Tuesday, June 10, 2008

Government sues Honeywell for defective bulletproof vests

The Justice Department is suing Honeywell International Inc. for knowingly selling defective material for use in bulletproof vests. The suit claims that Honeywell knew that the ballistic material called Zylon Shield degraded quickly, leaving the vests unfit for use by law enforcement agencies and military personnel.

The suit was filed under the False Claims Act.

Hospice company will pay to resolve FCA suit

Home Hospice of North Texas will pay the U.S. a total of $500,000 to resolve civil False Claims Act allegations. The U.S. Attorney for the Northern District of Texas had alleged that the company and its owners violated the Act by submitting claims for unallowable items and services and by misrepresenting the conditions of patients in order to keep them in hospice.

Walgreen's settles Medicaid drug fraud allegations

Walgreen Co. has agreed to pay $35 million to settle claims that it improperly switched patients to different versions of the prescription drugs Ranitidine, Fluoxetine and Eldepryl in order to increase its reimbursement from Medicaid,.

The Dept. of Justice press release noted that this was the third settlement with a company that had engaged in improper drug switching.

The whistleblower who originally brought the suit will receive approximately $5 million as his share of the federal and state settlements. The federal share of the settlement is approximately $18.6 million. Forty-six states and Puerto Rico will share approximately $16.4 million under separate settlement agreements.

Conference on whistleblower rights

The Government Accountability Project and American University Washington College of Law are sponsoring a conference on whistleblower rights. The Emerging Era in Whistleblower Rights and the Public’s Right to Know will take place June 23, 2008 at AU Washington College of Law.

Among the topics to be covered are: restoring openness and accountability to government and corporations; the special case of national security; and the next steps toward achieving a comprehensive openness agenda.

Supreme Court rules in FCA case on subcontractor fraud

In a unanimous opinion by Justice Samuel Alioto, the U.S. Supreme Court Court raised the government’s burden of proof in subcontractor fraud suits under the False Claims Act.

In Allison Engine v. U.S. ex rel Sanders, decided on June 9, the court ruled that a plaintiff in a False Claims Act suit “must prove that the defendant intended that the false record or statement be material to the government’s decision to pay or approve the false claim.”

The Federal Times quotes a number of interested observers, some of whom welcome the clarification and others who see a difficulty in cases involving multiple layers of subcontractors, when the subcontractors may not actually present their invoices to the government.

Senator Charles Grassley has said that he intends to amend the Act to fix the problem so that there isn't a "a free fraud zone for subcontractors."