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British Study Warns of Birth Defects from Antidepressants like ProzacProzac Health Alert - Prozac Lawsuit
In January of this year, the British Medical Journal published a study linking selective serotonin reuptake inhibitor (SSRI) antidepressant drugs such as Prozac, Paxil and Zoloft to Persistent Pulmonary Hypertension of Newborns (PPHN) in infants of mothers who took the drugs during pregnancy.
The latest study follows a warning in 2005 by the FDA and several research institutes that taking selective serotonin reuptake inhibitor antidepressant drugs like Prozac could be related to serious birth defects in infants.
The New England Journal of Medicine, Boston University, University of California at San Diego, National Birth Defects Prevention Study of Infants, University of Ulm and Aarhus University in Denmark have also warned that antidepressant drugs like Prozac can cause serious birth defects when taken during pregnancy.
False Claims Act Lawsuit Allowed to Continue Against Daytona HospitalWhistleblower attorneys representing a former hospital worker in a False Claims Act whistleblower lawsuit alleging fraud by a local hospital against the government announced last week that the case would continue after a judge’s order.
The case was filed against Daytona’s Halifax Hospital in 2009 by a former worker alleging the facility wrongfully admitted patients, overbilled for services, used improper billing codes and violated laws prohibiting kickbacks to doctors.
Originally kept under confidential seal by the government, it has recently been opened to public record.
Elin Baklid-Kunz worked for Halifax for 17 years and served as the director of physician services. She filed the lawsuit under a little-known provision of Federal law that allows ordinary citizens to sue for fraud committed on the government.
The Qui Tam provision of the False Claims Act, commonly referred to as the whistleblower law, lets individuals police for fraud against government programs by filing their own lawsuits against suspected violators and recover part of the proceeds as a reward.
The government often intervenes in False Claims Act cases after they are filed to help with the investigation and prosecution, however, it is not necessary that they do so in order to prevail.
Although the law has been in place since the Civil War, it has gained notoriety lately as a tool for fighting widespread fraud in the healthcare industry. Billions of dollars have been recovered in the past few decades with millions in rewards going to whistleblowers.
In this case, Halifax filed a motion with the judge asking that Baklid-Kunz's lawsuit be dismissed. They claimed it didn’t identify specific examples of fraud, didn’t properly allege doctor kickbacks and also that they were immune to such actions as they are supported by the state.
Federal Judge Gregory Presnell issued an order denying the dismissal, pointing out that the lawsuit specifically identified 216 patients who were improperly admitted and for whom Medicare overpaid more than $800,000 to Halifax.
Judge Presnell also rejected the argument that, because the hospital is supported in part by local property taxes and governed by some board members appointed by the governor, they are a state-run hospital immune to False Claims Act violations.
The federal government has yet to officially join in the lawsuit, but has filed a “Notice of Interest” in the case. Representatives of Halifax commented that they were surprised by the judges ruling and vowed to fight the matter in court.
Judge Orders J&J to pay $327 Million for FraudWith the widespread success of the False Claims Act at catching pharmaceutical companies cheating the government, many states are stepping up efforts to curtail fraudulent practices as well within their borders.
In a recent South Carolina trial, a well-known drug company was ordered to pay a hefty fine even without being sued in a whistleblower lawsuit. The case shows the lengths these companies will go to, however, to try to maximize profits.
The lawsuit was originally filed against Johnson & Johnson subsidiary McNeil-Janssen Pharmaceuticals under the South Carolina Trade Practices Act, which regulates unfair or deceptive commerce against consumers in the state.
Although this lawsuit was filed by the state, a False Claims Act Lawyer or Whistleblower Attorney can also assist anyone with evidence that a company is committing fraud to file a whistleblower lawsuit and recover part of the damages at a reward.
In the McNeil lawsuit, the State of South Carolina alleged that the company mismarketed its’ Risperdal antipsychosis drug by putting deceptive labels on sample boxes and sending letters to doctors touting the drug as safer and more effective than competitor’s drugs.
Judge Roger Couch chastised the company’s actions in his 17 page ruling, commenting on management’s “profit-at-all-costs” mentality which led to oversight and the deceptive marketing practices.
The letters to doctors were enough to prompt a warning from the Food and Drug Administration, but that did not stop the practice. Judge Couch ultimately fined the J & J subsidiary a total of $327 million for their actions.
The hefty fine was arrived at by charging McNeil $4,000 for every one of the 7,142 letters sent to doctors in the state, as well as $300 for each of the 509,499 sample boxes that were given out. This totaled $174.2 million for the letters and $152.8 million for the samples.
As is often the case, the drug company has admitted no fault and manipulated news of the decision to try to appear as if they are the unsuspecting victim. A representative commented that they plan to appeal the decision as the drug packaging was approved by the FDA.
Quest Diagnostics to Pay $241 million for State False Claims Act ViolationsWhistleblower attorneys and False Claims Act lawyers are applauding the recent victory of the State of California over another greedy medical company that was fleecing the government and taxpayers to increase its profits.
The California government was pursuing a whistleblower lawsuit against the largest medical diagnostics provider in the state, Quest Diagnostics, which will recover hundreds of millions of dollars falsely charged to the state’s medical support program.
While the federal False Claims Act is coming into the spotlight recently for its’ success at policing large pharmaceutical and medical supply companies and the hefty rewards paid to those who come forward with evidence as whistleblowers, many don’t know that the majority of states have similar laws.
Most of the states have a version of the False Claims Act whistleblower law which allows private citizens to file lawsuits on behalf of the government when they have evidence that a company has falsely charged the government. Also, these programs allow the whistleblower a huge reward for their efforts.
This whistleblower lawsuit was originally filed against New Jersey-based Quest Diagnostics in 2005 by the CEO of a competitor who noticed that the company was charging doctors, hospitals and clinics far less for services in order to gain their referral of Medi-Cal patients.
The allegation was that Quest gave forms of illegal kickbacks to the doctors, clinics and hospitals which cut other competitors out of the market and promised referrals for the state patients.
