Orange County supervisors are scheduled this week to grant a welfare management contract to a well-connected firm that was sued by the federal government for aiding an alleged Medicaid fraud scheme.

The firm has contributed directly to the campaign accounts of all county supervisors.

Virginia-based Maximus, Inc. was sued by federal prosecutors for allegedly helping Washington, D.C. city officials defraud Medicaid out of millions of dollars intended for foster children services.

The alleged scheme stretched all the way up to a Maximus vice president, prosecutors said.

The company ultimately settled the suit in 2007 for more than $30 million, deferring any criminal prosecution in the process.

Maximus was also the focus of controversy in California, where in 2010 it was revealed that positive drug and alcohol test results for more than 140 medical professionals were improperly discarded by a sub-subcontractor to the firm.

Maximus was paid $2.5 million per year by the state to run its alcohol and drug diversion program, and had subcontracted its drug testing to a Pennsylvania company, which in turn subcontracted to a firm in Kansas.

A state audit that year “found that Maximus does not always report positive drug tests to the appropriate board in a timely manner, meaning healthcare professionals can keep working even after positive tests,” according to the Los Angeles Times.

“The audit also found that in more than half the cases reviewed, Maximus did not keep enough records that established that substance-abusing healthcare professionals were complying with all terms of the program,” according to the report.

Following a bidding process in 2011, Orange County supervisors awarded Maximus a $4.9-million per year contract to provide case management for the county’s welfare-to-work program.

Maximus is slated to receive a new three-year contract Tuesday at an annual cost of $6.3 million.

Campaign records show Maximus as a generous contributor to all five county leaders scheduled to vote on its contract.

The company gave a maxed-out $1,700 contribution to Supervisor Janet Nguyen in August 2009, as well as $1,700 to Supervisor Pat Bates’ campaign in 2010.

Supervisor Todd Spitzer’s campaign received $1,800 from the firm in 2011, while Supervisor John Moorlach received a $1,000 contribution in 2011 and another $800 the following year.

For supervisors’ Chairman Shawn Nelson, records show a $1,700 contribution in April 2010, another $1,700 in September 2010 and $1,800 in late June 2011.

Correction: A previous version of this story incorrectly identified the federal program that Maximus was accused of defrauding, which is Medicaid.

You can reach Nick Gerda at, and follow him on Twitter: @nicholasgerda.

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