Monday, August 23, 2010

New York Times comments on amended False Claims Act

This month's New York False Claims Act amendment has received attention from the New York Times blogger Nicholas Confessore, who notes that that the new law could “sharply expand investigations of wealthy tax cheats by empowering whistle-blowers to file law suits against them.”

Confessore points out that this expansion on the Act, which previously focused on Medicaid fraud or fraud committed by government contractors, will allow the Act to be used in the recovery of monies withheld from the government through fraudulent tax statements. The bill states that this will apply “only when the net income or sales of the defendant total $1 million or more and the damages pleaded in the action exceed $350,000.”

The amended Act continues to allot a portion of any awarded damages to the whistleblower, who is afforded new protections under the Act. As with all types of fraud covered under the Act, damages are calculated at three times the amount of the fraud.

Friday, August 20, 2010

Florida hits benchmark for fraud control, obtains permission for pilot fraud control program

Florida Attorney General Bill McCollum announced today that his Medicaid Fraud Control unit has recovered over $400 since 2007, following numerous investigations into the activities of various individuals, companies, and hospitals suspected of intentionally defrauding the state’s Medicaid program.

Attorney General McCollum has also recently obtained approval for a pilot program that will allow the state to prevent Medicaid fraud more proactively. Although federal law typically prohibits states from routinely mining data from Medicaid providers, the pilot program gives the state permission to actively review the billing practices of such entities, allowing for fraud to be more easily identified.

“Medicaid fraud is a heartless crime that drains away resources intended for our citizens who need medical assistance,” said Attorney General McCollum. “Every single dollar we recover benefits not only those citizens, but also the Florida taxpayers who have funded the Medicaid program.”

Energy companies to pay $6.9 million in settlement of whistleblower case

A case filed under the False Claims Act has resulted in the payment of $6.9 million to the United States by energy companies Dominion Oklahoma Texas Exploration & Production Inc. and Marathon Oil Company, for their failure to pay in full royalties on natural gas produced on federal and Indian leases.

Tony West, Assistant Attorney General for the Civil Division of the Department of Justice, clarified his department’s commitment to “protecting public and Indian lands and to ensuring that companies with leases to take natural gas from those lands pay their fair share of royalties."

The qui tam law suit was filed by whistleblower Harold Wright under the False Claims Act. As he is deceased, his heirs will receive his share of the settlement, $1.822 million.

Thursday, August 19, 2010

Indiana Attorney General urges potential whistleblowers to come forward

Indiana Attorney General Greg Zoeller is encouraging those with knowledge of fraud in the health care and pharmaceutical industries to come forward and act as whistleblowers, by reminding workers in those fields that they can collect a portion of the damages and simultaneously prevent further waste of tax dollars.

Zoeller cited as an example an ongoing case, which the State of Indiana joined in June of 2010, against the South Bend mental health services facility Madison Center. The State is alleging $10 million in overbilling to Medicaid through fraudulent claims. Zoeller points to the words of Jean Marie Thompson, a whistleblower in that case, who said, “Filing a case pursuant to the False Claims Act was a lifesaver. It is a path to take when all else fails.”

Phillips and Cohen attorney for the Madison case Colette Matzzie stated of Indiana’s decision to join the case that “The Attorney General is to be commended for his efforts to recoup the millions of dollars in Medicaid funds that Madison Center collected through a cynical scheme to warehouse Medicaid eligible children in full-day hospitalization programs by falsifying the medical necessity of such treatment then failing to provide it.”

Friday, August 13, 2010

New York strengthens its False Claims Act

New York Governor David Paterson signed into law today a bill that amends the New York False Claims Act, strengthening the act so as to be “at least as effective as the federal Act.”

In addition to other changes, the bill adds new protections for whistleblowers and broadens the scope of damages of which a portion is to be allotted to the whistleblower. Further protection and increased financial motivation for whistleblowers may help to motivate persons with knowledge of funds fraudulently acquired from the state to come forward.

The bill’s memo clarifies that the intent of the amendments is, in addition to strengthening the deterrence of further fraud against the government, to “help increase the amount of fraudulently-paid funds recovered by state and local governments under the False Claims Act.”

Student lender agrees to pay $55 million settlement in whistleblower case

Student lender Netlet said today that it has agreed to pay a $55 million settlement, resulting from a whistleblower case that was set to begin trial on Tuesday, but was delayed by the judge so as to facilitate settlement talks.

Whistleblower Jon Oberg helped discover in 2006 that several student lenders had been receiving an erroneously high return on loans through a program that was supposed to have been phased out in 1993, according to the Omaha World Herald. As the whistleblower for the case, he will earn portion of the damages.

The Netlet case is part of a larger lawsuit that alleges over $1 billion in overpaid returns by the federal government to nine lending companies. Netlet allegedly received $407 million in overpayments. Had they lost in trial, those damages could have been substantially increased. Another defendant in this case is Sallie Mae.