According to the suit, Quest then charged the California Medicaid system up to six times more than it did for other patients. The lawsuit alleged the practice went on for more than 15 years.
According to the office of the attorney general for the State, the diagnostic provider will pay $241 million to resolve the charges of wrongdoing. This marks the biggest recovery yet under the California version of the False Claims Act.
Of course, the lawyers for Quest will not acknowledge any wrongdoing as part of the settlement, but only admitted that paying the fine will allow them to put the lawsuit behind them.
On the contrary, the company has vowed to use its lobbyists in the California legislature to “clarify” state regulations on the clinical laboratory industry. We can only guess they hope to have the standards relaxed after paying such a hefty fine.
The office of the California Attorney General, fresh off the victory, said that similar cases are still going against four other companies for similar violations, including the second largest diagnostic provider in the state, LabCorp.
Whistleblower Lawsuit Filed Against St. Vincent’s Healthcare for False ChargesA Federal False Claims Act whistleblower lawsuit that was filed by a former employee against St. Vincent’s Healthcare last year was recently unsealed showing the allegations against the company.
In the lawsuit, whistleblower attorneys alleged that false charges were made against government programs for nearly a year at their St. Luke’s Hospital in Jacksonville, FL.
The False Claims Act case was filed on behalf of the Federal government by a whistleblower who worked at the facility from May to July of 2008 and claims she has evidence of the false charges.
Under the False Claims Act, or whistleblower law, individuals with evidence that fraud has been committed on the government may file lawsuits against the accused party and share in the award if the government recovers the funds.
The law, which routinely rewards whistleblowers with 15-25% of the amount recovered, has been extremely useful in the last decade at uncovering fraud committed on Medicare in the healthcare industry as well as fraud by government defense contractors.
In a False Claims Act whistleblower lawsuit, the case is sealed after filing while the government investigates the evidence and decides whether to intervene in the handling of the remainder of the case.
This case involves the alleged false billing for medical services against Medicare by St. Vincent’s after they took over operations of St. Luke’s Hospital in 2008. The facility was run by Mayo Clinic for several decades before that time under accreditation that allowed billing to Medicare and Medicaid.
According to the suit, that accreditation was transferred to a new facility operated by Mayo at the time of the sale, however, St. Vincent’s continued to utilize it to bill Medicare for services performed.
Former St. Luke’s employee BethAnne Algie filed the suit, alleging she uncovered evidence of the false charges. It is unclear at this time what amount is claimed to have been falsely charged to the government program.
Representatives for St. Vincent's claim that the company took all steps necessary to bring the facility in compliance with the requirements of the Medicare program. The company claims they were certified by ACHA in Florida.
Algie also alleges in the lawsuit that she was terminated by St. Vincent’s after bringing the reported violation to the attention of administrators. Upon unsealing the whistleblower case, the Department of Justice indicated they would not be participating in the lawsuit.
2010 Sets Record for Highest Whistleblower Lawsuit Settlements by Big PharmaWhistleblower lawyers often hear a similar misconception from people who come to them for advice on whether to file a whistleblower lawsuit: is it worth the risk of losing my career to uncover fraud that my company is committing on the government and taxpayers of the United States?
Based on the figures from 2010 showing the amount of money paid to the government by pharmaceutical companies accused of fraud and the rewards paid to those whistleblowers who turned them in, one would have to say it is worth the risk. This is especially true if you work in the pharmaceutical industry.
Based on information from those who track whistleblower settlements, pharmaceutical companies set aside over $4.5 billion in 2010 to settle whistleblower lawsuits, liability lawsuits from defective products and charges of fraud by the government. More than $2 billion of this was to settle whistleblower lawsuits and charges of fraud.
The whistleblower law, or False Claims Act, is a little-known law that has a huge effect at policing fraud against the government and taxpayers. Originally passed during the civil war to prevent fraud by military suppliers, it is now used mostly against defense contractors and medical companies who are paid in part by Medicare and Medicaid.
The whistleblower law allows any person who has evidence of a company receiving false payment from the government to file their own lawsuit and share in the award. The charges usually involve failing to provide services under a contract, charging for services that aren’t necessary, or promoting products such as drugs for uses other than what they were intended resulting in false charges to the government.
For example, GlaxoSmithKline paid $750 million last year to settle charges of substandard manufacturing of drugs which were paid for by Medicare. Drug maker AstraZeneca paid $520 million to settle charges of off-label marketing of its drug Seroquel. And Novartis paid over $422 million to settle charges of false marketing as well.
Two things are clear from last years record amounts of whistleblower lawsuit settlements: First, with whistleblowers receiving between 15% and 25% of the award amount, turning in companies that defraud the government is very lucrative; and Second, the fact that drug companies keep committing similar offenses and continue to pay record settlements must mean that they are making plenty of money from their habits.
In 2011, taxpayer watchdogs and whistleblower lawyers are hoping for even more government involvement. There have even been talks of prosecuting the executives from large companies who knowingly defraud the government, since the hefty fines aren’t deterring them.
Medical Device Co. May be Close to Settling Whistleblower LawsuitWhistleblower lawyers representing medical device company St. Jude Medical and the United States Department of Justice have indicated they may be close to resolving an outstanding False Claims Act Whistleblower lawsuit that alleges the company paid illegal kickbacks to doctors that led to increased charges to Medicare and Medicaid.
The whistleblower lawsuit was originally filed in 2006 by Charles Donigan, who previously worked for St. Jude. Donigan’s whistleblower attorneys proceeded with the investigation of the charges alone until December of 2009, when U.S. Attorneys with the Department of Justice officially joined in the suit.
Under the Qui Tam provisions of The False Claims Act, better known as the Whistleblower Law, everyday citizens with evidence that a company has falsely charged the federal government, a government program, or a state can file their own lawsuits and share in the amount recovered as a reward.
Originally enacted to combat false charges by defense contractors, the law has been used in large part against pharmaceutical and medical device companies in the past decade to recover billions of dollars falsely charged to Medicare and Medicaid. This has led to millions of dollars in rewards to whistleblowers.
