False Claims Act

Sacred Heart Hospital Execs Arrested for Medicare Referral Kickback Conspiracy

Submitted by mma on April 22, 2013
April 22, 2013

On April 16, the owner and another senior executive of Chicago’s Sacred Heart Hospital and four physicians affiliated with the facility were arrested in connection with a Medicare and Medicaid kickback and fraud scheme, the U.S. Department of Justice reported.

Edward J. Novak, Sacred Heart’s owner and chief executive officer, and Roy M. Payawal, Sacred Heart’s executive vice president and chief financial officer, allegedly engaged in a number of kickback and Medicare and Medicaid fraud schemes.  They allegedly paid kickbacks to physicians to refer Medicaid and Medicare patients to the hospital, with the kickbacks disguised as rent check payments, physician ghost contracts for duties without any real responsibilities, or payments for teaching nonexistent medical students, among other things.  Sacred Heart also allegedly billed Medicare for unnecessary emergency room care and unnecessary tracheotomy procedures.

“The arrests should send a chilling message both to health care executives and physicians: If you pay or accept kickbacks, big trouble follows,” former federal prosecutor Michael A. Hirst, said to the Report on Medicare Compliance journal.  Michael Hirst works for the Hirst Law Group in Davis, Calif., a firm affiliated with The Chanler Group.

The investigation is ongoing.

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.

Cross-Post On: 
None

Amgen to Pay $24.9M to Resolve False Claims Allegations Re: Kickbacks

Submitted by mma on April 18, 2013
April 18, 2013

California-based biotechnology company Amgen, Inc. will pay the United States $24.9 million to settle allegations that Amgen knowingly caused the filing of false claims to the federal government, the U.S. Department of Justice announced.

Amgen allegedly gave kickbacks to pharmacy providers Omnicare, Inc., PharMerica Corporation, and Kindred Healthcare, Inc. in return for implementation of programs that were designed to switch Medicare and Medicaid patients from competitors’ drugs to Amgen’s version, Aranesp.  The alleged kickbacks took the form of performance-based rebates, and Amgen allegedly encouraged pharmacists and nursing home staff to use Aranesp even for patients who did not suffer from symptoms Aranesp was designed to treat.  Medicare and Medicaid were thus allegedly billed for the cost of drugs that patients did not need and that providers were influenced to prescribe or use.

The lawsuit was originally filed by Frank Kurnik, a former employee of Amgen, under the whistleblower provision of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud to sue on behalf of the government, and claim in a share of the recovery.  Kurnik’s reward 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.

Cross-Post On: 
None

Jury Finds State Farm Defrauded Govt with False Hurricane Katrina Claims

Submitted by mma on April 10, 2013
April 10, 2013

A federal jury found for whistleblowers in reaching a verdict that State Farm Fire and Casualty Co. knowingly provided fraudulent claims to the federal government under the flood insurance program for Hurricane Katrina regarding damage to at least one home, the San Francisco Chronicle reported on Tuesday.  In reaching its special verdict, the jury found that State Farm caused damages to the government in the amount of $250,000.  Under the False Claims Act, the relators, known as whistleblowers, may file a motion with the court to triple the amount of damages found by the jury to $750,000.  Additional damages, as well as the share of proceeds to be awarded to the whistleblowers, is yet to be determined.

State Farm allegedly paid policy limits of $250,000 for flood damage to Thomas and Pamela McIntosh’s home in Biloxi, Miss. even though the damage was caused by wind.  Wind damage would have been covered under State Farm’s policy, while flood damage was covered by a National Flood Insurance Program (NFIP) policy issued by State Farm.  Under the NFIP, State Farm would be reimbursed by the government for claims covered by the flood damage policy.  By charging the NFIP for losses, State Farm minimized its own payments for wind damage while shifting payment for hundreds of thousands of dollars to the government.  The jury found that the house suffered $0 worth of flood damage, and that State Farm overcharged the NFIP the full $250,000.

According to the Sun Herald, this verdict may open the case to potentially thousands of post-Katrina flood claims adjusted by State Farm and paid by the NFIP.  The whistleblowers alleged that State Farm trainers told adjustors that Hurricane Katrina was a “water storm” and that all major damage to homes was caused by flooding, all while delaying their own assessments of wind damage claims.  State Farm also allegedly pushed the NFIP to relax their rules and requirements for adjusting flood claims. 

The suit was originally filed by Kerri and Cori Rigsby under the qui tam, or whistleblower, provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud committed against the government to sue on the government’s behalf and claim a share of the recovery.  The Rigsbys were employees of a contractor hired by State Farm to help adjust the deluge of claims that followed Hurricane Katrina. 

