Articles Posted in Whistleblower Cases

Genesis Healthcare Inc. (Genesis) will pay the federal government $53,639,288.04, including interest, to settle six federal lawsuits and investigations alleging that companies and facilities acquired by Genesis violated the False Claims Act by causing the submission of false claims to government health care programs for medically unnecessary therapy and hospice services, and grossly substandard nursing care. Genesis, headquartered in Kennett Square, Pennsylvania, owns and operates through its subsidiaries skilled nursing facilities, assisted/senior living facilities, and a rehabilitation therapy business.

This settlement resolves four sets of allegations. First, the settlement resolves allegations that from April 1, 2010 through March 31, 2013, Skilled Healthcare Group Inc. (SKG) and its subsidiaries, Skilled Healthcare LLC (Skilled LLC) and Creekside Hospice II LLC, knowingly submitted or caused to be submitted false claims to Medicare for services performed at the Creekside Hospice facility in Las Vegas, Nevada by: (1) billing for hospice services for patients who were not terminally ill and so were not eligible for the Medicare hospice benefit and (2) billing inappropriately for certain physician evaluation management services.

Second, this settlement resolves allegations that from Jan. 1, 2005 through Dec. 31, 2013, SKG and its subsidiaries, Skilled LLC and Hallmark Rehabilitation GP LLC, knowingly submitted or caused to be submitted false claims to Medicare, TRICARE, and Medicaid at certain facilities by providing therapy to certain patients longer than medically necessary, and/or billing for more therapy minutes than the patients actually received. The settlement also resolves allegations that those companies fraudulently assigned patients a higher Resource Utilization Group (RUG) level than necessary. Medicare reimburses skilled nursing facilities based on a patient’s RUG level, which is supposed to be determined by the amount of skilled therapy required by the patient.


Three Tennessee prosecutors have filed a lawsuit accusing several drug manufacturers of deceptive marketing which they say resulted in an epidemic of addiction to painkillers. The lawsuit is also being taken by the guardian of a baby which was born dependent on opioid drugs.

According to the suit, Baby Doe spent his first days in the neonatal intensive care unit in agony as he went through detoxification. The infant boy, who is not identified, was born to an addicted mother survived after spending 14 days in a neonatal intensive care unit. The child continues to suffer from numerous health and learning disabilities.

The lawsuit was filed by three district attorneys who represent parts of the east Tennessee mountains in Appalachia. This has been the center of the prescription drug epidemic in Tennessee.


Dr. Lisa Wollman, a former anesthesiologist at Mass. General has filed a whistleblower lawsuit alleging that surgeons at the hospital who simultaneously handled two or more surgeries defrauded the government. They did so, she alleges, by submitting bills for surgeries at times they were not in the operating rooms for critical portions of the procedures by leaving the work for unsupervised residents.

Dr. Wollman’s COMPLAINT  states that she witnessed surgeons performing simultaneous surgeries between 2010-2015. They never informed the patients they were doing more than one surgery at a time. “The procedures did not merely overlap on their margins, they were instead scheduled at or about the same time, making it impossible for the teaching physician to assure that he could be physically present and ready to participate in the key or critical parts of each surgical procedure,” the Complaint states. These included high risk procedures including total shoulder replacement, cervical, lumbar and spine surgeries.

A whistleblower Patty Nixon, who worked as a sales representative for the drug manufacturer Insys, says that its major drug Subsys was prescribed for patients who never should have had it.She’s a former Insys sales rep turned whistleblower. According to the company web-sire the drug contains the massively strong medication fentanyl and it is a spray that is absorbed underneath the tongue, which results in faster absorption.

Whistleblower Nixon says her job was to contact insurance companies on behalf of the patients and the doctors to get the medication approved and paid for by their insurance company. Nixon says NBC that her supervisor told her ways to trick the insurers into believing it was “medically necessary.” The medication is approved only for cancer patients but was apparently sold to patients who did not have cancer.

Prosecutors say the company paid hundreds of thousands of dollars to doctors in exchange for prescribing Subsys. Three top prescribers have already been convicted of taking bribes from Insys. Insys has denied any responsibility and insists it shouldn’t be blamed for how doctors prescribe their products. The corporation is not facing criminal charges and is still selling Subsys — some $240 million worth of Subsys just last year.

Electronic Health Record company pays $155 million to settle Whistleblower case. Whistleblower to receive $30 million

Burlington Vermont. The Department of Justice has announced a unique and record-breaking settlement of a False Claims Act lawsuit against eClinicalWorks, the country’s leading provider of Electronic Health Record (“EHR”) software. The company has agreed to pay $155 million to end the case. It signals the critical importance of electronic health record systems to providing patient care and an increased focus on the products being offered.  The case was filed in Burlington Vermont and overseen by the United States Attorney’s Office in Vermont and the Department of Justice.

In May of 2015, Brendan Delaney, a software technician who had helped providers implement eClinicalWorks’ EHR software, filed a whistleblower case under seal alleging that eClinicalWorks had falsely obtained CMS certification of its software. Specifically, he alleged that eClinicalWorks’ EHR software exhibited various functionality shortcomings, such as failing to document and display information relating to the patient’s medications and laboratory results. The complaint said that had CMS known of the problems when eClinicalWorks’ software was undergoing CMS certification testing, CMS would not have certified the software and, therefore, providers who subsequently used eClinicalWorks’ software would not have received Meaningful Use incentive payments.

