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 The William Beaumont Hospital in Michigan will pay $84.5 million settling a False Claims Act case over improper financial relationships with eight referring physicians, resulting in the submission of false claims to the Medicare, Medicaid and TRICARE program. Federal anti-Kickback ‘laws prohibit offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper financial arrangement, including the payment of compensation that exceeds the fair market value of the services actually provided by the physician and the provision of free or below-market rent and office staff.  The settlement resolves  the case which stated that between 2004 and 2012, Beaumont provided compensation substantially in excess of fair market value and free or below-fair market value office space and employees to certain physicians to secure their referrals of patients in violation of the Anti-Kickback Statute and the Stark Law, and then submitted claims for services provided to these illegally referred patients, in violation of the False Claims Act.  The settlement also resolves claims that Beaumont allegedly misrepresented that a CT radiology center qualified as an outpatient department of Beaumont in claims to federal health care programs.  As a result of this settlement, Beaumont will pay $82.74 million to the United States and $1.76 million to the State of Michigan.

The allegations resolved by the settlement were brought in four lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery.  The four qui tam cases are captioned:  United States ex rel. David Felten, M.D., Ph.D. v. William Beaumont Hospitals, et al., No. 2:10-cv-13440 (E.D. Mich.), United States ex rel. Karen Carbone v. William Beaumont Hospital, No. 11-cv-12117 (E.D. Mich.), United States ex rel. Cathryn Pawlusiak v. Beaumont Health System, et al., No. 2:11-cv-12515 (E.D. Mich.), and United States ex rel. Karen Houghton v. William Beaumont Hospital, No. 2:11- cv-14312 (E.D. Mich.).  The whistleblower shares to be awarded in the cases have not yet been determined.

 

Medical device maker, Alere Inc.  will pay $33.2 million to settle a whistleblower lawsuit which asserts that the company knowingly sold materially unreliable point-of-care diagnostic testing devices to hospitals. Alere will pay the federal government $33.2 million, of which $4.8 million will be paid to the participating states. Arkansas is set to receive $140,611.56. Alere is accused of selling its Triage devices to hospitals, which are used in emergency departments for the diagnosis of acute coronary syndromes, heart failure, drug overdose and other serious conditions, from 2006 through 2012. Alere received multiple complaints from providers that “put it on notice that certain devices it sold produced erroneous results that had the potential to create false positives and false negatives that adversely affected clinical decision-making.” Despite those warnings, Alere failed to take corrective action until the Food and Drug Administration issued a national product recall in 2012. Because of this conduct, the states allege that between January 1, 2006 and June 12, 2012, Alere knowingly submitted or caused the submission of false or fraudulent claims for the Triage devices to be submitted to, or caused purchases by, Medicaid.

 

“Alere not only cost government Medicaid programs money, the company put patients’ lives at risk by selling devices that gave false readings, despite receiving complaints about the accuracy of the equipment,” said Attorney General Rutledge. “These acts are not acceptable and will not be tolerated as long as I am Attorney General of Arkansas. Patient safety should always be health care providers’ number one concern.”

 3M Company (3M), has agreed to pay $9.1 million to resolve allegations that it knowingly sold the dual-ended Combat Arms Earplugs, Version 2 (CAEv2) to the United States military without disclosing defects that hampered the effectiveness of the hearing protection device.    Specifically, the United States alleged that 3M, and its predecessor, Aearo Technologies, Inc., knew the CAEv2 was too short for proper insertion into users’ ears and that the earplugs could loosen imperceptibly and therefore did not perform well for certain individuals.  The United States further alleged that 3M did not disclose this design defect to the military.

