Friday, February 17, 2006

McKesson to pay $3 million to settle False Claims Act suit

McKesson Corp., a wholesale pharmaceutical distributor, will pay $3 million to the federal government to settle claims that it defrauded the Department of Defense. The False Claims Act suit had alleged that the company knowingly charged DoD more for pharmaceuticals than was allowable under its government prime vendor contracts.

The Dept. of Justice press release was issued on February 16, 2006

Tuesday, February 14, 2006

False Claims Act trial of alleged Iraq war profiteer to begin

A case that will test whether the federal False Claims Act applies to the conduct of contractors working in Iraq is scheduled to start on February 14.

The suit, the result of a whistle-blower complaint, alleges that Custer Battles LLC overcharged the government by inflating billings. The company was contracted to provide security at the Baghdad airport and to help guard and distribute new currency in Iraq.

A judge had ruled last summer that the whistle-blowers suit could not reach all the money paid by the Coalition Provisional Authority to Custer Battles, but must exclude the portion that came from Iraqi oil sales and international donations.

The Justice Department declined to intervene in the suit.

For more details, see the February 13, 2006 edition of the Washington Post.

Friday, February 10, 2006

Corporate Express Office Products settles False Claims Act suit

Corporate Express Office Products, a Colorado-based company, has paid the United States $5.02 million to settle a qui tam suit brought under the whistleblower provisions of the False Claims Act. The suit alleged that Corporate Express submitted false claims when it sold office supply products from countries which do not have reciprocal trade agreements with the U.S. to federal agencies.

U.S. Newswire posted a press release on February 10, 2006.

Connecticut attorney general favors state false claims act

In an article in the February 10, 2006 issue of the Hartford Courant, Richard Blumenthal, the Connecticut attorney general, suggests that a state false claims act would help restore integrity to state contracting.

"Connecticut should follow other states and the federal government in passing a false claims act that gives the state authority to recover taxpayer funds dispensed in corrupt contracts. Just this week, the president signed a new law giving states financial incentives to adopt state false-claims acts," Blumenthal writes.

Blumenthal also suggests a contract review board and reducing or revoking state pensions for corrupt state employees.

Thursday, February 09, 2006

Missouri considers state False Claims Act.

The Missouri Senate's Special Committee to Investigate Medicaid Fraud heard testimony supporting enactment of a state False Claims Act that would allow whistle-blowers to file suit on behalf of the state, and to share in the recovery.

Patrick O'Connell, chief of the Texas attorney general's civil Medicaid fraud section, said that the number of cases against Medicaid providers has jumped from two to 122 since Texas enacted a false claims act in 1997.

St. Louis Today ran a story on the hearings on February 8, 2006.

Computer company pleads guilty in E-Rate fraud case

The U.S. Dept. of Justice announced that Premio Inc. has agreed to plead guilty to fraud in the Federal E-Rate program. The company, which manufactures and sells computer equipment and software, will pay $1.7 million in criminal fines and civil restitution.

The criminal charge claimed that Premio rigged bids, substituted ineligible equipment, and submitted false documents.

The E-Rate program provides funding for Internet access and other telecommunications services to schools and libraries in financial need.

This is the latest development in the DOJ's investigation into fraud in the E-Rate program. The Department's February 6, 2006 press release has further details.

Home health care chain pays $8 million to settle FCA suit

Intrepid USA, a Minnesota-based home health care chain, has paid the United States $8 million to settle a False Claims Act suit. The suit alleged that the company overbilled overbilled three government health care programs – Medicare, Medicaid, and the military health care programs, TRICARE/CHAMPUS.

The company, which has more than 150 home health agencies, was alleged to have billed for service which were not provided by a qualified person, for services which were not properly documented, or for services which were never provided.

The U.S. Dept. of Justice press release announcing the settlement was issued on February 9, 2006.

Saturday, February 04, 2006

Hawaiian shipyard company settles False Claims Act suit

Marisco Ltd., an Oahu-based shipyard company, and Tanadgusix Corp., a native Alaskan tribal business, will pay the federal government $450,000 to settle claims that they defrauded the General Services Administration.

The two companies acquired a surplus Navy drydock under a program that allows Native American and Native Alaskan preferential rights to such equipment. The suit claimed that they were required to tow the drydock to Alaska and use it there to benefit natives of St. Paul Island. The companies contended that they intended to bring St. Paul Islanders to Hawaii to work.

An additional $800,000 will be paid to the government if $4 million earmarked as compensation to TDK in the federal budget is actually appropriated.

The Honolulu Star Bulletin and the Honolulu Advertiser ran February 4, 2006 stories on the developments.