The founder and former president of Second Chance Body Armor, Richard Davis, has agreed to settle with the government after a sale of defective bullet proof vests that lead to life-threatening situations. The vests were purchased for federal, state, local and tribal law enforcement agencies. Under the False Claims Act, Davis will have to relinquish over a million dollars in assets.
The Bullet Proof Vests
Second Chance sold body armor to government agencies and then was reimbursed by the Department of Justice Bulletproof Vest Partnership (BVP) program. The DOJ alleged that Second Chance’s vests were defective when exposed to heat and humidity. They basically lose the ability to stop ballistic fire. The Department of Justice also claims that Davis knew about the faulty nature of the vests.
Kmart Corporation, a wholly owned subsidiary of Sears Holdings Corporation (SHC), has agreed to pay $32.3 million to the United States to settle allegations that in-store pharmacies in Kmart stores failed to report discounted prescription drug prices to Medicare Part D, Medicaid, and TRICARE.
The False Claims Act lawsuit, which was filed in 2008 by James Garbe, alleged that Kmart pharmacies offered discounted generic drug prices to cash-paying customers through various club programs but knowingly failed to disclose those prices when reporting to federal health programs its usual and customary prices, which are typically used by those programs to establish reimbursement rates.
“Pharmacies that are not fully transparent about drug pricing can cause federal health programs to overpay for prescription drugs.” said Acting Assistant Attorney General Chad A. Readler for the Department’s Civil Division. “This settlement should put pharmacies on notice that there will be consequences if they attempt to improperly increase payments from taxpayer-funded health programs by masking the true prices that they charge the general public for the same drugs.”
International Tutoring Services, LLC, f/k/a International Tutoring Services, Inc., and d/b/a Hospice Plus; Goodwin Hospice, LLC; Phoenix Hospice, LP; Hospice Plus, L.P.; and Curo Health Services, LLC f/k/a Curo Health Services, Inc.will pay $12.21 million to resolve allegations that they violated the False Claims Act by paying kickbacks in exchange for patient referrals. Curo Health Services is headquartered in Mooresville, North Carolina and operates eight hospice affiliates across 18 states. In September 2010, Curo Health Services purchased Hospice Plus, Goodwin Hospice, and Phoenix Hospice, and consolidated the hospice companies under the Hospice Plus brand, which operates primarily in and around Dallas, Texas.
The settlement resolves allegations brought by several whistleblowers that Hospice Plus, Phoenix Hospice, and Goodwin Hospice submitted claims to Medicare and Texas Medicaid that were rendered false as a result of the payment of kickbacks by the hospices, its owners and employees, and others. There were two alleged schemes. First, from 2007 through 2012, kickbacks were allegedly paid to American Physician Housecalls, a physician housecall company, in exchange for patient referrals to these hospice companies. They took the form of sham loans, a free equity interest in another entity, stock dividends, and free rental space. Second, from 2007 through 2014, kickbacks were allegedly paid to medical providers, including doctors and nurses as well as hospitals and long-term care facilities, in exchange for patient referrals to these hospice companies. The alleged kickbacks took the form of cash, gift cards, and other valuable items.
In addition to reaching a settlement with these defendants, the United States also requested that the Court permit the United States to intervene in and prosecute the fraud claims against two former executives, Dr. Bryan White and Suresh Kumar.
The Sunday Times has reported that Lance Armstrong and his management company Tailwind Sports Corporation have settled their legal battle with the SCA Promotions company, apparently paying more than $10 million to the company that agreed an insurance policy covering the cost of bonus payments for Armstrong’s Tour de France victories.
Still pending is the False Claims Act being pursued by the Justice Department seeking to recover the $30 million the US Postal Service paid to sponsor the team. The whistleblower Floyd Landis could receive as much as 30% of any award as part of a qui tam Whistleblower legal suit. The legal battle result in Armstrong being forced to pay three times the sponsorship figure if he loses the case, up to $90 million.
Jeffrey Newman represents whistleblowers. He is not involved in this case.
A new scheme has entered the pharmaceutical industry involving what the courts have now deemed as illegal payoffs in which drug-makers holding patents, sue generic manufacturers then settle the case paying millions to keep them from making the less expensive version.
Pharmaceutical manufacturer Cephalon was sanctioned by the Federal Trade Commission for the so called “reverse payment” settlements the company struck with competing drug makers to stop them from making generic versions of the narcolepsy drug Provigil.
The problem with companies doing this, says the FTC is that it harms consumers through delayed entry of generic drugs into the market, which are far less expensive. In some cases where the drugs were ultimately billed to Medicare, Pharma companies, including Cephalon have been charged with fraud under The False Claims Act. This is because when the generic drug is kept from the market, Medicare, which is your tax dollar, pays a much higher price for the medications. There is a False Claims Act case against Cephalon that is pending at this time.
A federal False Claims Act lawsuit filed by a whistleblower who was an employee at a plant owned by DuPont, says he saw that the company was leaking “potentially tons” of carcinogenic gas. The plant is located next to a residential neighborhood and primary school. Continue reading
Symantec Corporation the largest maker of computer security software may be required to pay as much as $145 million in damages relating to A Department of Justice investigation into whether the company failed to comply with government contracting rules concerning pricing. Continue reading