DoJ: The False Claims Act Is A Formula That Works

America’s taxpayers are in a long-term battle against powerful and well-funded corporate cheats and thieves.

Fraud is a core part of some company business plans, and incentivized integrity programs are a threat to their bottom line.

Opposition to federal and state False Claims Acts is entrenched.  The liars are cunning and powerful.

Above all, they are patient.

For more than 25 years TAF and the TAF Education Fund have successfully promoted whistleblower laws and outreach.

As a result, the False Claims Act has survived attacks in Congress and at the Supreme Court. We have worked to amend and strengthen the law. We have worked to expand the False Claims Act to the states, and we have sparked the creation of new incentivized whistleblower legislation targeting tax fraud, securities fraud, and commodities trading fraud.

But corporate lobbyists still prowl Capitol Hill.

Apologists for fraud push and probe for weaknesses.

They suggest capping whistleblower awards, knowing such a move will remove incentives to bring large cases.

Eager to cap integrity, they are little less eager to put a cap on fraud!

Exclude officers and managers in fraud cases when scores of millions, and even billions of dollars have been stolen from the American people?  They are opposed to that!

Require a salary cap for the CEOs of fraudster corporations as a condition of settlement?  Let’s not be too hasty!

Increase staffing within DoJ’s Civil Division so that cases can be moved forward more expeditiously? They will never suggest it.

And why would they?  Fraud against America’s taxpayers is big business.  In fact, stealing money from the U.S. Treasury is so profitable that some fraudster companies now have lawyers on permanent retainer in Washington with the sole mission of undermining incentivized integrity programs.

The good news is the TAF Education Fund need only tell stories of success to show the power of current law.

Or, as Attorney General Eric Holder put it when asked about the Chamber of Commerce’s attempts to cap whistleblower awards:

“The Act has presently constructed, is working extremely, extremely well.… In the past 25 years, we have had nearly 8,000 qui tam cases filed, and they have yielded more than $21 billion in recoveries for the United States, $3.4 billion in recoveries to relators. In Fiscal Year 2011 alone, the Department recovered more than $2.7 billion in qui tam cases, and relators received about $530 million dollars as their statutory share.

The statute as it is presently constructed works, and works quite well.

I would be reluctant to fool around with a formula that for the past 25 year has been shown to be an effective tool in getting at fraud and incentivizing people to stay involved in the process, and working with government as partners.”

Three years and $15 billion additional dollars later, we couldn’t say it better ourselves.

https://www.taf.org/blog/doj-false-claims-act-formula-works

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Whistleblower Lawsuit Exposing Wound Care Clinic Fraud Leads To $4.3 Million Settlement

Operators of the Lymphedema & Wound Care Institute Inc. in Houston have agreed to pay $4.3 million to settle a whistleblower’s allegations that they improperly billed Medicare for physical therapy treatments provided by unqualified therapists.

According to the whistleblower, a physician who treats patients with lymphedema, the defendants billed Medicare for lymphatic drainage therapy that was performed by massage therapists.  Under Medicare rules, the subject therapy must be conducted by physical therapists in order to qualify for Medicare reimbursement.

As a reward for exposing this fraud by filing a False Claims Act lawsuit, the whistleblower will receive 19% of the settlement proceeds.

For more information on this case, click here:

http://www.justice.gov/usao/txs/1News/Releases/2013%20December/131202%20-%20Morgan%20et%20al.html

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Pharmacy Benefit Management Company Pays $4.25 Million To Settle Whistleblower Lawsuit

Caremark LLC (“Caremark”) agreed to pay $4.25 million to resolve a False Claims Act lawsuit alleging that it failed to reimburse Medicaid for prescription drug costs that should have been paid by private health insurance plans.  Caremark is a pharmacy benefit management company operated by CVS Caremark Corp.

 “Dual eligible” individuals are covered by Medicaid as well as private health insurance, but federal law requires that private insurers assume their health care costs.  Medicaid is entitled to reimbursement of any prescription claims it pays for dual eligibles.

Using a computer claims processing program, Caremark allegedly cancelled claims for reimbursement submitted by Medicaid for dual eligibles, thereby shifting prescription drug costs to the government.

This False Claims Act lawsuit was filed by a former Caremark quality assurance representative, who will receive $505,680 from the federal government’s share of the settlement proceeds.

For more information on this case, click here:  http://www.justice.gov/opa/pr/2013/December/13-civ-1267.html

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Doctor Exposes Medicare Fraud With False Claims Act Lawsuit

A Tennessee doctor will share in the government’s recovery after filing a whistleblower lawsuit against a cardiologist who allegedly performed medically unnecessary cardiac stent placements.

Under the settlement, cardiologist Dr. Elie H. Korban will pay $1.15 million to resolve allegations that he placed unnecessary stents in Medicare and Medicaid patients.

For more information on this case, click here:  http://www.justice.gov/opa/pr/2013/December/13-civ-1333.html

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Vantage Oncology LLC To Pay More Than $2.08 Million To Settle False Claims Act Lawsuit

Vantage Oncology LLC, an owner and operator of radiation oncology centers, has agreed to pay more than $2.08 million to resolve a whistleblower’s allegations that it over-billed Medicare for radiation oncology services.