In this case, Donigan claimed he had evidence that St. Jude paid kickbacks to doctors, hospitals and other healthcare providers such as tickets to sports events and free travel in order to get them to prescribe the company’s products. This allegedly led to false or inflated requests for payment to government programs.
The company continues to sharply deny the charges, labeling Donigan as a disgruntled former employee, as corporations often do to whistleblowers. However, with the support of the federal government behind the whistleblower lawsuit, they have reportedly entered into settlement negotiations to avoid ongoing litigation.
For information on filing a False Claims Act or whistleblower lawsuit, contact the whistleblowercenter.com
Whistleblower Lawsuit Leads to $13.2 Million Fine for Military Food SupplierWhistleblower attorneys last week announced the settlement of a False Claims Act Whistleblower lawsuit against military contractor American Grocers, Inc. for $13.2 million. The circumstances around the lawsuit are ironically similar to the reasons the False Claims Act was originally enacted during the Civil War.
The Qui Tam provision of the False Claims Act, or whistleblower law, is a unique law which allows everyday citizens who have evidence of fraud against our government to file lawsuits and share in the awards. In recent decades it has been an invaluable tool to help stop fraud by pharmaceutical and drug companies, medical device manufacturers, tax cheaters and those who violate SEC regulations.
However, the little known law was originally enacted by Abraham Lincoln during the Civil War to combat military suppliers furnishing Union troops with shoddy arms, aged horses and expired food. It has continued to be used against defense contractors who overcharge or cheat the government.
In the recent case against American Grocers, whistleblower Delma Pallares braved the risk of retaliation when she decided to pursue a False Claims lawsuit with evidence that the company was shipping expired or nearly-expired food products to U.S. troops stationed in the Middle East.
Working as a logistics manager for AG starting in 1986, Pallares learned of the extent of the company’s scheme and the owners involvement. Owner Samir Itani developed the plan to buy outdated food products then change expiration labels.
Whistleblower attorneys representing Pallares originally filed the whistleblower lawsuit in 2005 and spent five years working with lawyers for the Department of Justice to investigate the charges. Ultimately, the government intervened in the suit and the company and its owner were charged.
Pallares, who rejected offers to be placed in the witness protection program, will receive between 15% and 25% of the amount recovered. The Whistleblower Center commends her on her service to her country and congratulates her on her well-deserved reward.
New Law Allows Whistleblower Lawsuits for SEC ViolationsFor decades, whistleblower attorneys have been helping honest citizens earn substantial rewards by filing whistleblower lawsuits reporting fraud in the healthcare, defense and tax fraud. With the passage of a new law aimed at reforming Wall Street, whistleblowers can now be on the lookout for accounting fraud and SEC violations as well.
The traditional whistleblower law, officially known as the False Claims Act, encourages everyday citizens with evidence of companies committing fraud on our government to come forward by rewarding them with 15 to 25 percent of the amount recovered.
The law is usually targeted at healthcare or defense companies who have procured government contracts or are billing agencies such as Medicare. The False Claims Act has resulted in billions of dollars returned to the government and rewarded to whistleblowers.
The Dodd-Frank Wall Street Reform and Consumer Protection Act has a similar provision to reward whistleblowers for uncovering fraud in the securities or commodities industry. However, it is not necessary that the fraud be committed against the government.
Experts believe the law will uncover a variety of violations including accounting fraud, market manipulation, or general fraud by a company. Had it been in place earlier, it may have saved investors from the debacles at Goldman Sachs or the Bernie Madoff scams.
Rewards to those reporting evidence of securities fraud can range from 10% to 30% of the amount recovered for fraud of more than $1 million. In order to recover the greatest amount, it is recommended that you consult with a qualified whistleblower attorney before coming forward.
For questions regarding a whistleblower lawsuit, contact WhistleblowerCenter.com today.
Criminal Charges against Former GSK Executive for Fraud Cover-UpWhistleblower attorneys and False Claims Act Lawyers have been fighting fraud in the pharmaceutical industry for decades, with little change in the behavior or the top companies. In 2010 alone, companies have paid almost $4 billion to settle charges they defrauded taxpayers by falsely charging for products.
A recent decision by the Justice Deaprtment to file criminal charges against a top pharma company executive, however, may slow the trend of companies simply paying off their mistakes instead of changing behavior.
The Justice Department today announced that it has filed charges against Lauren Stevens, former in-house counsel for GlaxoSmithKline, for obstruction of justice and making false statements during a DOJ probe into allegations of off-label marketing of the company’s blockbuster drug Wellbutrin.
The original investigation stemmed from reports made by a company whistleblower that GSK had improperly marketed its drugs, resulting in False Claims made against government programs. Under the False Claims Act, or whistleblower law, individuals with evidence of fraud may file their own lawsuits and share in the proceeds.
The indictment released today charges that Stevens signed letters to the FDA that left out details and evidence of specific off-label marketing practices of GSK for Wellbutrin, despite the fact that she had been tasked with gathering this information about the company.
In her defense, Steven’s lawyer has stated that she practiced “ethical lawyering” and was acting under the advisement of a top law firm. Lawyers for the Justice Department, however, alleged that her actions went beyond acting as an advocate to the point of distorting facts.
The simple fact that the DOJ has charged a pharmaceutical executive in relation to a False Claims Act case is unprecedented and is sure to make waves in the industry.
If you have questions about a potential Pharmaceutical or Healthcare fraud case, contact WhistleblowerCenter.com today for a confidential evaluation.
Glaxo Tainted Medicine Whistleblower will get $96 MillionWhistleblower Attorneys and False Claims Act Lawyers are trying to educate those in the healthcare and pharmaceutical industry about the power they have to stop fraud against taxpayers, protect patients from dangerous drugs and medical devices, and earn huge rewards for themselves.
The recent case of a whistleblower at GlaxoSmithKline’s Puerto Rico manufacturing plant who reported the company’s unsafe drug making practices is a perfect example of how good behavior can be rewarded. For protecting patients and saving taxpayers money, she will get an astounding reward of around $96 million.
