1 million, plus interest. It is the latest development in litigation that has spanned more than 10 years.

“We are disappointed that the State has sought for years to avoid paying these whistleblowers their mandated share of the settlement, but we are grateful that they are a step closer to justice,” said Waters Kraus Paul & Siegel partner Caitlyn Silhan. “As the Court’s order acknowledges, their important fight to expose Medicaid fraud ultimately led to a massive recovery of funds for Texas taxpayers.”

The dispute stems from allegations of Medicaid fraud against Xerox State Healthcare, LLC (formerly known as ACS State Healthcare, LLC). In 2012, the three whistleblowers filed lawsuits under the Texas Medicaid Fraud Prevention Act (TMFPA, known as

the Texas Health Care Program Fraud Prevention Act), alleging that unqualified Xerox personnel had improperly approved orthodontic services for Medicaid recipients without verifying medical necessity.

The order was covered by the Austin American-Statesman and Texas Lawyer.

What is the False Claims Act?

The False Claims Act (FCA) is a federal law that allows private citizens to sue on behalf of the government to recover funds lost due to fraud. Known as “qui tam” lawsuits, these cases play a crucial role in combating fraud against state health programs, like Medicaid, the child health plan, and Healthy Texas Women program. Whistleblowers who successfully expose fraud under the act are entitled to a portion of the recovered funds.

The Texas Attorney General’s office initially intervened in the whistleblowers’ lawsuits and later filed its own lawsuit mirroring the whistleblowers’ allegations. However, after reaching a $212.3 million settlement with Xerox in 2019, the Texas Attorney General’s office refused to pay the whistleblowers their rightful share.

Despite numerous obstacles and delays, the whistleblowers and their legal team persevered. Their efforts not only resulted in a significant financial recovery for Texas taxpayers but also helped to protect the integrity of the Medicaid program.

“I am thankful to my legal team for their dedication to this lengthy process and for the Court’s decision to protect my and my fellow whistleblowers’ legal rights,” said Dr. Ellis, a Dallas-area orthodontist.

Prior to filing her 2012 whistleblower lawsuit, Dr. Ellis spent years trying to halt the Medicaid fraud and abuse she witnessed in Texas. She testified before a U.S. congressional committee about alleged Medicaid fraud by Texas dentists and corporate dental chains, and repeatedly reported her allegations of fraud by Xerox directly to the state.

The case is In Re: State of Texas v. Xerox Corporation, et al. Settlement Proceeds, Cause No. D-1-GN-19-004849. In addition to Ms. Silhan, the whistleblowers were represented by Waters Kraus Paul & Siegel partner Charles Siegel, James Moriarty of the Law Offices of James R. Moriarty in Houston, and James “Rusty” Tucker of the Law Offices of James R. Tucker in Dallas.

How Do We Fight Fraud Against the Government? 

Seek justice on behalf of taxpayers with the help of our experienced attorneys. Our Dallas, Texas, whistleblower team has battled corporate giants for 20 years, aggressively fighting to hold corporations, individuals, and other entities accountable for fraud committed against the government. If you believe you have a whistleblower case, we can help.