Texas Company Settles Kickback Claims For Prison Contracts

DALLAS (AP) — A Texas-based company has agreed to pay the U.S. government almost $2.5 million to settle allegations that it obtained inside information to gain an advantage in bidding for federal prison contracts.

The Justice Department announced the settlement Monday with Integrated Medical Solutions Inc. and its former president, Jerry Heftler.

The settlement resolves accusations that IMS violated the False Claims Act and Anti-Kickback Act by paying Cary Hudson, a former business administrator with the U.S. Bureau of Prisons, to serve as a consultant in return for confidential information that gave the company an unfair advantage in the bidding process.

In 2014, Hudson pleaded guilty to submitting false documents to a U.S. agency for not disclosing payments from IMS and not reporting a conflict of interest.