Friday, January 16, 2015

Whistleblower and fraud news summary for week of January 12

Office Depot has agreed to pay more than 1,000 government entities in California $68.5 million to resolve a whistleblower lawsuit that alleged that Office Depot overcharged them for office supplies. The whistleblower, David Sherwin, represented by lead counsel Phillips & Cohen, spent years pursuing the case and died last year of cancer. (Whistleblower's efforts help thousands of California cities and schools recover $68.5 million from Office Depot)

A Michigan physician has been sentenced to 15 months in prison and $1.3 million in restitution for her role in a $2.1 million Medicare fraud scheme. Dr. Paula Williamson conspired to commit healthcare fraud by referring Medicare beneficiaries for home health care services that weren't medically necessary. (Redford Twp. doctor sent to prison for Medicare fraud)

Two Houston-area mental health clinic owners were sentenced to 148 and 120 months in prison, respectively, for paying and receiving kickbacks in a Medicare fraud scheme. The clinics billed Medicare for services that weren’t medically necessary or weren’t provided totaling $97 million, according to evidence at trial.(Physician owners of mental health clinic sentenced to $97 million Medicare fraud scheme)

Friday, January 09, 2015

Whistleblower and fraud news summary for week of January 5

Daiichi Sankyo Inc. has agreed to pay the government $39 million to settle allegations raised in several whistleblower (“qui tam”) lawsuits that the international pharmaceutical company paid kickbacks to doctors to induce them to prescribe Daiichi drugs including high blood pressure medications Azor, Benicar and Tribenzor, and the cholesterol drug Welchol. (Daiichi Sankyo Inc. Agrees to Pay $39 Million to Settle Kickback Allegations Under False Claims Act)

Easton Hospital, based in Pennsylvania, will pay the government $662,000 to resolve whistleblower allegations that the hospital violated the False Claims Act by performing procedures that were medically unnecessary or never performed. (Easton Hospital Agrees to $662K Settlement of False Claims Act Allegations)

A North Text chiropractor was sentenced to 12 years in prison and ordered to pay $2.4 million in restitution for his role in a healthcare fraud scheme. Dr. Abbas Zahedi was convicted of five counts of healthcare fraud for submitting health insurance claims to insurers for services that were never provided. Five other defendants in the case also were convicted and sentenced.  (Chiropractor Sentenced in Health Care Fraud Case)

Wednesday, December 24, 2014

Whistleblower and fraud news summary for week of December 15

Eyak Technology LLC and Eyak Services LLC have agreed to pay the government $2.5 million and relinquish rights to any additional payments from the U.S. to resolve allegations that the technology contractors submitted false claims. The subsidiaries of Eyak Corporation held a $1 billion contract with the U.S. Army Corps of Engineers during the alleged fraud which included accepting kickbacks and submitting invoices for work that was never performed. (Federal Contractors Eyak Technology LLC and Eyak Services LLC Resolve False Claims Act and Anti-Kickback Act Allegations)

Bruker Corp, based in Massachusetts, agreed to pay the government $2.4 million to settle charges that the life sciences company violated the Foreign Corrupt Practices Act by bribing Chinese officials to gain business. (SEC Charges Massachusetts-Based Scientific Instruments Manufacturer with FCPA Violations)

The Securities Docket held a webcast on Dec. 18 titled “Navigating the Minefield of Dodd-Frank’s Whistleblower Provisions and the FCPA (2014 Update)” that examined Dodd-Frank cases and the SEC whistleblower reward program. Erika Kelton, a partner at Phillips & Cohen, provided the whistleblower perspective and talked about the anti-retaliation efforts of the SEC. Ms. Kelton “noted that virtually all of the calls that her firm gets from whistle-blowers seeking representation are from employees who reporter their complains internally.” (Companies Risk SEC’s Wrath by Discouraging Whistle-blowers)

Wednesday, November 26, 2014

Whistleblower and fraud news summary for week of November 24

A New York-based doctor has agreed to pay the government $2.35 million to resolve claims that he falsely billed Medicare. Dr. Gilbert Lederman allegedly miscoded experimental cancer treatments to receive reimbursements from Medicare even though the program did not cover the treatment. Staten Island University Hospital, the hospital where Lederman performed the cancer treatments, previously paid the government $74 million to settle related civil charges. (NYC Doctor Known for Radio Ads Settles Medicare Fraud Case)

