Thursday, October 25, 2007

DOJ claims Cell Therapeutics whistleblower planned fraud

In what qui tam lawyers say is an unusual development, the whistleblower who exposed a fraudulent drug marketing scheme at Cell Therapeutics may receive nothing as his relator's share.

Justice Department officials content that James Marchese was a planner or initiator of the very scheme he exposed. Although according to the October 25, 2007 article in the New York Times, the Justice Department has not indicted him for his alleged actions, they argue that he is not entitled to any relator's share.

We had reported on the Cell Therapeutics settlement on April 19, 2007.

Tuesday, October 23, 2007

Medicare fraud said to be growing in Florida

Reuters reports that in an October 22, 2007 posting that Medicare fraud is a growing problem in Florida.

The article says that one Miami-area medical equipment supplier repeatedly billed the government for the same wheelchair, resulting in a cost to Medicare of $5 million.

South Florida's 2006 Medicare tab for HIV/AIDS drugs was 80 percent of the national total, even though only 10 percent of eligible HIV/AIDS patients live there.

The U.S. Attorney for the Southern District of Florida, Alex Acosta, spoke to Reuters about his office's efforts to combat Medicare fraud schemes, which may be rivaling drug trafficking as the crime of choice in the area.

Monday, October 22, 2007

Qui tam suit alleging flood insurance fraud is dismissed

A whistleblower suit alleging overbilling of the National Flood Insurance Program was dismissed by a federal judge in New Orleans. Judge Peter Beer said that the allegations in the suit brought by Branch Consulting had already been cited in another suit brought by two former State Farm Fire & Casualty Co. insurance claims managers in Mississippi (the Rigsby suit). The False Claims Act prohibits a whistleblower from bringing a suit based on the facts underlying a pending qui tam action.

According to an October 17, 2007 posting at the Times Picayune website, the Rigsby suit was filed in April 2006 and the Branch suit was filed in August 2006, but people learned about the Branch suit first because it was unsealed in May and the Rigsby suit wasn't unsealed until this summer. We had reported on that suit when it was unsealed.

Wednesday, October 03, 2007

Detroit airport contractor settles FCA suit

A Detroit contractor who gave cash and gifts to an airport official to obtain $30 million in airport contracts has agreed to pay the United States $1.5 million to settle a False Claims Act suit.

The suit was filed under the qui tam provisions of the Act by whistleblowers who discovered the fraud. They blew the whistle on Frank Vallecorsa and his company, American International Inc., after discovering that Vallecorsa had accelerated his airport contract so he could overcharge Detroit Metro Airport and the Federal Aviation Administration.

According to a September 29, 2007 article in the Detroit Free Press, Vallecorsa also agreed to lifetime ban on receiving federal contracts.

NY AG charges home care operator with Medicaid fraud

A home care agency operator in New York State has been charged with Medicaid fraud in a criminal suit. A civil suit against the operator has also been filed under the state's new False Claims Act.

The suits allege that Charles Zizi submitted claims to Medicaid for services that were not provided, inflating hours of service of the nurses he employed and billing for maximum authorized services rather than actual services rendered.

The developments were detailed in an October 1, 2007 press release from Attorney General Andrew Cuomo.

Interior OIG issues report on FCA allegations

The Inspector General for the U.S. Dept. of the Interior has issued a report on problems in the oil and gas royalty programs.

The report, issued on September 17, 2007, is titled Minerals Management Service: False Claims Allegations.

The transmittal letter says that the report "chronicles a series of events that led to the filing of multiple qui tam, or false claims, lawsuits by employees and former employees of the Minerals Management Service (MMS)."

A September 26, 2007 article in the New York Times said that the report offered a sharp description of failures at the MMS and that it suggested that the agency was too cozy with oil companies and that internal critics had good reason to fear punishment.