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.

PDFs: 
application/pdf iconrigsby_v_state_farm_jury_verdict.pdf
Cross-Post On: 
None

Fluor to Pay $1.1M to Settle Lobbying Claims; Whistleblower to Get $200K

Submitted by mma on April 3, 2013
April 3, 2013

Fluor Corp. has agreed to pay a $1.1 million settlement to resolve allegations that it violated the False Claims Act when it allegedly used federal money to pay lobbyists, the U.S. Department of Justice announced today.

Fluor Hanford operated the Hazardous Materials Management and Emergency Response (HAMMER) training center for the Department of Energy from 2005 to 2009.  In 2005, HAMMER allegedly used federal money to hire two firms to lobby members of Congress and federal agencies for more money.  According to the terms of Fluor’s contract with the Department of Energy, federal money was intended for training first responders and law enforcement personnel to respond to crisis situations, not to lobby Congress for more funding.

Loydene Rambo, a former contracting official for HAMMER, filed the initial lawsuit against Fluor under the qui tam, or whistleblower, provisions of the False Claims Act.  The qui tam provisions allow a private citizen with knowledge of fraud to sue on behalf of the government and share in the recovery.  Rambo will receive $200,000 as her share of the settlement with Fluor.

Fluor released a statement on April 1st in which they denied any wrongdoing.

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.

Cross-Post On: 
None

Whistleblower Settles Retaliation Claims with SF Hospital for $750K

Submitted by mma on April 1, 2013
April 1, 2013

A former hospice physician recently secured a $750,000 settlement from the City of San Francisco after he filed complaints alleging that his layoff was the result of retaliation for whistleblower complaints that San Francisco’s Laguna Honda Hospital and Rehabilitation Center (“Laguna Honda Hospital”) had misused patient funds and knowingly entered into a conflict of interest.

Dr. Derek Kerr, a hospice physician for over 20 years at Laguna Honda Hospital, filed complaints against the hospital in late 2010, alleging that it misused patient gift funds and knowingly entered into a conflict of interest when it established a relationship with a non-profit that had connections to management at the hospital.  The day after he filed the complaints, Kerr received a layoff notice.

Kerr reported the layoff to the San Francisco Ethics Commission as whistleblower retaliation, which is prohibited under California Government Code section 53298, California Health and Safety Code section 1432, and California Labor Code section 1102.5.  He later filed a complaint in the San Francisco County Superior Court and eventually negotiated a $750,000 settlement with the city, and an agreement that a plaque be installed at the hospital commemorating his work there.  He will also be lauded by the very officials who were allegedly responsible for his layoff.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who have been subject to retaliation for taking 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.

Cross-Post On: 
None

CDW to Resolve Contract Fraud Claims for $5.66M; Whistleblower to Get $1.37M

Submitted by mma on March 29, 2013
March 29, 2013

CDW-Government LLC (CDW-G), a wholly owned subsidiary of Illinois company CDW Corporation, has agreed to pay $5.66 million to resolve false claims allegations in connection with a U.S. General Services Administration (GSA) contract, the U.S. Department of Justice announced today.

CDW-G allegedly improperly charged government purchasers for shipping, sold products to the U.S. government that were manufactured in China and other countries prohibited by the Trade Agreements Act, and underreported sales in order to avoid paying certain fees.

The suit was originally filed by former CDW-G sales representative Joe Liotine under the qui tam, or whistleblower, provision of the False Claims Act, which allows private citizens with knowledge of fraud against the government to sue on behalf of the United States and then share in the recovery.  Liotine will receive $1.37 million of the recovery.

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.

Cross-Post On: 
None

UC Settles Falsified Health Records Suit for $1.2M; Whistleblower to Get $120K

Submitted by mma on March 28, 2013
March 28, 2013

The University of California has agreed to pay a $1.2 million settlement to resolve allegations of falsification of medical records and poor supervision of patients, the Los Angeles Times reported yesterday.

The suit was brought by whistleblower Dr. Dennis O’Connor, a former professor of anesthesiology at the UC Irvine School of Medicine.  He alleged that anesthesia was administered to patients by nurse anesthetists and residents without the required supervision by an anesthesiologist.  The university medical center also allegedly filled out patient care reports before procedures began, making it appear as though an anesthesiologist was present when one was not.

Dr. O’Connor will receive $120,000 of the settlement; the rest will go to the federal government.

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.