The ironic part of the case is that the whistleblower, Cheryl Eckard, tried to warn the company of the dangers several times before alerting the government, but was ignored and ultimately fired for her efforts. Whistleblower attorneys see an alarming trend of health care companies trying to silence their employees this way.
Another concern is the habits of large pharmaceutical companies who simply pay huge fines in the hundreds of millions of dollars rather than change their ways. As each new whistleblower lawsuit hits the press, False Claims Act lawyers become less convinced that the fines will keep these greedy companies from continuing their practices.
Cheryl Eckard was originally sent by GSK to their Cidra, Puerto Rico plant as a quality assurance manager in 2002 to address concerns raised in a warning letter by the FDA.The Cidra plant was GSK’s largest manufacturing facility, pumping out $5.5 billion worth of pharmaceuticals each year.
Soon after she arrived, Eckard states she noticed numerous issues such as contaminated water and air systems, overcrowded and improper storage facilities, mixing of different medication dosages and a lack of sterile machinery and storage devices for important cancer drugs.
When the Department of Justice filed its lawsuit against GSK, it also alleged the facility was producing ineffective medicine. In some cases, layers of active ingredients would split from the barrier layers of pills during manufacturing.
Eckard claimed that as a team leader, she oversaw a team of nearly 100 people tasked with addressing the safety concerns. However, when she alerted the company about the production deficiencies several times over the next few years she was ignored and eventually terminated in 2003.
In 2004, Cheryl Eckard notified the FDA about the problems and filed a whistleblower lawsuit under the Qui Tam provision of the False Claims Act. The whistleblower law allows everyday citizens to file lawsuits when they have evidence of fraud on the government, and share in the proceeds.
In order to resolve the charges of manufacturing and distributing adulterated drugs, GSK agreed to pay $750 million and pled guilty to criminal charges. The payment includes criminal fines of $150 million and a settlement of civil penalties of $600 million.
Contact us today if you have questions about a whistleblower or False Claims Act lawsuit.
Investors File Lawsuit against Board of Directors for decisions leading to $600 million Whistleblower SettlementFalse Claims Act Attorneys and Whistleblower Lawyers often represent clients who have evidence that a company or individual has committed fraud on the taxpayers and federal government by filing a Qui Tam case on their behalf. In a recent case, investors of a company turned the tables on the greedy leadership who committed the fraud.
California-based Allergan, Inc., best known as the manufacturer and seller of Botox, recently paid $600 million to settle a False Claims Act lawsuit brought by a whistleblower and the Department of Justice alleging that the company promoted off-label usage of its product and, in turn, submitted false claims to government programs.
The whistleblower lawsuit alleged that Allergan illegally offered encouragement and kickbacks to doctors in an effort to get them to prescribe Botox for uses not approved by the FDA. Allergan admitted that its marketing plan between 2000 and 2005 promoted Botox for unapproved uses such as the treatment of headaches, pains, spasticity and juvenile cerebral palsy.
Under the qui tam provision of the False Claims Act, originally enacted in the 1860s, everyday citizens with evidence that a company is falsely charging or defrauding the government can file their own lawsuit. If they prevail, they may also share in the award as a reward for their good stewardship.
Quite ironically in this case, it was an investor who filed a lawsuit against the board of directors, alleging it was their actions, decisions and acquiescence that led to the very off-label marketing plan that landed the company in hot water and cost investors $600 million to resolve the charges.
Among other claims, the investor is requesting that Allergan CEO David Pyott be required to return part of his compensation package that he earned based on the improper sales and marketing of Botox during that time.
Check back with the WhistleblowerCenter.com for further updates on this story.
Novartis to pay $237.5 million to settle False Claims Act charges by WhistleblowerFalse Claims Act attorneys announced this week that drug maker Novartis has agreed to pay $237.5 million to the Department of Justice to settle claims that it falsely overcharged the government as part of a larger settlement to resolve criminal and civil charges. The settlement is one of many recent attempts by the government to curtail abuse of federal healthcare programs by pharmaceutical and medical supply companies.
Using the False Claims Act, the government has pursued companies who defraud taxpayers by overcharging or falsely charging federal programs such as Medicare. Under the Qui Tam provision of the False Claims Act, ordinary citizens may file their own lawsuits as whistleblowers when they have evidence of fraud, and receive a substantial reward as a result.
The False Claims Act lawsuit was originally filed against Novartis by four whistleblowers alleging that the company paid illegal kickbacks to physicians and engaged in off-label marketing, both of which are prohibited under the act. The charges related to the company’s epilepsy drug, Trileptal, as well as five other drugs which the company reportedly was marketing for unapproved uses.
The lawsuit alleged that the company used fraudulent speaking engagements, advisory board payments and other gifts to pay the illegal kickbacks to healthcare professionals. It also charged that Novartis encouraged sales personnel to suggest other uses for its drugs which were not approved by the FDA.
As part of the settlement, Novartis also executed a corporate integrity agreement with the US Department of Health and Human Services requiring that it implement compliance measures like additional monitoring, auditing, training, education, reporting and disclosures for a five-year period.
Forest Pharmaceuticals Agrees to Large Fine in Whistleblower LawsuitFalse Claims Act Attorneys announced last week that Forest Pharmaceuticals, Inc., has reached an agreement with the Department of Justice to settle a False Claims Act Lawsuit and criminal charges for more than $313 million. The charges center around allegations by a whistleblower that the company submitted false claims for payment to federal health care programs for its’ drugs Levothroid, Celexa, and Lexapro. Under the qui tam provision of the False Claims Act, individuals can file lawsuits against companies when they have evidence that the companies are commiting fraud against the government. The law, which was originally enacted during the Civil War, then allows the private citizen to share in the amount recovered as a reward.
In the criminal case, Forest Pharmaceuticals had been charged with obstructing justice, distributing an unapproved new drug in interstate commerce, and distributing a misbranded drug in interstate commerce. The government alleged that they sold their drug Levothroid without full FDA approval, and marketed Celexa and Lexapro for purposes not approved by the FDA.
