The U.S. Justice Department on Wednesday moved to abandon fraud allegations against HCR ManorCare Inc., a leading national provider of nursing homes, after a judge struck a key witness and scolded prosecutors for bringing a case she described as a “waste of money.”

The government rarely walks away from big-ticket disputes, and the move to drop the False Claims Act case in Virginia against ManorCare was sure to be seen as a blemish. ManorCare faced tens of millions of dollars in liability for alleged fraud in reimbursements for unnecessary therapy services.

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