Feds withdraw Life Care Centers CEO Preston from False Claims suit

Federal prosecutors have dropped their motion to include Life Care Centers CEO Forrest Preston from a False Claims Act lawsuit filed against the company. But legal threats to Preston still remain.

The move follows nearly three months of court hearings and challenges by attorneys for Life Care Centers, who criticized the Preston's naming in the suit in August as “puzzling,” saying the company “will not bow to government pressure.” While the motion to name Preston has been dropped, prosecutors say they have enough evidence against him to pursue a separate civil case, the Chattanooga Times Free Press reported.

“We believe it was the right thing to drop Mr. Preston from the government's lawsuit,” an attorney representing Life Care Centers said in a statement. “It would be improper to name him in another lawsuit, and we would promptly move to dismiss him from such an action.”

The lawsuit was originally filed as two whistleblower complaints against Life Care Centers in 2008, but they were not publicly released until 2012. The complaints claimed Preston benefited from alleged Medicare fraud by the company, and that he used company funds to give himself loans worth up to $50 million.

Life Care Centers was founded in 1970 by Preston, who remains the sole shareholder. The company now operates 260 senior housing and skilled nursing facilities in 28 states.