Cross-Post On: 
None

U.S. Appeals Court Reverses Gross Trebling of False Claims Damages

Submitted by mma on March 27, 2013
March 27, 2013

On March 21, the U.S. Court of Appeals for the Seventh Circuit upheld the district court’s decision to find Anchor Mortgage Corporation and its CEO John Munson liable for false claims submitted in loan guaranty applications to the U.S. government, but reversed the “gross trebling” calculation of the damages in favor of “net trebling,” which reduced the total recovery.

In 2010, the federal district judge found Anchor Mortgage Corporation guilty of lying when applying for federal guarantees of 11 loans, and therefore liable for treble (triple) damages under the False Claims Act.  The judge calculated damages by totaling the amounts that the government paid to lenders under the federal guarantees, trebling it, then subtracting any collateral (in this case, real estate that had been sold).  According to the appellate decision, as an example,

[T]he Treasury paid $131,643.05 on its guaranty of a particular loan. Three times that is $394,929.15. The real estate mortgaged as security for that loan sold for $68,200. The judge subtracted the sale price from the trebled guaranty; the result of $326,729.15 represented treble damages. To this the judge added the $5,500 penalty, for a total of $332,229.15.

The defendants proposed a different approach: beginning with the total of the federal guarantees, immediately subtracting the collateral, and then trebling the amount.  The defendants’ example results in a significantly smaller amount of damages:

Like the district judge, they start with $131,643.05, but they immediately subtract the $68,200 that the United States realized from the collateral. The net loss is $63,443.05.  Treble that, and the result is $190,329.15. Add $5,500 for a total of $195,829.15.

The appeals court affirmed Anchor’s guilt in the matter, but reversed the district judge’s “gross trebling” of the damages in favor of the defendants’ “net trebling,” noting that while the False Claims Act does not specify either a gross or a net trebling approach, “the norm is net trebling.” 

The False Claims Act allows whistleblowers to bring suit on behalf of the U.S. government and share in the recovery.  The Chanler Group, in association with the Hirst Law Group, has 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.

Cross-Post On: 
None

Caddell to Pay $1.15M for False Claims Re: Hiring Native American Business

Submitted by mma on March 26, 2013
March 26, 2013

Alabama-based Caddell Construction has agreed to pay a $1.15 million settlement to resolve allegations that they violated the False Claims Act by knowingly making false reports to the Army Corps of Engineers that they had hired and were mentoring a Native American-owned company to work construction projects, the U.S. Department of Justice announced.

The United States alleged that from 2003 to 2005, Caddell falsely represented in invoices and supporting documents that it was mentoring Mountain Chief Management Services to perform work on construction projects at Fort Bragg, N.C. and Fort Campbell, Ky.  The mentorship of Mountain Chief Management Services was part of Caddell’s contract with the Army Corps of Engineers, and Caddell received reimbursements and rebates under the Mentor-Protégé and Indian Incentive Programs.  However, as alleged by the government, Mountain Chief was a pass-through entity used by Caddell to enable Caddell to claim payments and did not actually perform the work or receive any mentoring.

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.

Cross-Post On: 
None

Court Upholds Whistleblowers' $6.9M Share of $46M False Claims Settlement

Submitted by mma on March 22, 2013
March 15, 2013

Earlier this month, the U.S. Court of Appeals for the Eighth Circuit upheld the federal district court's decision that the two whistleblowers, or relators, in Rille et al v. Accenture, LLP et al, No. 11-2054 (8th Cir. 2013) were entitled to a 15% share of the federal government's $46 million False Claims Act settlement with Hewlett-Packard, amounting to a $6.9 million award to the whistleblowers.

The relators, Norman Rille and Neal Roberts, filed a <i>qui tam</i>, or whistleblower, action in 2004 against HP and other defendants on behalf of the United States, alleging that the defendants gave kickbacks to consultants in exchange for recommendations and engaged in pricing schemes that cost the federal government millions of dollars.

In 2006, the government intervened and filed its own complaint against HP and the other defendants, and eventually entered into a settlement in which the government received $55 million: $9 million from the kickback scheme and $46 million for the pricing scheme.  While the government conceded a share of the kickback settlement to the relators, it attributed the pricing settlement to its own investigation, and not the relators'.

The district court found in favor of the relators, writing that "the government had no knowledge of the defective pricing before Relators brought it to light."  The government appealed.  The Court of Appeals affirmed the district court's decision, upholding the whistleblowers' entitlement to 21% of the $9 million kickback settlement and 15% of the $46 pricing 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.

Cross-Post On: 
None
Syndicate content