A 16 year veteran manager of The Visiting Nurse Service of New York has filed a whistleblower suit against the non-profit agency for defrauding Medicare and Medicaid of hundreds of millions of dollars over the years through fraudulent invoices and other practices. The lawsuit, reported by the New York Times charges that for financial gain, the company “intentionally ignored” the plans of care prescribed by physicians and provided only  a small portion of the nursing and rehabilitation visits that had been ordered under Medicare, which pays a set rate for an “episode of care.”

These actions, says the lawsuit, jeopardized the physical welfare of the patients.

It said one patient with lupus  who had undergone a lower-limb amputation and used a wheelchair had been  ordered 27 rehabilitation visits and 38 nursing visits to be made over a 60-day period. The agency provided no rehabilitation visits and only five nursing visits during the two-month period However  it collected a full $3,537 in government reimbursement, the lawsuit says.

Life Care Centers of America one of the nation’s largest skilled nursing providers and the controversial topic of statistical sampling will end in a settlement, according to a brief filed Thursday.

The False Claims Act lawsuit against Life Care Centers of America,  accused  the company of providing unnecessary therapy services to maximize reimbursements. The government intervened in the case in 2012, and proposed using a sample of 400 Medicare claims from Life Care Centers facilities to show that the inflated therapy claims occurred throughout the company.

Instead of a final decision the Life Care Centers case will end in a settlement, expected to be finalized by Oct. 31, 2016. The settlement will resolve the allegations against Life Care Centers and a  against CEO Forrest Preston, according to the jointly filed brief.

A significant number of whistleblowers employed by Wells Fargo who wanted to report the terrible wrongdoing they observed  were fired in retaliation by the company for wanting to open up, according to CNN. It is now known that Wells Fargo employees opened up 2,000,000 fake accounts in their customers’ names, stealing funds from patrons real accounts to open them, then invoicing fees and penalties,in many cases damaging the customers’ credit ratings.http://money.cnn.com/2016/09/21/investing/wells-fargo-fired-workers-retaliation-fake-accounts/index.html. It is not yet clear who the whistleblowers are. Wells Fargo did terminate 4500 employees over the wrongdoing.

CNN also reports that a former Wells Fargo HR manager said that the retaliatory firings worked: employees who blew the whistle would be monitored closely for minor infractions (e.g. being two minutes late for work), then fired “with cause.” Under certain laws, it can amount to a criminal offense to fire whistleblowers and it also makes the CEO and CFO personally, criminally liable for failures to create secure means by which whistleblowers can come forward without fear of retaliation.

So far, the only legal remedy for this massive fraud was a $185 million fine paid by Wells Fargo. No one has been charged or indicted and although Congress has been asking sensitive questions, it is unclear that there will be any criminal ramifications despite the size of the fraud. Individuals who were fired will being lawsuits but those will be settled monetarily.

With the Securities and Exchange Commission charges against hedge fund king Leon G. Cooperman, the government has loudly announced that insider trading prosecutions are far from over. Following a major 2014 ruling on insider trading by the  Second Circuit, the government dropped all criminal charges against Thomas Conradt and Daryl Payton for trading on advance information about a deal. The court said that to prove insider trading, the government needed to show traders didn’t merely know they were trading on confidential information but also that the information came from someone who had been rewarded in exchange.

The Securities and Exchange Commission has a lower burden of proof in the civil cases it pursues and it starts the process. Frequently after damaging information is found, the Department of Justice takes over and prosecutes the claims.

Although the SEC has brought a civil case against Cooperman, the US Attorneys Office in New Jersey suspended a criminal investigation of him awaiting a decision on a pending insider trading case before the Supreme Court, according to the WSJ. That case is reviewing the Second Circuits decision on insider traders. The case is United States v. Newman (no relation to me) and oral arguments are scheduled for next month.

HHS’ Office of Inspector General said Tuesday that the massive post-acute care provider failed to correct improper billing practices during the fourth year of its five-year corporate integrity agreement, stemming from a prior $25 million False Claims Act settlement with Gentiva Healthcare. Kindred acquired Gentiva in a $1.8 billion deal.According to OIG, Medicare was charged for hospice care even though patients weren’t eligible for those high reimbursement services.The corporate integrity agreement stems from a March 2012 settlement with Gentiva and its subsidiary Odyssey HealthCare, over Medicare billing for some hospice services. The alleged false claims were submitted from 2006 through 2009.

Kindred’s internal auditors had discovered that Kindred and its predecessors didn’t implement the policies and procedures required of them to correct Medicare billing issues. Ultimately, that led to significant billing error rates and overpayments while the company was under federal supervision.

The current corporate integrity agreement stems from a March 2012 t with Gentiva and its subsidiary Odyssey HealthCare, over Medicare billing for some hospice services. The alleged false claims were submitted from 2006 through 2009.