A Detroit-based surgeon, Dr. Aria Sabit, has been charged for allegedly billing millions to Medicare for spinal surgeries that were unnecessary or never performed. (Bloomfield Hills Surgeon Charged in Health Care Fraud)

A Boeing subcontractor has been sentenced to 15 months in prison and must pay a $50,000 fine for his involvement in a bribery and kickback scheme. Jeffrey Lavelle, owner and operator of J.L. Manufacturing, paid Boeing officials for information on non-public financial and bid information that led to Lavelle’s company obtaining almost $2 million in subcontracts. (Boeing Subcontractor Gets 15 Months in Kickback Case)

Three New York pharmacies and seven individuals have been indicted for their role in a $5 million Medicaid fraud scheme.  The pharmacies allegedly were paying customers for prescriptions that were then billed to Medicaid but were never filled. (A.G. Schneiderman Announces Indictment of Three Brooklyn Pharmacies, Pharmacy Owners, and Pharmacists for Alleged $5 Million Medicaid Fraud)

Friday, November 21, 2014

SEC whistleblower program continues to grow

The Securities and Exchange Commission received a record number of tips under its whistleblower-reward program in fiscal year 2014, with more than 3,600 tips from all 50 states, Washington, DC and Puerto Rico, and 60 foreign countries.

The SEC released its annual whistleblower report about the Dodd-Frank program this week, which discussed the substantial progress being made in several areas.

The SEC awarded its largest ever award, $30 million, to a whistleblower this year.  The whistleblower, represented by Phillips & Cohen, helped uncover fraud that would not have been detected without insider knowledge. In 2013, Phillips & Cohen partner Erika Kelton predicted in a Forbes.com article that the SEC whistleblower program would pick-up steam, receiving more tips and producing more awards – which the SEC report proves has happened.

Another highlight in FY2014 was the SEC’s decision to exercise its anti-retaliation authority for the first time. The SEC charged Paradigm Capital Management for retaliating against an employee who reported wrongdoing to the SEC, settling with the hedge fund advisory firm for $2.2 million. 

Whistleblower and fraud news summary for week of November 17

Sevenson Environmental Services, based in Niagara Falls, New York, agreed to pay the government $2.72 million to resolve allegations that the environmental remediation company violated the False Claims Act by accepting kickbacks in return for awarding subcontracts for work on government sites. (Sevenson Environmental Services Inc. Agrees to Pay $2.72 Million to Settle Claims of Alleged Bid-Rigging and Kickbacks)

A Miami-based chief operating officer of a psychiatric hospital pleaded guilty for his role in a $67 million Medicare fraud scheme. Christopher Gabel pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the government by receiving kickbacks. (Miami-Area Hospital Chief Operating Officer Pleads Guilty in $67 Million Mental Health Care Fraud Scheme)

Washington Gas Energy Systems will pay the government $2.5 million in fines and penalties for conspiring to commit fraud against the government. The Virginia-based energy company allegedly illegally acquired contracts meant for small, disadvantaged businesses. (Washington Gas Energy Systems to Pay $2.5 Million in Fines and Penalties for Conspiring to Obtain Federal Contracts)

Whistleblower cases help government recover almost $3 billion in FY2014

The Department of Justice recovered a record-breaking $5.69 billion under the False Claims Act for the fiscal year 2014, says a DOJ statement released Thursday.

Qui tam (whistleblower) lawsuits accounted for almost $3 billion of the total, with whistleblowers receiving $435 million in rewards.

"We acknowledge the men and women who have come forward to blow the whistle on those who would commit fraud on our government programs," said Acting Assistant Attorney General Joyce Branda.

As has been the case in other recent years, the pharma industry accounted for a substantial share of the recoveries. Global health care giant Johnson & Johnson and its subsidiaries, Janssen Pharmaceuticals and Scios (J&J), paid a total of $2.2 billion to resolve False Claims Act claims and other charges relating to the off-label marketing of prescription drugs and kickbacks to physicians and nursing homes.

Recoveries under the False Claims Act now total more than $45 billion, including more than $30 billion from qui tam cases alone.