The government in this False Claims Act lawsuit accused Vantage of  double billing for certain procedures, billing for services without proper supporting documentation, and billing for radiation treatment provided without required doctor supervision.

The whistleblower in this case, a former Vantage employee, will receive $354,450 as his share of the settlement proceeds pursuant to the qui tam provisions of the False Claims Act.

For more information on this case, click here:  http://www.justice.gov/opa/pr/2013/November/13-civ-1243.html

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Whistleblower Lawsuit Exposing Violation Of U.S. Import Laws Leads To $1.1 Million Recovery

Basco Manufacturing Co. (“Basco”) has agreed to pay $1.1 million to resolve a whistleblower’s allegations that it made false customs declarations to avoid paying duties on products imported from China.  The products involved were aluminum extrusions, which are used in the manufacture of shower enclosures.

As alleged by the whistleblower, Basco represented to the government that aluminum extrusions were imported from Malaysia, rather than China.  By routing the products through Malaysia and misrepresenting their true origin, Basco avoided having to pay antidumping and countervailing duties applicable to Chinese products.  The government claimed that Basco knew that the products were simply repackaged in Malaysia and were not substantially transformed to the extent that the country of origin could change from China to Malaysia.

By exposing this scheme through the filing of a False Claims Act lawsuit, the whistleblower is entitled to receive a share of the settlement proceeds.  The amount of this share has not been determined.

For more information on this case, click here:  http://www.justice.gov/opa/pr/2013/November/13-civ-1221.html

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Baptist Health Systems Settles Whistleblower Lawsuit

Baptist Health Systems has agreed to pay $3,675,000 to resolve a whistleblower’s allegations that it violated the False Claims Act by failing to disclose insurance coverage applicable to  treatment it provided to Medicare beneficiaries.

Under Medicare rules, providers are required to disclose the fact that a patient has other insurance when the provider submits claims to Medicare.  In these instances, the claims are processed through the applicable insurance policy, with Medicare sometimes paying for the patient’s deductible or other out of pocket costs.  By failing to disclose the existence of applicable insurance coverage, Baptist Health Systems caused the government to overpay  Medicare claims from 2003 through 2007.

The whistleblower who exposed this practice through the filing of a False Claims Act lawsuit will receive $661,500 from the settlement proceeds.

For more information on this case, click here:  http://www.justice.gov/usao/txw/news/2013/Baptist_Hospital_SA_civil_settlement.html

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Whistleblower Lawsuits Filed By Therapists Lead To $48 Million Settlement

Nursing home operator Ensign Group, Inc. has agreed to pay $48 million to resolve allegations that it billed Medicare for unnecessary rehabilitation therapy services.

These False Claims Act lawsuits involved billing for services provided at six skilled nursing facilities operated by Ensign in California.  According to the whistleblowers’ allegations, Ensign provided medically unnecessary therapy to patients, and billed Medicare for services it had not provided.  The government also contended that Ensign improperly incentivized its employees to increase the amount of therapy provided to Medicare patients regardless of the patients’ individual therapy needs.

The whistleblowers who filed these lawsuits, two therapists formerly employed with Ensign,  will share in the settlement proceeds pursuant to the qui tam provisions of the False Claims Act.  The amount of the whistleblowers’ share has not been announced.

For more information on this case, click here:    http://www.justice.gov/opa/pr/2013/November/12-civ-1235.html

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Food Distribution Company Pays $4.2 Million To Settle Whistleblower Lawsuit

FreshPoint, Inc., a Houston-based subsidiary of Sysco Corp., has agreed to pay $4.2 million to resolve a False Claims Act lawsuit relating to the prices it charged the government for fresh fruit and vegetables.

According to the whistleblower’s allegations, FreshPoint improperly inflated its prices to reflect its view of the prevailing market price of the goods at the time of sale.  Pursuant to its contracts with the government, FreshPoint was required to supply the produce at cost, plus a pre-established markup as its profit, and was forbidden from making further price adjustments based upon its perception of changes in market prices.

The whistleblower, a former employee of FreshPoint, will receive $798,000 from the settlement proceeds as his award for exposing FreshPoint’s pricing practices by filing a False Claims Act lawsuit.

For more information on this case, click here:  http://www.justice.gov/opa/pr/2013/November/13-civ-1233.html

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Whistleblower Lawsuit Exposes Computer Software Maintenance Fraud

CA, Inc., formerly known as Computer Associates, has agreed to pay  $11 million to resolve a False Claims Act lawsuit accusing it of overcharging the government for computer software maintenance services.

According to the whistleblower’s allegations, CA charged its customers for renewal plans immediately, even though they often had months  remaining under their current plans.  Through this practice, government customers who renewed their maintenance plans were double billed for the months remaining in their existing plans.

This whistleblower case was brought on behalf of the federal government, as well as New York, California, Florida, Hawaii, Illinois, Massachusetts, Nevada, Virginia and the District of Columbia.  The federal portion of the settlement amounts to $8 million, and the states will divide the rest based on the number of renewal plans purchased.

For more information on this case, click here:  http://www.ag.ny.gov/press-release/ag-schneiderman-announces-11-million-multi-state-settlement-over-fraud-claims-against.

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