False Claims Act

A lawsuit against StarKist’s parent company, Dongwon Industries (Dongwon), has been filed under the False Claims Act for making false statements to secure vessel certification and fishing licenses, Undercurrent News announced last week.

Allegedly, Dongwon knowingly submitted false information to obtain documentation allowing two Korean owned companies, Majestic Blue and Pacific Breeze, to receive tuna fishing licenses under the South Pacific Tuna Treaty (SPTT). These licenses are reserved only for vessels registered in the United States and are paid for using U.S. taxpayer dollars.

Jaewoong Kim, former executive of Dongwon, is reported to have registered his two daughters as the managers, in name only, of Majestic Blue and Pacific Breeze. By registering his daughters, whom hold U.S. citizenship, Majestic Blue and Pacific Breeze were able to receive the U.S. licenses needed to fish the profitable zones of the South Pacific. Dongwon is further alleged to have created a false identity under the American-sounding alias “William Phil”, as a fictitious manager when dealing with U.S. officials.

It is also alleged that Dongwon failed to report oil discharge and sea dumping in an attempt to avoid penalties for violating the Act to Prevent Pollution from Ships.

The lawsuit was filed by a private whistleblower under the whistleblower provisions of the False Claims Act. Under the False Claims Act, private parties with knowledge of fraud against the government may sue on behalf of the government and share in the recovery.  The whistleblower may receive anywhere from 15 to 30 percent as their portion of the settlement.

 The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government including, health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

Prime Healthcare Services Inc. (PHS) is being sued by an employee whistleblower, Karin Berntsen, for allegations under the False Claims Act that they knowingly falsified patients’ admission information, Law360 announced earlier this month.

PHS allegedly directed hospital staff to falsify patients’ diagnoses in order to charge the highest amount to Medicare and Medicaid. PHS also refused to release patients to post-acute care centers so they could further their profits. It is further alleged that PHS bought failing hospitals and enhanced their revenue by having those hospitals engage in similar fraudulent practices. PHS allegedly cost Medicare and Medicaid around $50 million in reimbursements.

The lawsuit was originally filed by Karin Berntsen, a former PHS employee, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. The government has elected not to intervene in this case, and Berntsen could receive up to 30 percent of the settlement, if there is one.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

Two orthopedic clinics, Tennessee Orthopaedic Clinics P.C. and Appalachian Orthopaedic Clinics P.C., will pay a combined $1.85 million to resolve allegations under the False Claims Act that they knowingly billed state and federal health care programs for re-imported osteoarthritis medications, known as viscosupplements, the Department of Justice announced last week. 

Viscosupplements are injections approved by the Food and Drug Administration for the treatment of osteoarthritis pain in the knee. Viscosupplements are reimbursed by Medicare, Medicaid and other federal health care programs at a set rate based on the average sales price of the domestic product. The government alleged that the clinics knowingly purchased deeply discounted viscosupplements that were re-imported from foreign countries and billed them to state and federal health care programs at the set rate in order to profit from the reimbursement system, when such reimported viscosupplements were not reimbursable by those programs. Allegedly, the re-imported product included labeling in foreign languages and in English for additional uses not approved in the United States, demonstrating that the product was re-imported.  Moreover, because the product was re-imported, the government alleged there was no manufacturer assurance that it had not been tampered with or that it was stored appropriately. 

Tennessee Orthopaedic Clinics P.C. will pay $1.3 million, and Appalachian Orthopaedic Clinics P.C. will pay $550,000. 

The lawsuit was originally filed by Douglas Estey, a physician’s assistant paid to speak to medical providers about the use of viscosupplements, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Estey will receive $323,750 as his portion of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

General Electric Hitachi Nuclear Energy Americas LLC (GE Hitachi) has agreed to pay $2.7 million to resolve allegations under the False Claims Act that it made false statements and claims to the Department of Energy (DOE) and the Nuclear Regulatory Commission (NRC) concerning an advanced nuclear reactor design, the Department of Justice announced today.

GE Hitachi allegedly made false statements to the NRC and the DOE about a component of the advanced nuclear Economic Simplified Boiling-Water Reactor (ESBWR) known as the steam dryer. A steam dryer removes liquid water droplets from steam produced by the nuclear reaction that generates electricity in boiling-water type reactors. The NRC requires that applicants for nuclear reactor design certification demonstrate that vibrations caused by the steam dryer will not result in damage to a nuclear plant. The government alleged that GE Hitachi concealed known flaws in its steam dryer analysis and falsely represented that it had properly analyzed the steam dryer in accordance with applicable standards and had verified the accuracy of its modeling using reliable data.     

GE Hitachi received funding from the DOE to cover up to half of the cost of developing, engineering and obtaining design certification for the advanced nuclear ESBWR. The NRC, which regulates the civilian use of nuclear power, is responsible for determining whether to approve GE Hitachi’s application for the reactor design certification. The NRC is still reviewing the application and has not reached a final decision on the certification. 

The lawsuit was originally filed by LeRay Dandy, a former GE Hitachi employee, under the whistleblower provisions of the False Claims Act. The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Dandy’s share of the settlement has yet not been determined.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

BioScrip has agreed to pay $15 million to resolve allegations under the False Claims Act that they received kickbacks from Novartis in exchange for recommending refills to patients, the Department of Justice announced earlier this week.

Novartis allegedly provided kickbacks to BioScrip, in the form of patient referrals and in the guise of rebates, in exchange for BioScrip recommending refills to its Exjade patients. This Exjade scheme violated the federal anti-kickback statute, which prohibits the offer or payment of remuneration to induce the purchase or recommendation of any drug or service covered by Medicare, Medicaid, or another federal healthcare program.

Novartis markets and manufactures Exjade, an iron chelation drug approved for use by patients who have iron overload resulting from blood transfusions. BioScrip was part of a Novartis created distribution network for Exjade, and through this network, Novartis was able to refer Exjade patients to particular pharmacies within the network. In order to obtain greater numbers of patient referrals and rebates, BioScrip, in coordination with Novartis, implemented a program of calling patients to recommend Exjade refills or to get patients who stopped ordering Exjade refills to resume their orders.

Novartis and BioScrip promoted these calls as part of an effort to offer clinical “counseling” or “education” to Exjade patients while emphasizing the importance of getting refills, but allegedly ignored Exjade’s serious, potentially life-threatening side effects, such as kidney failure and gastrointestinal hemorrhaging.

BioScrip has agreed to pay $11,685,705.43 to the United States, admit numerous facts concerning its relationship with Novartis, and agrees to cooperate with the United States in the prosecution of the claims against Novartis. BioScrip has also agreed to pay $3.31 million to a group of States to settle the States’ claims based on the same alleged conduct.

The lawsuit was originally filed by Oswald Bilotta, a former Novartis sales representative, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Bilotta’s portion of the settlement has not yet been determined.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.