Tuesday, May 31, 2005

Boeing employees file whistleblower suit

Three Boeing employees have filed a False Claims Act suit, alleging that the plane maker
installed defective parts in a range of aircraft and tried to cover up their use. The parts were supplied by Ducommun Inc., a longtime Los Angeles-area aircraft parts maker. The whistleblower employees claim that Boeing was aware of the problems but tried to cover them up.

Among the planes affected were ones delivered to the U.S. Air Force and Navy, as well as foreign military forces in Japan and Italy between March 1998 and November 2004. The employees, members of a Boeing audit team, contend that the parts did not conform to Federal Aviation Administration requirements.

The Los Angeles Times (subscription required) reported on the suit on May 28, 2005.

Whistleblowers can proceed with Utah highway suit

A federal district court judge has ruled that two whistleblowers have alleged sufficient facts to go forward with their suit aginst Wasatch Constructors. The suit claims that the consortium of construction companies violated the False Claims Act by providing substandard materials and workmanship on a 17-mile corridor of I-15 in Utah.

The whistleblowers provided facts regarding compromised concrete, bridge construction defects and inadequate compaction of fill materials in the $1.59 billion project.

The judge did dismiss some claims, including allegations that contractors failed to properly weigh trucks carrying the material and that Wasatch diverted materials from an ongoing railroad project to the freeway construction.

The story was reported in the May 28, 2005 edition of the Deseret Morning News.

Monday, May 30, 2005

Whistleblower lawsuit claims Caremark Rx defrauded Medicaid

The federal government and four states have joined a whistleblower lawsuit alleging that Caremark Rx, a pharmacy benefits manager, unlawfully avoided repaying Medicaid for drugs it should have covered itself.

The four states who have joined the suit are Texas, Tennessee, Florida and Arkansas.

Under the False Claims Act, the government may recover up to three times the amount it was defrauded. In this case the government claims the single damages amounted to hundreds of millions of dollars annually.

The Street.com reported on developments on May 27, 2005

Saturday, May 28, 2005

Mayo Clinic pays $6.5 million to settle research grant fraud allegations

The Mayo Clinic has paid $6.5 million to settle allegations that it misspent millions of dollars in federal research grants over more than a decade.

The whistleblower suit was brought by a former accounting associate at the clinic, who will receive $1.3 million for her role in exposing the fraud. Her suit, filed under the federal False Claims Act, alleged that Mayo shifted millions of dollars away from federal research projects to cover other expenses.

The Mayo Clinic gets about $100 million a year in federal grants, mostly from the National Institutes of Health.

The Star Tribune reported on the settlement on May 27, 2005.

Saturday, May 21, 2005

Mayor signs New York City false claims act

Mayor Michael Bloomberg signed legislation designed to protect New York City from fraud. The legistlation requires the creation of civil penalties and a private right of action for false or fraudulent claims against the City of New York.

The new law was modeled on the federal False Claims Act. The mayor said that the city loses millions of dollars every year in false medical, payroll and construction claims and that the new legislation will enable the city to recover monetary damages from those who file fraudulent claims for payment of city funds and to recover the extensive costs necessary to protect taxpayers against such fraud.

Mayor Bloomberg issued a press release on May 19, 2005.

Friday, May 20, 2005

Lawsuit claims oncologists defrauded Medicare

A whistle-blower lawsuit claims that Oncology and Hematology Associates of Southwest Virginia submitted false claims to the federal government.

The government has intervened in support of some of the allegations, but because most of the documents remain sealed it is not clear which allegations the government is pursuing. The whistle-blowers allegations includes charges that certain doctors were not present during the administration of chemotherapy and/or drugs as they were required to be under law; certain doctors committed fraud by instructing nurses to automatically draw blood and order lab tests that were billed to federal health care systems; and certain doctors would bill the federal government excessively for the services that were actually performed.

The suit contends that out of about $15 million per year the practice billed to federally funded programs, $6 million per year was fraudulent.