They agreed to pay criminal fines of $150 million and give up $14 million in assets to settle these charges.
Forest will also pay more than $149 million to resolve charges by the Department of Justice that the company violated the False Claims Act by continuing to bill patients under Medicare and other government programs for uses of the three drugs that were not authorized by the FDA. Of this amount, the whistleblowers who brought the violations to the attention of the government will receive around $14 million.
As part of the plea arrangement, Forest Laboratories will also execute a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services which ensures that the company will implement a compliance program to guard against similar violations in the future. If they do not honor the CIA they may be excluded from Federal health care programs in the future.
Hewlett Packard settles False Claims Act Whistleblower lawsuitFalse Claims Act attorneys representing the federal government, Hewlett Packard and a whistleblower last week announced the settlement of a whistleblower lawsuit that will return over $40 million to the government and taxpayers. The computer giant was charged with defrauding the government by paying illegal kickbacks and charging defective prices.
The lawsuit was originally filed by a whistleblower who was a former employee of HP. Under the Qui Tam provisions of the False Claims Act, individuals who have evidence of fraud or false charges against the government can file a suit on there own and recover part of the amount as a reward.
The whistleblower alleged that Hewlett-Packard paid kickbacks to contracted companies so that they would encourage government agencies to purchase HP products. The company also faced charges that it overcharged the General Services Administration by not providing full information in a 2002 contract.
According to last weeks announcement from the Justice Department, all charges have been settled for a total of $55 million. Based on the False Claims Act, the whistleblower could be entitled to between 15% and 25% of the recovery.
HP announced the settlement back on August 2, but had not revealed the amount. Interestingly, the company also announced on August 30 that it received a new $800 million contract with the government to supply the Air Force with computers.
Oil and Gas Companies Settle False Claims Act Whistleblower lawsuitAmerican taxpayers and Whistleblower attorneys are celebrating a recent victory which will return several million dollars to the government after the settlement of a False Claims Act lawsuit in which two energy companies were accused of cheating on royalties owed to the government from federal and Indian leases.
Former employee Harold Wright originally filed the lawsuit against Dominion Resources Inc. and Marathon Oil Corp alleging that they deflated gas earnings to avoid paying extra royalties to the government. The rather technical allegation was that the companies fraudulently charged for costs of boosting pipeline pressures, which should not have been factored into the royalty revenue.
The Qui Tam provision of the False Claims Act, originally enacted during the Civil War, allows everyday citizens to file lawsuits against companies they can prove are defrauding the government. Whats more, the law allows the government to step in to aid in prosecution, then awards the whistleblower with part of the recovery.
After the Department of Justice intervened in this case, Dominican and Marathon agreed to pay $2.2 million and $4.7 million, respectively, to settle the False Claims Act lawsuit. Companies who have been awarded government contracts are continually liable for any fraud related to contract costs or, in this case, royalties owed.
Unfortunately, the man who blew the whistle on the fraud, Harold Wright, is now deceased and did not get to witness the results of his patriotic act. As a reward, his heirs will receive his portion of the settlement, which amounts to $1.8 million.
False Claims Act Lawsuit alleges hospital paid doctors to refer Medicare patientsFalse Claims Act whistleblower attorneys recently took another step in pursuing a lawsuit on behalf of their client against a Naples, FL based hospital group over allegations that the company gave kickbacks to doctors to refer Medicare beneficiaries to their hospitals for treatment.
Under the False Claims Act, which was originally enacted during the Civil War to protect the Army from unscrupulous military supply companies, any false, inflated or fraudulent claim made on the government is illegal. Under the act, any payments or kickbacks to doctors that results in additional claims made against a government program such as Medicare are prohibited.
The Qui Tam provision of the act also allows private citizens to file lawsuits if they have evidence of False Claims, and share a portion of the reward. This whistleblower law has resulted in millions of dollars of rewards to everyday citizens.
Business interests have been relentless at trying to have the law weakened as it adds liability for bad behavior and empowers everyday employees. The law has been especially effective at uncovering fraud in the healthcare and defense industries.
The False Claims lawsuit in this case was originally filed by Michael Mastej in January of this year alleging that Naples-based Health Management Associates offered payments, free rent and vacations on private jets to doctors beginning in 2007 to encourage them to refer Medicare patients.
After being sealed during an investigation by the Department of Justice, the lawsuit was unsealed last week in a Tampa federal court. It is unclear whether the government has decided to join in the lawsuit.
Unsurprisingly, a comment by a spokesman for Health Management Associates states that there was no merit to the allegations. The company operates approximately 58 hospitals in 15 states.
Whistleblowers Awarded $1 million for Uncovering Securities FraudWhistleblower attorneys and False Claims Act lawyers often represent people who come forward with evidence about pharmaceutical and medical supply companies or defense contractors who have committed fraud on the government. Under the False Claims Act, these whisleblowers are entitled to a portion of the amount recovered for their honesty.
Few people know, however, that the False Claims Act also provides rewards for people who have evidence of Securities Fraud, Insider Trading and Tax Fraud. A couple who alerted the Securities and Exchange Commission of Insider Trading involving a hedge fund broker and two former Microsoft employees are set to receive the largest payout ever for an insider trading whistleblower.
Glen and Karen Kaiser, of Southbury, Connecticut alerted the SEC with evidence and charges of possible insider trading by Arthur Samberg, former CEO of Pequot Capital Management, as well as David Zilkha and another former Microsoft employee. The charges center around a conspiracy to commit insider trading of Microsoft securities.
Karen Kaiser reportedly learned of the fraud through her prior marriage to Zilkha. The SEC has already settled charges with Samberg and Pequot for $28 million. The case against Zilkha remains open. For helping uncover the fraud, the SEC will pay $1 million to the Kaisers.
Doctor and Hospital Employee file Whistleblower Lawsuit alleging Medicare FraudFalse Claims Act Attorneys representing two whistleblowers have filed a Qui Tam whistleblower lawsuit alleging that a well known Chicago hospital and 6 surgeons committed fraud against Medicare and Medicaid. The suit also involves a medical device maker previously charged with fraud.
