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Nature of Suit Code: 375
Nature of Suit: False Claims Act
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 23-7171 September Term, 2024

 FILED ON: NOVEMBER 22, 2024 

UNITED STATES OF AMERICA, EX REL. THOMAS BAILEY, 

AND

THOMAS BAILEY, 

APPELLANT

v. 

VETERANS MEDICAL TRANSCRIPTION SERVICES, INC., ET AL., 

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:20-cv-02312) 

Before: MILLETT, KATSAS and WALKER, Circuit Judges

J U D G M E N T

We considered this appeal on the record before the United States District Court for the District 

of Columbia and the briefs of the parties. See Fed. R. App. P. 34(a)(2); D.C. Cir. R. 34(j). We 

fully considered the issues and determined that a published opinion is unnecessary. See D.C. Cir. 

R. 36(d). It is

ORDERED AND ADJUDGED that the district court’s dismissal with prejudice be 

AFFIRMED. 

* * * 

Thomas Bailey brought a qui tam action under the False Claims Act against two medical 

transcription companies (Veterans Medical Transcription Services, Inc. and Stone Network, Inc.) 

and those companies’ owners and officers (Steven Rose, Michael Dortch, David Bradford, and 

Sinnappan Mani). Bailey alleged that the Defendants fraudulently secured government contracts 

by misrepresenting Veterans Medical as a service-disabled veteran-owned small business, and that 

Veterans Medical is “affiliated” with Stone Network. Bailey brought three claims — two for 

underlying violations of the False Claims Act (Counts 1 and 2), and one for conspiracy (Count 3).

USCA Case #23-7171 Document #2086132 Filed: 11/22/2024 Page 1 of 3
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Counts 1 and 2 allege fraud and therefore must satisfy Rule 9(b)’s “particularity”

requirement. Fed. R. Civ. P. 9(b) (“In alleging fraud or mistake, a party must state with 

particularity the circumstances constituting fraud or mistake.”). In layman’s terms, Bailey must 

plead the who, what, when, and where of the alleged fraud. United States ex rel. Shea v. Cellco 

Partnership, 863 F.3d 923, 936 (D.C. Cir. 2017) (“Together, Rules 8 and 9(b) require a plaintiff 

to plead the time, place, and content of the fraud and to identify the individuals allegedly 

involved.”).

Bailey failed to plead Counts 1 and 2 with sufficient particularity.

For starters, Bailey repeatedly refers to the “Defendants” collectively without indicating 

which actions each individual defendant took. He does not say who made which 

misrepresentations — or who submitted which fraudulent claims to the United States. By not 

pleading answers to these questions, the complaint “fails to identify with specificity who precisely 

was involved in the fraudulent activity.” See United States ex rel. Williams v. Martin-Baker 

Aircraft Co., 389 F.3d 1251, 1257 (D.C. Cir. 2004). 

In addition, Bailey asserts that the alleged fraud occurred in “specifically identified contracts 

set forth in Exhibit 2.” Appellant Br. at 18. But Exhibit 2 merely contains a 3,518-line table of 

contracts, fewer than 10% of which involve Veterans Medical at all. Even after removing the nonVeterans Medical contracts, Exhibit 2 still would not provide an accurate list of allegedly 

fraudulent contracts. This is evident, for example, because many of the Veterans Medical contracts

in Exhibit 2 predate the alleged fraud in this case. All this leaves the Defendants no choice but to 

guess which contracts Bailey thinks are fraudulent — exactly what the particularity requirement 

seeks to prevent. 

The conspiracy claim (Count 3) fares no better. To state a claim for conspiracy under the 

False Claims Act, Bailey must “establish an underlying FCA violation.” United States ex rel. 

Kasowitz Benson Torres LLP v. BASF Corp., 929 F.3d 721, 728 (D.C. Cir. 2019). For the reasons 

discussed above, Bailey has not adequately pleaded an underlying False Claims Act violation. So 

his conspiracy claim fails.

Finally, Bailey challenges the district court’s dismissal of his complaint with prejudice. When 

“an amendment would be futile,” a district court may dismiss a case with prejudice for failure to 

state a claim. Givens v. Bowser, 111 F.4th 117, 123 (D.C. Cir. 2024). Bailey never submitted a

proposed amended complaint; nor did he tell the district court what facts he would add. The only 

additional facts Bailey supplied were in his opposition to the motions to dismiss — namely, that 

Veterans Medical assumed a $400,000 loan as part of the transaction to sell the company to Rose, 

Bradford, and Dortch, and that those three new owners agreed to make “$10,000 monthly 

payments going forward” to an unspecified recipient.

Bailey did not acknowledge that these facts were missing from his complaint, and he did not 

state that he wanted to add them. In any event, including these facts in an amended complaint 

would not cure the lack of particularity discussed above. Accordingly, an amendment would be 

futile. 

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For these reasons, we AFFIRM the district court.

* * * 

 This disposition is unpublished. See D.C. Cir. R. 36(d). We direct the Clerk to withhold this 

mandate until seven days after the resolution of a timely petition for panel or en banc

rehearing. See Fed. R. App. P. 41(b); D.C. Cir. R. 41(a)(1). 

Per Curiam

FOR THE COURT:

Mark J. Langer, Clerk 

BY: /s/

Daniel J. Reidy

Deputy Clerk 

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