The Roanoke Times & World News (subscription required) reported on developments on May 18, 2005.

OfficeMax will pay $9.8 million in settlement of qui tam suit

OfficeMax, Inc. has agreed to pay the United States $9.8 million in settlement of a False Claims Act case alleging that it sold federal agencies office supply products manufactured in countries not permitted by the Trade Agreements Act. The company was required under its contract with the General Services Administration (GSA) to prevent such items from being offered for sale to U.S. government agencies.

The case was filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private parties who discover fraud against the government to file an action on behalf of the United States and to receive a portion of the settlement or recovery. The whistleblowers in this suit will receive $1.47 million.

The Dept. of Justice issued a press release on May 19, 2005.

Thursday, May 19, 2005

Illinois paving company settles asphalt overbilling suit

Curran Contracting, an Ilinois road builder, will pay $500, 000 to the federal government to settle allegations that it overstated the amount of asphalt material delivered to federally funded state road projects.

The firm has been under investigation for four years as a result of a former employee who filed a whistleblower lawsuit in U.S. District Court in Chicago. In 2002 the firm paid the state a $750,000 settlement the state on Chicago-area resurfacing projects.

The Chicago Tribune's story ran on May 18, 2005.

Wednesday, May 18, 2005

University of Miami settles Medicaid suit

The U.S. government said it has recovered $3.89 million from the University Of Mimai on behalf of Medicare and the state Medicaid program as the result of a suit filed by a whistleblower.

The lawsuit alleged UM double-billed and overcharged Medicaid through several of its outpatient clinics. "Under the false or fraudulent billing scheme outlined in the complaint, both the University of Miami and its outpatient clinics billed Medicaid under their respective provider numbers for the same covered services provided to the same recipients on the same date," the state said.

The South Florida Business Journal (subscription required) ran a May 17, 2005 story on the settlement.

Saturday, May 14, 2005

Oracle pays $8 million in settlement of whistleblower suit

Oracle has paid $8 million to settle a qui tam lawsuit that claimed the company charged the government for computer training which was never provided. The federal False Claims Act's qui tam provision allows whistleblowers who discover fraud against the government to file suit on the government's behalf. In this case, a former vice president of the company's Oracle University training division contacted the government about what he said were potentially fraudulent billing practices.

Specifically, the suit claimed that Oracle pre-billed the government for certain training that it never provided and failed to comply with travel regulations in billing for expenses.

San Jose Business Journal (subscription required) reported the settlement on May 13, 2005.

Friday, May 06, 2005

Diabetes Self Care accused of Medicare fraud

A former employee has accused Diabetes Self Care of Medicare fraud of at least $45 million.

The Roanoke, Virginia, company was sold in 2004 to CCS Medical of Florida by its former parent Matria.

Matria is also being investigated by federal authorities.

Diabetes Self Care was a mail-order company, supplying glucose monitors, test strips and other supplies to customers. The whistle-blower claimed that the company had about 65,000 customers in its database, but that another 15,000 people who had died were still being sent supplies. She claims the companies cost taxpayers millions through "fraud, waste, mismanagement and gross negligence."

The Roanoke Times & World News ran a May 4, 2005 story on the suit.

Monday, May 02, 2005

Feds allege wheelchair store defrauded government

The U.S. Dept. of Justice has filed a suit against a Texas company, alleging it violated the False Claims Act by steering customers toward power wheelchars, rather than less expensive scooters.

The suit, filed in San Antonio federal court, claims the Scooter Store engaged in a marketing campaign targeting Medicare beneficiaries. The company assured them Medicaire would pay for the scooters but then told potential customers that Medicare would only pay for a much more expensive power wheelchair or that a physician would not approve the order for a motorized scooter.

The suit does not specify damages, but the Scooter Store has billed Medicare for more than $400 million since 1997.

The Pittsburgh Post-Gazette reported on the suit on April 30, 2005.