North American Health Care Inc. (NAHC), its chairman of the board, John Sorenson, and its senior vice president of Reimbursement Analysis, Margaret Gelvezon, have agreed to pay a total of $30 million to resolve allegations that they violated the False Claims Act by causing the submission of false claims to government health care programs for medically unnecessary rehabilitation therapy services provided to residents at NAHC’s skilled nursing facilities (SNFs), the Department of Justice announced today.  Under the settlement agreement, NAHC has agreed to pay $28.5 million. Mr. Sorensen has agreed to pay $1 million and Ms. Gelvezon has agreed to pay $500,000. NAHC is a private, for-profit company headquartered in Orange County, California, that has service agreements to operate 35 SNFs, most of them in California.  The SNFs provide inpatient rehabilitation services, including physical, occupational, and speech therapy, to patients.  The United States contends that NAHC caused false claims to be submitted to Medicare and TRICARE, seeking payment for medically unnecessary rehabilitation therapy services provided to residents at the NAHC facilities.

The United States further contends that Gelvezon, in her capacity as an officer of NAHC, contributed to this conduct by creating the improper billing scheme.  The government also contends that Sorensen, in his capacity as chairman of the board of NAHC, reinforced this scheme at the NAHC facilities.  The United States contends that this conduct occurred during the period from Jan. 21, 2005, to Oct. 31, 2009, for all of the NAHC SNFs and continued during the period of Nov. 1, 2009, to Dec. 3, 2011, for three of the SNFs in the Northern District of California area.  As part of this settlement, NAHC has also entered into a five-year Corporate Integrity Agreement (CIA) with the HHS-OIG.  The CIA applies to all facilities managed by NAHC and requires an independent review organization to annually review therapy services billed to Medicare.

Jeffrey Newman represents whistleblowers.


Regions Bank (Regions) will pay the United States Government $52.4 million to settle  allegations of violating the False Claims Act. where is was alleged that the bank knowingly originated and underwrote mortgage loans insured by U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that it should not have; the loans did not meet applicable requirements. “Mortgage lenders that participate in the FHA insurance program must follow the requirements intended to safeguard its integrity and to protect homeowners,” said principal deputy assistant attorney general Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to hold responsible lenders that knowingly violate these important requirements.”

Regions has admitted that it certified select mortgages for FHA insurance that did not meet HUD requirements from Jan. 1, 2006 and Dec. 31, 2011. Additionally, during that time period, Regions allegedly failed to maintain a HUD compliant quality control program. “The FHA insurance program plays a critical role in the stability of the housing market,” said A. Lee Bentley III, U.S. attorney for the Middle District of Florida. “Lender misconduct that puts this program at risk will not be tolerated.”

Jeffrey Newman represents whistleblowers but not in this case.

The Food and Drug Administration (FDA) is advising consumers not to purchase or use Stiff Bull Herbal Coffee, a product promoted for improving energy. This product was identified by FDA during an examination of international mail shipments. FDA laboratory analysis confirmed that Stiff Bull Herbal Coffee contains desmethyl carbodenafil. Desmethyl carbodenafil is structurally similar to sildenafil, the active ingredient in Viagra, an FDA-approved prescription drug for erectile dysfunction (ED). This undeclared ingredient may interact with nitrates found in some prescription drugs such as nitroglycerin and may lower blood pressure to dangerous levels. Men with diabetes, high blood pressure, high cholesterol, or heart disease often take nitrates.

The FDA notification, released Friday is to inform the public of a growing trend of dietary supplements or conventional foods with hidden drugs and chemicals. These products are typically promoted for sexual enhancement, weight loss, and body building and are often represented as being “all natural.”
Jeffrey Newman represents whistleblowers

The United States Department of Justice has made a $14 billion demand to settle claims it wrongfully sold mortgage-backed securities. Deutsche banks response was that it would fight rather than pay that amount. The bank has had other financial stressors and had recently announced the need to cut costs as revenue fell in the second quarter due to low interest rates. Deutsche Bank shares, lost  half their value this year. The DOJ has been tough on banks in these kinds of negotiations. However, this may be an opening salvo. In 2014 DOJ demanded $12 billion from Citigroup and it paid $7 million in the end. $14 billion fine would be of the largest paid by banks to U.S. authorities in recent years. The bank has not announced what it has set aside in anticipation of a settlement over the sale and packaging of resident mortgage-backed securities before 2008.

Jeffrey Newman represents whistleblowers


Romy Macaset Jr.,  owner of a home health care company, Home Bound Healthcare, Inc. of Illinois,  admitted in federal court today that he paid illegal kickbacks to procure referrals of elderly patients on Medicare. He acknowledged in a plea agreement that he retained and paid Medical Directors a monthly fee solely for the purpose of obtaining patient referrals, and not for medical services.  He also acknowledged that he used Medical Director agreements as a way to conceal the payment of kickbacks.

Between December 2006 and September 2014, Macasaet paid $789,327 in bribe payments to approximately 20 medical directors and as a result of the payments, Home Bound improperly sought and received Medicare reimbursements totaling several million dollars.

Macasaet, 47, of Homewood, pleaded guilty to one count of violating the Anti-Kickback Statute.  The conviction is punishable by up to five years in prison.  U.S. District Judge Samuel Der-Yeghiayan set sentencing for Feb. 15, 2017, at 10:30 a.m.