Thursday, February 26, 2009

U.S. joins whistleblower suit against Forest Labs

The U.S. Dept. of Justice has joined a whistleblower lawsuit alleging violations of the False Claims Act by Forest Laboratories.

The suit, which originated in complaints filed by two private citizens under the qui tam provisions of the Act, alleges that the company marketed antidepressants for unapproved pediatric uses and paid kickbacks to physicians.

The government accuses Forest of misleading doctors and consumers by failing to disclose that a medical study had determined that the drugs, Celexa and Lexapro, were ineffective for pediatric use. That study also found that the drugs could cause suicidal thoughts in children.

The complaint was filed in U.S. District Court in Massachusetts.

Thursday, February 19, 2009

U.S. joins FCA suit against drug company accused of off-label marketing

The U.S. Dept. of Justice announced that it has joined two whistleblower suits against drug manufacturer Scios Inc. and its parent company, Johnson & Johnson Inc. The suits, brought under the qui tam provisions of the False Claims Act, allege that the companies engaged in off-label marketing of the drug Natrecor.

Drug manufacturers are required to specify the intended use of a drug in their application for approval from the Food and Drug Administration. They are prohibited from promoting the use of the drug for other purposes.

Medicare does not cover drugs used for off-label uses unless such off-label use is established to be medically necessary. The suit alleges that the federal health care programs paid substantial amounts for the off-label use of Natrecor.

Tuesday, February 17, 2009

Global shipping company settles qui tam suit alleging FCA violations

APL Limited, a global shipping company, has agreed to pay $26.3 million to resolve allegations that it submitted false claims to the United States in connection with contracts to ship cargo to support U.S. troops in Iraq and Afghanistan.

A press release from the U.S. Attorney's Office for the Northern District of California and an article in the San Jose Mercury News detail the allegations. They include a charge that the company knowingly overcharged and double-billed the Department of Defense.

The suit originated as a qui tam complaint filed under the False Claims Act. The whistleblower will receive $5.2 millions as his "relator's share."

Diabetes equipment supplier faces allegations it defrauded government

Liberty Medical, a mail-order supplier of diabetes equipment based in Florida, is the subject of a qui tam suit filed under the False Claims Act, according to a report in the Palm Beach Post.

Medco Health Solutions, Liberty's parent company, disclosed in an SEC filing that it had received a subpoena from the Dept. of Health & Human Services' Inspector General.

Details of the investigation remain under seal.

AT&T unit settles FCA E-Rate suit

AT&T Technical Services Corp. has agreed to pay the United States more than $8.2 million to resolve allegations that it violated the False Claims Act in connection with the federal E-Rate program, according to a Dept. of Justice press release.

The E-Rate program is administered by the Federal Communications Commission and provides funding for needy schools and libraries to connect to and utilize the Internet. The program is funded by charges collected from telephone users.

The suit contended that AT&T-TSCO engaged in non-competitive bidding practices for E-Rate contracts, claimed and received E-Rate funds for goods and services that were ineligible for the program’s discounts, and overbilled the E-Rate program for services provided.

Thursday, February 05, 2009

Canadian company settles defective body armor allegations

Barrday Inc. and two related companies have agreed to pay the United States more than $1 million to resolve allegations that they violated the False Claims Act in connection with their role in the weaving of fabric used in the manufacture and sale of defective bullet-proof vests.

The fabric, Zylon, was used in the manufacture of bullet-proof vests sold by several companies and purchased by the federal government as well as by various state and local law enforcement agencies.

This settlement is part of a larger investigation of the use of Zylon in body armor. The United States previously settled with four other participants in the Zylon body armor industry for over $46 million and has pending lawsuits against others.

Jury finds company overcharged IRS on computer repairs

A federal jury in Baltimore has found that John Rachel and companies controlled by him are liable under the False Claims Act defrauding the IRS.

Rachel used shell companies to inflate the cost of repairing IRS laptop computers and is required to repay $428,532.

U.S. recovers $19 million from AMEC Construction Management in FCA case

AMEC Construction Management has paid the federal government over $19 million to resolve allegations of fraud, false claims and kickbacks on four General Services Administration (GSA) construction contracts.

The United States had brought suit to recover damages and penalties under the False Claims Act, the Anti-Kickback Act and common law theories for false bond reimbursement claims submitted by AMEC to the GSA and bond premium kickbacks paid by the company’s bond broker to AMEC's United Kingdom parent company.

California construction company settles FCA suit

Mercer-Fraser, a construction company based in Eureka, California, has agreed to settle a qui tam suit for $1.3 million.

The suit alleged that the company falsified information about its business type and size in order to qualify for preferences in federal construction work under the U.S. Small Business Administration's HUBZone Empowerment Contracting program.