Financial whistleblower:

Daniel Schlicksup, an accountant who had been with Caterpillar Inc. for 16 years, tried to tell his bosses that it had illegally avoided more than $1 billion in taxes. No one seemed to listen.

Now, aided by documents provided by Schlicksup, the IRS, has determined that concluded in 2013 that Caterpillar had employed an “abusive” tax strategy; the agency later demanded $2 billion in back taxes and penalties. In 2014 a U.S. Senate investigative committee, with input from Schlicksup, questioned executives and determined that the company had avoided taxes on more than $8 billion in revenue.

whistleblower1-300x218eClinicalWorks, one of the country’s largest vendors of electronic health records will pay a $155 million to settle a whistleblower case where it is alleged that it caused health care providers to submit false claims to the federal government.

The acting U.S. attorney for Vermont said eClinicalWorks, of Westborough, Massachusetts, and three executives will pay the settlement to resolve allegations the company misrepresented the abilities of its software and paid kickbacks to some customers in exchange for promoting its products.

“Every day, millions of Americans rely on the accuracy of their electronic health records to record and transmit their vital health information,” Acting Assistant Attorney General Chad Readler, of the Department of Justice’s Civil Division, said in statement. “This resolution is a testament to our deep commitment to public health and our determination to hold accountable those whose conduct results in improper payments by the federal government.”

Bradley Birkenfeld, the former UBS Group AG banker who became a whistleblower helping U.S. authorities prosecute the Swiss bank for tax fraud and who won a $104 million award, has now filed a libel lawsuit against  UBS over concerning statements he published last November and this month by the New York Post and Bloomberg BNA Daily Tax Report. Birkenfeld said UBS acted with actual malice by referring to his “often unsubstantiated” recollections in a recent book and having been “convicted in the U.S. for, among other things, having lied to the U.S. authorities.”He said UBS did this as part of an international campaign to impede his effort to expose its “decades-long wrongdoing,” and undercut the credibility and sales of his book “Lucifer’s Banker: The Untold Story of How I Destroyed Swiss Bank Secrecy.”

The lawsuit  was filed in a New York state court in Manhattan and seeks $10 million of both compensatory and punitive damages. It also names Peter Stack, UBS’ head of media relations in the Americas, as a defendant. The New York Post and Bloomberg are not defendants.
Birkenfeld provided tips that led UBS in 2010 to pay a $780 million U.S. fine for helping about 19,000 wealthy Americans hide up to $20 billion in secret bank accounts. More recently, he testified in a similar probe involving the bank in France. Birkenfeld’s lawsuit stated that the Post clarified its article to show he was “never charged with or convicted of perjury or lying to U.S. investigatory authorities.”

Agility Public Warehousing Co. KSC (Agility), a Kuwaiti company, has agreed to Pay $95 million to settle  criminal, civil, and administrative cases arising from allegations that Agility overcharged the United States for food supply food for U.S. troops from 2003 through 2010.

The civil claims and criminal charges arose from allegations originally raised in a civil whistleblower suit against Agility and another Kuwaiti company, The Sultan Center Food Products Company, K.S.C. (TSC). Kamal Mustafa Al-Sultan, a former vendor of Agility, filed the lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act (FCA), which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Mr. Al-Sultan will receive $38.85 million as a result of the civil action he filed, which is captioned U.S. ex rel. Kamal Mustafa Al-Sultan v. Agility Public Warehousing Co., K.S.C. et al., No 1:05-cv-2968-GET (N.D. Ga.). The whistleblower was represented by the firm Moss & Gilmore LLP.

In its complaint, the United States alleged that Agility and TSC knowingly overcharged the Department of Defense for locally available fresh fruits and vegetables that Agility purchased through TSC, and falsely charged the full amount of TSC’s invoices despite agreeing that Agility would pay 10 percent less than the amount billed. The United States also alleged that Agility failed to disclose and pass through rebates and discounts it obtained from U.S.-based suppliers, as required by its contracts.

insider-trading-guys-300x200The Securities and Exchange Commission (SEC) has charged four men  for alleged involvement in an insider trading scheme that used confidential government information regarding Medicare reimbursements From the Centers for Medicare and Medicaid Services (CMS). Christopher Worrall, an employee at (CMS), allegedly gave confidential information to David Blaszczak, a former co-worker who later worked as a political intelligence analyst.

Worrall allegedly told Blaszczak three different times about pending CMS reimbursement decisions that could affect stock prices. Prosecutors allege that Blaszczak passed that information on to two hedge fund analysts who paid him as a consultant, Theodore Huber and Jordan Foge, who made $3.9 million from the insider trades.Mr. Blaszczak, a former employee at the agency and founder of Precipio Health Strategies, was accused of pumping a friend at the agency for market-moving information that he passed to his clients at Deerfield, an unsealed indictment said.In his interactions with the hedge fund partners, Mr. Blaszczak bragged about his access to the inside information. In an email message, he said his analysis differed from that of one of his competitors because that competitor “doesn’t know anyone at cms. His guesses are just wild random guesses,” according to a separate complaint filed by the SEC.Mr. Blaszczak  passed the information to his hedge fund clients, sometimes within minutes of the communications, prosecutors said.

The information involved tips about potential changes in government policy and regulations for things such as radiation therapy and kidney dialysis and how these policies would affect publicly traded companies.