The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act.  The act permits private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to share in any recovery.  As part of today’s resolution, the whistleblower will receive $1,911,000.  The case is captioned United States ex rel. Moldex-Metric v. 3M Company, Case No. 3:16-cv-1533-MBS (D.S.C.).  The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Waveney Blackman, the owner of WaveCare HEalth Services, a company that provided durable medical equipment pleaded guilty today to a federal charge of health care fraud for carrying out a scheme in which she fraudulently obtained more than $9.4 million in District of Columbia Medicaid payments.According to the plea documents, Blackman devised and executed a scheme to submit false and fraudulent claims to Medicaid for durable medical equipment, including incontinence and wound care supplies, which she knew were not purchased or provided to Medicaid beneficiaries.  From January 2010 through approximately June 2016, Blackman sent and caused employees to send false and fraudulent invoices to a biller engaged by the company, which were then submitted to Medicaid.  All told, she submitted and caused the submission of at least $9.8 million in false and fraudulent claims to Medicaid.  Blackman, through WaveCare, fraudulently obtained $9,431,979 from Medicaid.

Waveney Blackman, 71, of Bowie, Maryland, pleaded guilty in the U.S. District Court for the District of Columbia.  Her sentencing is scheduled on Oct. 18 before the Honorable Thomas F. Hogan.

Blackman was the sole owner and chief executive officer of WaveCare Health Services LLC, also known as WaveCare Healthcare Services LLC.  The company, based in the District of Columbia, was a provider of durable medical equipment, including wound care and incontinence supplies, to Medicaid beneficiaries and others.  It became a Medicaid provider in 2008.

Jon E. Montroll from Saginaw, Texas is facing up to 20 years in prison for stealing thousands of Bitcoins from customer funds, running an unregistered securities exchange, and lying to US security regulators after his cryptocurrency exchange, BitFunder, was hacked, says Bloomberg news.  Montroll pleaded guilty to securities fraud and obstruction of justice before US Magistrate Judge James L Cott on July 21, 2018, and now faces up to 20 years in prison. Montroll, 37, operated two defunct cryptocurrency services. One of the services was WeExchange Australia Pty Ltd, a cryptocurrency exchange and Bitcoin depository.  BitFunder was a service whichaided the sale of virtual shares from business entities in exchange for cryptocurrencies like Bitcoin.

The  SEC says that  Montroll also did not register his securities exchange. “Platforms that engage in the activity of a National securities exchange, regardless of whether that activity involves digital assets, tokens, or coins, must register with the SEC or operate pursuant to an exemption,” said Marc Berger, the director of the SEC’s New York Regional Office.

Montroll  defrauded  investors by taking the Bitcoin deposits from WeExchange users’ and spending it on himself. Instead of providing the services required, he exchanged the cryptocurrencies for fiat currency and spent the money on personal expenses like travel and groceries.

https://www.whistleblowerlawyernews.com/files/2018/07/Jeffrey-A.-Newman-240x300.jpg                                                             Contact: Jeffrey A. Newman Esq.

                                                            www.JeffreyNewmanLaw.com

                                                            jeffrey@jeffreynewmanlaw.com

Ford Motor Co has agreed to pay $299.1 million in settlement for the faulty Takata air bag inflators. The settlement relates to nearly six million vehicles which were affected by the faulty air bags. The settlement covers several forms of economic damages linked to the inflators, including claims that vehicles were inaccurately represented to be safe, buyers had overpaid for cars with defective or substandard air bags and faced out of pocket costs to deal with recalls. Six automakers have previously agreed to similar settlements worth over $1.2 billion combined, including: Honda Motor Co ; Toyota Motor Corp ; Nissan Motor Co ; Mazda Motor Corp ; Subaru Corp  and BMW AG . At least 23 deaths worldwide are linked to the rupturing of faulty Takata air bag inflators. The issue has sparked the largest auto industry safety recall in history, involving about 100 million inflators among 19 major automakers. More than 290 injuries worldwide are also linked to Takata inflators that can explode, unleashing metal shrapnel inside cars and trucks.

To date, 21 deaths have been reported in Honda vehicles and two in Ford vehicles. The settlement also covers out-of-pocket costs, including lost wages and child care costs, Ford owners may face, or already incurred, to get vehicles repaired. Under the settlement, Ford will also provide free rental or loaner vehicles to owners of recalled vehicles who are awaiting repairs when parts are not available. Nearly 30 million U.S. vehicles remain unrepaired in the recall.