The lawsuit, originally filed in 2004, centers around joint replacement surgeries performed regularly by six orthopedic surgeons at Rush University Medical Center. The suit was unsealed in March of this year after a long investigation, after which the Department of Justice reached a partially settlement with the parties. However, this new suit raises further charges.
The recent complaint was filed by the same whistleblowers, a surgeon and former director. They allege that the surgeons in question were scheduling fraudulently heavy caseloads of surgeries for which they were not actually attending, having residents perform many of the cases instead. In cases that were billed to Medicare or Medicaid, such practices are illegal under the False Claims Act.
The whistleblower lawsuit also claims that financial incentives from medical device maker Zimmer Holdings Inc. (ZMH) caused the fraudulent behavior. Zimmer, along with several other device manufacturers, paid 169.5 million in 2007 to settle charges with the Department of Justice stemming from physician incentives.
The six surgeons and the hospital have denied all charges. Under the Qui Tam provision of the False Claims Act, the whistleblowers who filed the lawsuit are entitled to recover part of any award the government recovers from the lawsuit.
Indiana Mental Hospital named in Whistleblower lawsuitFalse Claims Act Attorneys in South Bend Indiana are deciding whether to proceed with a whistleblower lawsuit filed against a mental hospital after the Department of Justice decided not to join the suit. This case underscores the importance of obtaining evidence that a company or facility has submitted false claims against the government for payment, not merely inadequate documentation.
The False Claims Act lawsuit was originally filed against Madison Center, Inc., which is a non-profit mental health facility in South Bend, Indiana, by whistleblowers Kathleen McCoy and Jean Marie Thompson, both former employees. Under the Qui Tam provision of the law, individuals may file a lawsuit on behalf of the government if they have evidence that fraud has been committed on a large scale.
The suit alleged that during the early 2000s, the hospital did not provide proper documentation to justify the amount of mental health services billed to Indiana Medicaid for the treatment of children. It also charged that the facility referred too many patients to intensive outpatient day-treatment programs for treatment of mental illness.
Originally filed in October of 2005, the suit was sealed while the DOJ investigated the charges. They indicated that the hospital was cooperative during that time. The department unsealed last week after the DOJ decided not to join in the prosecution. While the whistleblowers are still free to proceed privately in the lawsuit, it is estimated that only 5% of cases in which the government doesnt join are successful.
In a comment by their counsel, Madison indicated they were pleased with the decision by the DOJ and intended to vigorously defend the lawsuit.
Defense Contractor to pay $12.5 million to settle Whistleblower LawsuitRepresentatives of the Justice Department announced this week that defense giant Northrop Grumman has reached an agreement to pay $12.5 million to the U.S. government to settle a False Claims Act lawsuit which alleged that it submitted fraudulent charges to agencies for electrical parts.
The case began as a whistleblower lawsuit in 2006 filed by former employee Allen Davis, after he noticed Northrop wasnt complying with testing requirements set forth in a November 1998 protocol for the use of commercial parts in military systems. For his honesty, Davis will receive $2,375,000 from the settlement.
Under the Qui Tam provisions of the False Claims Act, individuals can file lawsuits on behalf of the federal government when they have evidence that a company or person is committing fraud or submitting false claims on the government. Under the law, which was originally enacted during the Civil War, the whistleblower shares in the amount recovered as an award.
By alleging that Northrop was not performing testing as required in defense contracts, the government charged that the company was falsely charging from November 1998 until the February 2007. Also, by failing to test electronic components to make sure they would stand up in the extreme temperatures required for military and space uses the company put our soldiers and astronauts at risk. The components were to be used in navigation systems for military airplanes, helicopters, submarines and space equipment.
The investigation leading to this lawsuit was prompted by a National Procurement Fraud Program enacted in 2006 by the Deputy Attorney General to help with the detection and prevention of fraud associated with national security and other government programs.
False Claims Act lawsuit filed against Oracle by WhistleblowerWhistleblower lawyers representing a former employee of Oracle Corporation have filed a lawsuit against the company alleging it fraudulently overbilled the government by tens of millions of dollars. The suit against the second largest software producer in the world was filed under the Qui Tam provision of the False Claims Act, which allows private individuals to sue for waste against the government.
The complaint was filed in federal court by former Oracle employee Paul Frascella in May of 2007. Under rules of the Act it is then confidentially sealed during an investigation period. The case was recently unsealed when the U.S. Justice Department decided to join the case against the software giant.
Since the False Claims act was altered in 1986, private citizens suing on behalf of the government have recovered billions of dollars in waste against taxpayers and have also received billions in rewards for their actions. People have called the whistleblower law the best weapon for fighting fraud against our government.
The lawsuit alleges Oracle overcharged the government by tens of millions of dollars by failing to disclose discounts that it was giving to its favorite commercial customers. Under the rules governing contracts with the General Services Administration, the government must get the companys best prices.
Frascella originally joined the company in 1997 and worked closely in negotiating contracts with the GSA.
Representatives for Oracle did not respond to requests for comment.
Heart Device Manufacturer to pay nearly $4 million to settle False Claims SuitThe Justice Department this week announced a victory for taxpayers after a medical supply company and two hospitals were forced to pay back money fraudulently claimed against federal health care programs. The settlement was based on a False Claims Act qui tam lawsuit filed by whistleblower attorneys representing someone with inside knowledge of the fraud.
Since the beginning of 2009, the False Claims Act has allowed the government to recover almost $3 billion from fraud committed by health care companies. Under the qui tam provision of the act, whistleblowers who have knowledge of fraud can file lawsuits on their own and recover a portion of the proceeds as a reward.
This case was part of a growing effort to fight fraud in the health care industry. The lawsuit alleged that St. Jude Medical Inc., a heart device manufacturer, paid kickbacks to Parma Community General Hospital and Norton Healthcare in order to gain heart device business. This in turn caused illegal claims to be submitted to federal programs such as Medicare.
As part of the award, the whistleblower who filed the False Claims Act case, Jerry Hudson, will receive $640,050.
