Opinion

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

EASTERN DIVISION

UNITED STATES OF AMERICA, )

)

Plaintiff, )

)

v. ) CIVIL CASE NO. 3:26-cv-46-ECM

) [WO]

NEW LIFE CENTER FOR CHANGE, )

INC. d/b/a TEEN UNIVERSITY, et al., )

)

Defendants. )

MEMORANDUM OPINION and ORDER

Plaintiff, the United States of America, and Defendants, New Life Center for

Change, Inc. d/b/a Teen University and Alfonza Smith, jointly move for entry of a consent

judgment. (Doc. 15). Upon consideration, and for good cause, the Court finds the motion

is due to be granted.

I. BACKGROUND

The Government alleges as follows: Teen University operates a residential group

home for adolescent males. (Doc. 1 at 2, para. 2). It contracted with the Alabama

Department of Human Resources “to provide room, board, and services to children with

moderate emotional and/or behavioral management problems.” (Id. at 2, para. 4). As part

of that arrangement, Teen University agreed to provide two hours of individual Basic

Living Skills, or “BLS,” sessions for each resident every day, as well as an additional hour

of daily group BLS sessions. (Id. at 1–3, paras. 1, 5). While Teen University certified that

it had provided these sessions (and accordingly billed Medicaid for the sessions as services

rendered), it “did not provide the majority of the BLS services it certified.” (Id. at 3, paras.

5–6). Worse still, Teen University then manufactured “false BLS notes” to support its

fraudulent Medicaid claims. (Id. at 3, para. 7). Though Smith, Teen University’s chief

executive officer, “became aware that Medicaid had overpaid Teen University,” he did not

conduct an internal investigation, nor did he direct Teen University to repay Medicaid. (Id.

at 4, 17, paras. 10, 63).

The Government initiated this action on January 21, 2026, alleging violations of the

False Claims Act (Counts One, Two, and Three), unjust enrichment (Count Four), and

Payment by Mistake (Count Five). (Id. at 17–21, paras. 65–88). The parties filed a joint

motion for a consent decree the following day. (Doc. 6). The Court denied that motion

without prejudice because it did “not cite any authority or include any analysis articulating

why the entry of the proposed consent judgment is proper.” (Doc. 7 at 1). The parties

subsequently filed a renewed motion for a consent decree, (doc. 8), which was denied

without prejudice because the Court found its terms unworkable, (doc. 13).

The parties’ third motion for a consent decree is now before the Court. (Doc. 15).

That motion contains a proposed consent decree providing for entry of judgment in favor

of the Government against Defendants in the amount of $300,000. (Id. at 6). Defendants

would be jointly and severally liable for that debt, which will be included in the “Treasury

Offset Program (‘TOP’) so that any federal monies owed to Defendants will be credited to

the outstanding debt.” (Id. at 7). The consent decree also proposes a schedule of six

$50,000 payments, under which Defendants’ debt would be discharged by

December 30, 2030. (Id.).

II. JURISDICTION AND VENUE

The Court has original subject matter jurisdiction over the False Claims Act claims

under 28 U.S.C. §§ 1331 and 1345, and supplemental jurisdiction over the state law claims

under 28 U.S.C. § 1367. Personal jurisdiction and venue are uncontested, and the Court

concludes that venue properly lies in the Middle District of Alabama. See 28 U.S.C. § 1391.

III. LEGAL STANDARD

“District courts should approve consent decrees so long as they are not

unconstitutional, unlawful, unreasonable, or contrary to public policy.” Stovall v. City of

Cocoa, 117 F.3d 1238, 1240 (11th Cir. 1997). While a consent decree “is predicated on

consent of the parties, the judge must not give it perfunctory approval.” Id. at 1242

(quotation omitted). “Instead, a court must find ‘that the proposal represents a reasonable

factual and legal determination based on the facts of record, whether established by

evidence, affidavit, or stipulation.’” United States v. City of Tampa, 739 F. Supp. 3d 1055,

1063 (M.D. Fla. 2024) (quoting Stovall, 117 F.3d at 1242).1 To determine whether a

consent decree is unreasonable, a court must “ascertain whether it represent[s] a reasonable

factual and legal determination based on the record.” Howard v. McLucas, 871 F.2d 1000,

1008 (11th Cir. 1989).