Takata last year pleaded guilty to a felony charge of wire fraud to resolve a U.S. Justice Department investigation and agreed to a $1 billion settlement.

The whistleblower which I featured in yesterday’s blog who was awarded $30 million by the Commodities Futures Trading Commission for blowing the whistle on JPMorgan Chase, will also receive an additional $48 million from the Securities and Exchange Commission. That means he will receive $78 million!  His name is Edward Siedle and he is  a former lawyer for the Securities and Exchange Commission, now turned forensic investigator, who alerted the SEC to the bank’s wrongdoing. Prior to this, Mr. Siedle, investigated  pension funds for overcharging beneficiaries, alerted regulators of a mutual fund scam being run by JPMorgan Chase in 2011, The Post has learned.

The larger part of his whistleblower award comes from  a $267 million settlement between JPMorgan and the SEC, which investigated the bank for steering high-net-worth clients toward its own investment funds that could cost more than those managed by rivals. The CFTC joined the investigation because some of the JPM investment products involved commodities. The bank agreed to pay $100 million to settle the CFTC probe. Siedle said he has filed about two whistleblower suits a year since the program started, and has no immediate plans for the award.

–Jeffrey A. Newman

Whistleblower Lawyer News has learned that the Commodity Futures Trading Commission (CFTC) today announced an award of approximately $30 million to a whistleblower who voluntarily provided key original information that led to a successful enforcement action. Previously, the highest award amount paid to a CFTC whistleblower was in March 2016 of more than $10 million (see CFTC Press Release 7351-16CFTC Announces Whistleblower Award of More Than $10 Million).  The award is the largest award made by the CFTC’s Whistleblower Program to date and is the fifth award made by the program. The CFTC’s Whistleblower Program was created by section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).  The CFTC pays monetary awards to eligible whistleblowers who voluntarily provide the CFTC with original information on violations of the CEA that leads the CFTC to bring a successful enforcement action resulting in monetary sanctions exceeding $1,000,000.  By law, the CFTC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.  Under the Dodd-Frank Act, employers may not retaliate against whistleblowers for reporting possible violations of the CEA to the CFTC.

“The Whistleblower Program has become an integral component in the agency’s enforcement arsenal,” said CFTC Chairman, J. Christopher Giancarlo.  “We hope that an award of this magnitude will incentivize whistleblowers to come forward with valuable information and provide notice to market participants that individuals are reporting quality information about violations of the Commodity Exchange Act [CEA].”

James McDonald, Director of the Division of Enforcement, stated: “Whistleblower submissions have become a significant part of our enforcement program, allowing us to pursue violations we might otherwise have been unable to detect.  That’s one reason why we’ve worked hard to expand our Whistleblower Program, including by increasing the protections afforded to whistleblowers that come forward.  I expect the Whistleblower Program to contribute even more substantially to our enforcement efforts going forward.”

 

Corey Thompson, the former general manager of a Spruce Head Island seafood company of Maine says he was fired after telling the president of the parent corporation about illegal actions that included repackaging expired seafood as new. He says that he was ultimately fired. The claims are part of a lawsuit filed June 18 in the Knox County court by Corey Thompson of St. George against Atwood Lobster LLC; Maine Lobster & Processing Inc.; Jorzac Inc.; Mazzetta Co. LLC; Beach Point,LLC; Londonderry Freezer LLC; Highwood Cold Storage; and Gloucester Seafood Processing

Mazzetta is one of the largest importer and producers of shrimp, mussels, lobsters, crab and fin fish, producing more than 100 million pounds of finished seafood product each year, according to its website. After he raised these concerns to Mazzetta Chief Executive Officer and President Tom Mazzetta, the suit alleges, Thompson was demoted to a maintenance position in March 2017. He repeated his concerns on May 21 that year, and was fired five days later. Mazzetta Co., founded in 1987, is a global importer and producer of shrimp, mussels, lobsters, crab and finfish, producing more than 100 million pounds of finished seafood product each year, according to its website.