Former Doctor who filed Whistleblower case against hospital awarded over $23 millionWhistleblower attorneys and The Department of Justice are celebrating a victory that will return over $100 million to taxpayers after a hospital charged by a former physician with defrauding the government settled its False Claims Act case.
A former cardiologist at Christ Hospital, Harry Fry, filed the lawsuit in 2003 under the Qui Tam provisions of the False Claims Act. Designed to allow everyday citizens to patrol for fraud against our government, the qui tam part of the Act allows individuals to file their own lawsuits against companies suspected of fraud and rewards them with part of the funds recovered.
The False Claims Act prohibits such incentive programs that may lead to more charges against Federal programs such as Medicare. The settlement of $110 million will pay $108 million to the Justice Department, who joined the case in 2008. Of this, $23.5 million will go to Fry as a reward. The deal will also pay $2 million for his legal fees.
Whistleblowers are usually awarded from 15 to 25 percent of the total recovery.
According to the government, the hospitals cardiology department made more than $25 million per year, its most profitable division. Although the hospital denies that there were any improper charges, the act of giving incentives to doctors makes more than 100,000 claims filed with Medicare and Medicaid illegal under the False Claims Act. Each one carries a penalty of up to $11,000.
Healthcare reform gives support to whistleblowers fighting fraudWith all the attention on the recent healthcare reform focusing on increased taxes and loss of medical autonomy, most people didnt know the Act also added strength to the False Claims Act in an attempt to help whistleblowers stop medical fraud on our government.
No matter which side youre on in the healthcare debate, saving taxpayers money is a good thing. You can now uncover and fight fraud on our government even if you come across second hand evidence that is public information.
The Qui Tam provision of the False Claims Act allows whistleblowers to help stop fraud against the federal government by filing their own lawsuits against companies cheating the government and allowing them to share in the recovery.
The Patient Protection and Affordable Care Act, which was passed under extreme scrutiny earlier this year contained an obscure section of the legislation that will allow more whistleblowers to come forward and prove these types of cases.
Before the changes made in the PPACA, False Claim Qui Tam cases could not be based on public information unless the whistleblower was the original source of the information. Companies routinely had such cases dismissed by the courts.
With the recent changes, however, whistleblowers can now use second-hand information to file their claim.
Michigan hospital pays nearly $1 million to settle False Claims lawsuitThe Department of Justice announced this week that nine hospitals from Alabama, Indiana, Florida, South Carolina, New York and Minnesota have agreed to pay $9.4 million to settle cases brought by whistleblowers alleging they violated the False Claims Act by overcharging Medicare for treatment.
The lawsuits center around a back surgery known as kyphoplasty, which is fairly routine and usually performed on an outpatient basis. At the urging of the company selling the medical supplies for the procedure, however, hospitals would admit patients overnight for the procedure in order to add more charges.
The company that marketed the medical supplies for the surgery, Kyphon, was sued in a prior False Claims Act case after whistleblowers came forward to uncover the practice. During the investigation into that case it was discovered that the hospitals were compliant in the fraud.
According to the lawyers representing the whistleblowers, the government was repaid based on the number of procedures the hospitals performed between 2000 and 2008.
Government joins Whistleblower suit against Defense ContractorA False Claims Act Qui Tam case filed by two former employees of defense contractor KBR has been joined by the federal government. This case is the latest in a series of lawsuits brought against the company which has paid more than $5 million to settle claims that it defrauded the government.
The whistleblower suit alleges KBR employees took kickbacks in the form of meals, drinks, tickets to sporting events and rounds of golf from two freight forwarding companies, EGL Inc. and Panalpina Inc.
It is not yet clear whether the alleged misdeeds or over-billing resulted in extra expense to U.S. taxpayers. KBR, which was formed by parent company Halliburton in 2006, stated that it was not aware of the violations but would cooperate with the investigation. The company also estimated the illegal gifts did not exceed $20,000.
KBR is the main food and shelter contractor in Iraq for the Pentagon, sharing in a sizeable $35 billion contract.
Last year, the company pled guilty to charges of bribing foreign officials as part of a Nigerian natural-gas plan. And paid $579 million to settle.
Pharmaceutical company settles whistleblower false claims suit for $72.5 millionLawyers representing three whistleblowers who uncovered a pharmaceutical company committing fraud on the government assisted the U.S. Attorney’s office in reaching a sizeable settlement to resolve the False Claims, it was announced this week.
The False Claims suit was filed in 2006 by former employees of biotechnology company Chiron Corp, which is owned by Swiss-based Novartis. It alleged that the company fraudulently billed federal and state government programs for unapproved uses of its cystic fibrosis drug TOBI from 2001 to 2006.
The lawsuit had been under confidential seal until the $72.5 million settlement was announced by the U.S. Attorney's office Tuesday.
The federal government will get $35.68 million from the proceeds while ten states – New York, Tennessee, Michigan, Florida, California, Illinois, Texas, Georgia, Virginia and Massachusetts - will split $29 million.
The three former employees who came forward as whistleblowers, along with their lawyers, will share in an award of $7.8 million.
Drug company AstraZeneca will pay $520 Million to Settle Whistleblower SuitThanks to whistleblower lawyers and a former pharmaceutical sales representative they represent, U.K. based drug giant AstraZeneca will pay $520 million in penalties to the U.S. government to settle charges that it fraudulently targeted children and elderly patients in selling its drug Seroquel.
The charges stem from the company selling Seroquel for off-label uses, which are those that are not approved by the Food and Drug Administration. In doing so, the company earned hundreds of millions of taxpayer money through Medicare and Medicaid kickbacks and scams.
Seroquel is designed to treat schizophrenia in patients older than 13, and bipolar disorder in patients older than 10. The FDA approved it only for short term treatment of psychotic disorders such as schizophrenia, bipolar mania and bipolar depression.
According to allegations from the government, AstraZeneca knowingly marketed the drug for several other disorders for which it had not been tested or approved such as aggression, Alzheimer's, anger management, anxiety, attention-deficit hyperactivity disorder, dementia, depression, mood disorder, post-traumatic stress disorder and sleeplessness.