IV. DISCUSSION

After a thorough review of the record in this case, the Court finds the proposed

consent decree is fair and reasonable. “Fairness incorporates both procedural and

1 Here and elsewhere the Court cites nonprecedential authority. While the Court recognizes that these cases

are not binding, the Court finds them persuasive.

substantive components.” United States v. Telluride Co., 849 F. Supp. 1400, 1402 (D. Colo.

1994). Normally, a fair agreement “is the product of good-faith negotiations, reflects the

opinions of experienced counsel, and takes into account the possible risks involved in

litigation if the settlement is not approved.” United States v. Georgia-Pacific Corp., 960 F.

Supp. 298, 299 (N.D. Ga. 1996). Here, the complaint is well-pleaded and includes

examples of false claims that were presented to, and paid for by, Medicaid. (Doc. 1 at 14–

16, paras. 60–61). The parties represent that the proposed $300,000 judgment fairly

compensates the Government for the harm Defendants caused, recognizes Defendants’

cooperation with the Government, and is “based on the certified financial information

provided by” Defendants. (Doc. 15 at 2). And the proposed schedule of repayments would

ensure that the Government is repaid within five years. (Id. at 7). Indeed, the parties

stipulated that “the Consent Judgment is a product of good-faith negotiations, reflecting

the [p]arties’ careful and informed assessment of the relative merits of each other’s claims

while considering the costs and risks associated with litigating the case.” (Id. at 2). For

these reasons, the Court determines that the proposed consent decree is fair and reasonable.

The consent decree is also lawful. The Government clearly has authority to litigate

alleged False Claims Act violations. See 31 U.S.C. § 3730(a) (“If the Attorney General

finds that a person has violated or is violating section 3729, the Attorney General may

bring a civil action under this section against the person.”). And the relief sought—

compensatory damages—is plainly authorized for such violations. See 31 U.S.C.

§ 3729(a). Thus, the Court finds the terms of the proposed consent decree lawful, too.

Finally, the proposed consent decree aligns with public policy. The purpose of the

False Claims Act is to deter and punish fraud against the Government. See United States

ex rel. Polansky v. Exec. Health Res., Inc., 599 U.S. 419, 423 (2023) (“The FCA dates to

the Civil War, when a Congressional committee uncovered stupendous abuses in the sale

of provisions and munitions to the War Department. . . . To put a stop to the plunder—and

more generally, to protect the funds and property of the Government—Congress enacted

the FCA.” (quotations omitted)). The proposed consent decree furthers that purpose—it

permits the Government to recover funds paid out on claims that were fraudulently

submitted.

Because the proposed consent decree is fair, reasonable, lawful, and not adverse to

public policy, the parties’ joint motion is due to be granted.

V. CONCLUSION

For the reasons stated, and for good cause, it is

ORDERED that the parties’ joint motion for entry of a consent judgment (doc. 15)

is GRANTED. The terms set forth by the parties in their proposed consent order (doc. 15

at 4–9) are ADOPTED herein.2

A final judgment will be entered in accordance with the Court’s Order.

2 Under the terms of the proposed consent decree, Defendants agreed to make their first payment on or

before June 1, 2026. (Doc. 15 at 7). If necessary, the parties are permitted to choose an alternate date on

which Defendants shall make their first payment without further Court intervention. However, that

alternate date must be prior to December 30, 2026, and all other payment dates agreed to by the parties in

the proposed consent decree remain in force.

DONE this 18th day of June, 2026.

/s/ Emily C. Marks

EMILY C. MARKS

UNITED STATES DISTRICT JUDGE