Friday, November 14, 2014

Whistleblower and fraud news summary for week of November 10

Visiting Nurse Service (VNS), based in New York, has agreed to pay the government almost $35 million for improperly billing Medicaid programs. VNS billed Medicaid for 1,740 patients who weren’t eligible for the long-term managed care plan. (Manhattan U.S. Attorney Settles Civil Fraud Claims Against visiting Nurse Service For Obtaining Millions in Medicaid Payments by Enrolling Ineligible Individuals in Its Managed Long-Term Care Plans and for Providing Substandard Services at Social Adult Day Care Centers)

CareAll Management has agreed to pay $25 million to the US and Tennessee to resolve a whistleblower case that alleged the Nashville-based home health agency submitted false claims and upcoded healthcare billings to Medicare and Medicaid programs. This is the second time in two years that CareAll will pay a settlement to the government to resolve False Claims Act allegations. (CareAll to Pay $25 Million in Medicare Settlement)

Five Florida residents have plead guilty for their role in a $6.2 million Medicare fraud scheme. The individuals used Miami-based Professional Medical Home Health to bill Medicare for physical therapy and home health services that were not medically necessary or never provided. (Five Florida Residents Plead Guilty for Roles in $6 Million Miami Health Care Fraud Scheme)

Vascular Solutions and its CEO, Howard Root, were charged this week for selling unapproved varicose vein treatments and conspiring to defraud the government by concealing sales of the product. The indictment comes after warnings form the FDA, failed clinical trials and complaints by a whistleblower to the CEO. (Vascular Solutions Inc. and its CEO Charged with Selling Unapproved Medical Devices and Conspiring to Defraud the United States)

Thursday, November 06, 2014

Whistleblower and fraud news summary for week of November 3

New York Superintendent of financial Services Benjamin Lawsky is considering using independent monitors to deter banks and other firms from bad behavior even for those firms that haven’t gotten into legal trouble. Lawsky wants to focus first on “high-risk” international transactions that could facilitate money laundering schemes, in addition to countries that are subject to US sanctions. (Regulator Wants Greater Use of Bank Monitors)

Slovakia has introduced a new whistleblower program that will allow whistleblowers who step forward with information about secret cartel agreements to be financially rewarded. The new program is looking to specifically target the cartel’s in Slovakia which are becoming increasingly harder to uncover. (Slovak Republic: New Whistleblower Rules In Competition Law Financially Reward Whistleblowers)

A Miami-based home health care owner was sentenced to 80 months in prison this week for her role in a $74 million Medicare fraud scheme. Elsa Ruiz pleaded guilty to conspiracy to commit health care fraud for falsely billing Medicare for physical therapy services that were medically unnecessary or not provided. (Owner and Administrator of Two Miami Home Health Companies Sentence to 80 Months in Prison for $74 Million Fraud Scheme)

Bio-Rad Laboratories, based in California, has agreed to pay the government $55 million to settle allegations that the medical diagnostic and research company violated the Foreign Corrupt Practices Act by bribing Russian officials to win government contracts. (Bio-Rad to Pay $55 Million to Settle Foreign Corruption Charges)

Friday, October 31, 2014

Whistleblower and fraud news summary for week of October 27

Dignity Health, a San Francisco-based hospital chain formerly known as Catholic Healthcare West, has agreed to pay the government $37 million to settle allegations that 13 of its hospitals overcharged Medicare and TRICARE for unnecessary inpatient services that could have been done on a less costly and safe outpatient basis. (Dignity Health Agrees to Pay $37 Million to Settle False Claims Act Allegations)

A Detroit-area physical therapist assistant was sentenced to 50 months in prison for his role in a $14.9 million Medicare fraud scheme. Jigar Patel and his co-conspirators billed Medicare for services that were never provided and prescribed unnecessary painkillers and narcotics to patients to induce them to sign the false bills. (Detroit-Area Home Health Care Assistant Sentenced for Scheme to Bill Medicare Nearly $15 Million for Services Not Provided)

The medical device company Biomet Companies has settled with the government for more than $6 million over allegations that the company gave kickbacks to doctors who used its bone-growth stimulators. (Biomet Inks $6M Deal to Settle Kickback Charges)