The company reportedly encouraged doctors to prescribe the drug for these other uses through kickbacks and bonuses. After he refused to engage in such sales practices, sales rep James Wetta was reprimanded and eventually filed a confidential whistleblower lawsuit. He had also filed suit against drug company Eli Lilly for similar practices.
Wetta will receive more than $45 million as a reward for filing the False Claims suit. The federal government will get $302 million, and states will share up to $218 million.
Whistleblower lawsuit against CVS continues in ChicagoSeveral former employees of CVS Caremark Corp. will be allowed to continue a state False Claims Act case against the company for allegedly defrauding the state of Illinois out of tens of millions of dollars, a judge ruled last week.
The whistleblower lawsuit was originally filed in 2003 but was sealed until late last year while the government investigated the charges and attempted to negotiate a settlement with CVS. Negotiations between the two parties have since broken down.
The suit alleges that between 2002 and 2005, the company fraudulently removed labels from prescription drugs that were returned by customers in other states, then resold the medications to customers in Illinois. State law forbids such resale of prescription drugs. The alleged fraud occurred while the company handled prescription-drug benefits for 400,000 Illinois residents.
The lawsuit also charges that CVS pharmacy technicians fraudulently called state workers’ physicians’ offices and changed their prescriptions from a brand-name drugs to generics in order to cut costs. Under the contract the company had with the state at the time, it received bonuses for saving money on state workers' prescriptions.
A Circuit Court Judge last Thursday denied CVS’s motion to dismiss the lawsuit, ruling that the allegations were specific enough for the case to proceed.
CVS has denied the allegations.
L.A. company pleads guilty to making False Claims on MedicareThanks to the help of a Medicare abuse whistleblower and false claims attorneys, the owner of a medical supply company this week pled guilty to defrauding the government by submitting false claims to Medicare.
Sylvester Ijewere is the owner and operator of Los Angeles, CA based Maydads Medical Supply, a durable medical equipment company. This week he pled guilty to health care fraud after admitting he submitted almost half a million dollars in false claims to Medicare.
Between June 2007 and October 2009, Ijewere schemed with others to purchase fraudulent prescriptions and medical documents, which he used to submit false claims to Medicare for expensive, high-end power wheelchairs and other medical equipment.
Almost half of the Medicare beneficiaries Ijewere was using for the fraudulent billing lived more than 100 miles from Maydads' offices. Ijewere also admitted that he knew the beneficiaries did not need the equipment and that the doctor and beneficiary information he used to support the false claims came from fraudulent medical clinics and patient recruiters. As a result of this scheme, Ijewere submitted around $471,345 in false and fraudulent claims to Medicare.
Ijewere faces a maximum penalty of 10 years in prison and a $250,000 fine.
Exxon Mobile settles whistleblower case for more than $32 millionWhistleblower lawyers and the U.S. Department of Justice reported this week that Exxon Mobil Corporation will pay $32.2 million to the United States to settle claims that some of its divisions knowingly underpaid royalties owed on natural gas.
The case arose after a private citizen filed a False Claims lawsuit government alleging that Mobil Natural Gas Inc, Mobil Exploration & Producing U.S. Inc and affiliates underreported the value of natural gas taken from federal and American Indian leases between 1988 and 1999.
Since the reported value of the natural gas was less, the government said Mobil entities paid less in royalties to the United States and American Indian tribes than they should have.
Several other energy companies have paid more than $200 million to settle their parts of the lawsuit. The whistleblower, Harold Wright, is now deceased, therefore his estate will receive $975,000 from the settlement according to the Justice Department.
Supreme Court decision limits some whistleblower casesAlthough you would expect our government to protect a law such as the False Claims Act which polices fraud against the government, the current pro-business U.S. Supreme Court this week issued a ruling that essentially limits the way in which whistleblowers can file Qui Tam lawsuits on behalf of the government.
Based on the new ruling, it is important to have a False Claims lawyer review your case as soon as possible if you suspect fraud, since the decision prohibits the filing of lawsuits if the information is publicly available in any federal, state or local documents.
The supreme court issued the decision in a 7-2 majority Tuesday in the case of Graham County Soil and Water Conservation District et al. v. United States ex rel. Wilson determining that whistleblowers cannot file lawsuits based off of information that is already publicly available in state or local documents.
Even though attorneys for the U.S. government and the whistleblower argued that the public information restrictions should only apply to federal audits and administrative reports since the government can’t possibly monitor all state and local public documents as well, the court expanded the law to exclude cases where information is available in state and local documents.
Whistleblowers who uncover and report a false claim against the government may be entitled to a reward of 15% to 25% of any funds that the government recovers from the offenders under the qui tam provision of the False Claims Act. In order to recover, however, the whistleblower must be the first to bring the case to the government’s attention, and must not publicize the claim until the DOJ decides to prosecute the claim.
Fortunately the ruling will not affect whistleblower lawsuits brought regarding Medicare and Medicaid fraud, since language in the recently passed health care reform package dictates that state and local records are not considered public disclosures for the sake of the False Claims Act. According to Justice Stevens, the new language will only apply to future cases, however, and not lawsuits that have already been filed.
Whistleblower Legal ProtectionIn the United States, legal protections vary according to the subject matter of the case or the circumstances of the whistleblowing. The state in which the misconduct occurred may also have certain legal protections.
In 2002, when the Sarbanes-Oxley Act was passed, the Senate Judiciary Committee found that whistleblower protections were dependent on the "patchwork and vagaries" of varying state statutes. Even so, a wide range of federal and state laws protect employees who call attention to violations, help with enforcement proceedings, or refuse to obey unlawful directions.
False Claims US LawThe first U.S. law put in place specifically to protect whistleblowers was the Lloyd-La Follette Act of 1912. It guaranteed the right of federal employees to furnish information to the United States Congress without the fear of losing employment.
The first U.S. environmental law to include an employee protection was the Water Pollution Control Act of 1972, also known as the Clean Water Act. Since then many other industry specific laws have been adopted that protect whistleblowers.