Articles Posted in whistleblower

More than 1,000 cities, counties, school districts and other government entities in California – including Los Angeles and Santa Clara County – will share in a $68.5 million settlement paid by Office Depot for allegedly overcharging them for office supplies. The lawsuit alleged that Office Depot  failed to give most of its California government customers the lowest price it was offering any government customer as required under its contracts. Other pricing misconduct also was alleged.

Participants in the contract are guaranteed to receive Office Depot’s best available prices for government purchasers, according to Sherwin’s complaint. But Office Depot allegedly gave Los Angeles, Santa Clara and the other California entities that are part of the settlement a lower discount rate than other government entities were given.

Federal regulations  require nursing homes to retain consulting pharmacists such as those provided by Omnicare to ensure that residents’ drug prescriptions are appropriate. The United States alleges that Omnicare solicited and received kickbacks from Abbott in exchange for purchasing and recommending the prescription drug Depakote for controlling behavioral disturbances exhibited by dementia patients residing in nursing homes served by Omnicare.  Omnicare’s pharmacists reviewed nursing home patients’ charts at least monthly and made recommendations to physicians on what drugs should be prescribed for those patients, the Government says. The government also alleges that Omnicare touted its influence over physicians in nursing homes in order to secure kickbacks from pharmaceutical companies such as Abbott.

Abbott allegedly made payments to Omnicare described as “grants” and “educational funding,” even though their true purpose was to induce Omnicare to recommend Depakote, an anti-seizure drug for patients with dementia. For example, according to the complaint, Omnicare solicited substantial contributions from Abbott and other pharmaceutical manufacturers to its “Re*View” program. Although Omnicare claimed that Re*View was a “health management” and “educational” program, the complaint alleges that it was simply a means by which Omnicare solicited kickbacks from pharmaceutical manufacturers in exchange for increasing the utilization of their drugs on elderly nursing home residents.

In internal documents, Omnicare allegedly referred to Re*View as its “one extra script per patient” program. The complaint also alleges that Omnicare entered into agreements with Abbott by which Omnicare was entitled to increasing levels of rebates from Abbott based on the number of nursing home residents serviced and the amount of Depakote prescribed per resident. Finally, the complaint alleges that Abbott funded Omnicare management meetings on Amelia Island, Florida, offered tickets to sporting events to Omnicare management, and made other payments to local Omnicare pharmacies.

In May 2012, the United States, numerous individual states, and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s civil liability under the False Claims Act for paying kickbacks to nursing home pharmacies.

In a prior case in June, federal officials Wednesday accepted the company’s offer to pay $124.2 million to settle a suit accusing the company of allegedly offering improper financial incentives to skilled nursing facilities in northern Ohio in return for their continued selection of Omnicare to supply drugs to elderly Medicare and Medicaid beneficiaries.

Last February, the company paid $4 milion to resolve allegations that Omnicare solicited and received kickbacks from California-based drug manufacturer Amgen Inc. in return for implementing programs designed to switch Medicaid beneficiaries from a competitor drug to Amgen’s Aranesp product.

In August 2012, it settled a 2007 lawsuit claiming it paid a kickback in buying a pharmacy company, and that it submitted false claims for reimbursement to government health insurers. Additional terms of the settlement were not released.

In May 2012, Omnicare settled another case with the U.S. Department of Justice for $50 million. The agency called it the “largest controlled substance settlement in history,” and said Omnicare gave nursing home residents medicines without a prescription, with missing prescription information or without documentation. It resulted in the company being agreeing to operate under a corporate integrity agreement with the federal government.

Finally, Omnicare agreed in November 2009 to pay $98 million to settle civil allegations by the U.S. government and various states that it took kickbacks from Johnson & Johnson.

Jeffrey Newman represents whistleblowers

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The Justice Department recovered $2.3 billion from whistleblower cases alleging healthcare fraud schemes in fiscal 2014.

It was the fifth consecutive year the Justice Department recovered more than $2 billion from cases alleging fraud against Medicare,Medicaid and Tricare. 9. Whistle-blowers, are allowed to file lawsuits on behalf of the government. The government can later decide whether to intervene. In successful lawsuits, whistle-blowers are entitled to a percentage of the money recovered, leading to large rewards in some cases. In fiscal 2014, more than 700 whistle-blowers filed cases in healthcare and other areas, and reaped $435 million.

Much of the moneys recovered this year was from the pharmaceutical industry.Johnson & Johnson agreed to pay $1.1 billion in November 2013 to settle allegations that Johnson & Johnson promoted the drugs Risperdal, Invega and Natrecor for uses not approved by the FDA, causing providers to submit hundreds of millions of dollars in false claims to federal healthcare programs.

The Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.

The amount is more than three times the $8 billion collected in FY 2013.  The largest civil collections were from affirmative civil enforcement cases, many of which were brought under the whistleblower provisions of the False Claims Act, in which the United States recovered government money lost to fraud or other misconduct or collected from  individuals and/or corporations for violations of federal health, safety, civil rights, tax, or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements.  It includes approximately $13.7 billion in payments made directly to the Justice Department, and $11 billion in indirect payments made to other federal agencies, states and other designated recipients.

The largest single source of collections came from civil penalties paid by financial institutions to resolve financial fraud claims stemming from the 2008 financial crisis, including significant amounts paid by JPMorgan and Citigroup Inc, to resolve federal and state civil claims related to the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS).  Both resolutions include record penalties under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and in addition, also provide billions of dollars of relief to struggling homeowners.

Department collections also included hundreds of millions in fines from an ongoing   investigation into institutions involved in the manipulation of the London Interbank Offered Rate (LIBOR), including UBS Securities Japan Co. Ltd., and RBS Securities Japan Ltd., a wholly owned subsidiary of The Royal Bank of Scotland plc (RBS).  Hundreds of millions in additional collections resulted from the department’s ongoing investigation into international price-fixing and bid rigging in the auto parts industry.  For instance, Bridgestone Corp., a company based in Tokyo, Japan, agreed to plead guilty and to pay a criminal fine for its role in a conspiracy to fix prices of automotive anti-vibration rubber parts installed in cars sold in the United States and elsewhere.

The department also collected millions in criminal penalties after resolving investigations into violations of the Foreign Corrupt Practices Act (FCPA). For instance, Diebold Inc., an Ohio-based provider of integrated self-service delivery and security systems, pleaded guilty to violating the FCPA by bribing government officials in China and Indonesia and falsifying records in Russia in order to obtain and retain contracts to provide ATMs to state-owned and private banks in those countries.

Jeffrey Newman represents whistleblowers

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Kobi Kastiel, co-editor of the Harvard Law School Forum on Corporate Governance and Financial Regulation has come up with strong recommendations for corporations seeking to avoid SEC whistleblower cases: create an internal corporate fraud program to identify fraud issues.

Under the SEC Whistle-blower Program, eligible whistle-blowers can recover 10 percent –30 percent of the amount of any money sanctions collected that exceed $1 million in actions brought by the SEC . A successful corporate whistle-blowing program requires protections for the whistleblowers as many are afraid to report internally says Kastiel.

Jeffrey Newman represents whistleblowers

Bostwick Laboratories, Inc., an anatomic and pathology lab based in Uniondale, New York, has agreed to pay the United States$6,048,000 to resolve allegations regarding violations of the False Claims Act.

The qui tam complaint was filed in May 2008. It alleges that Bostwick Laboratories improperly billed Medicare and Medicaid for tests and services referred in violation of the Anti-Kickback Statute and for tests performed without a doctor’s order or consent. The Justice Department decided in June 2011 not to intervene in the case. In 2012, Senior District Judge S. Arthur Spiegel issued a well- reasoned order denying the defendants’ motions to dismiss. U.S. ex rel. Daugherty v. Bostwick Laboratories, et al., 2012 U.S. Dist. LEXIS 178641 (S.D. Ohio Dec. 18, 2012).

The case against Bostwick Laboratories settled after the company entered into settlement discussions with Mr. Daugherty and the United States based on its inability to pay the full value of the damages sought in the qui tam action.

A whistleblower has filed suit on behalf of the United States of America charging Dongwon Industries, South Korea’s largest fishing company and owner of Starkist Tuna, of defrauding the U.S.

The Complaint alleges that a former Dongwon exec used his daughters’ acquired U.S. citizenship to create paper companies in the state of Delaware to obtain U.S. vessel documentation for Korean owned ships. This allowed the company to obtain fishing licenses reserved only to US registered vessels. US taxpayers pay $18 million per year for these licenses.

The lawsuit also charges that Dongwon failed to report oil discharge and dumping at sea.

A Florida psychiatrist and CEO of the Hollywood Pavilion psychiatric facility was sentenced to 25 years in prison for submitting false Medicare claims for $67 million. A jury also found that Medicare was tricked into paying $40 million to Hollywood Pavilion and that the CEO,  Karen Kallen-Zury covered up the fraud scheme by falsifying the records of ineligible patients and fabricating marketing contracts with patient recruiters who were paid significant sums of money per patient.

According to a Department of Justice Ms. Kallen-Zury is the first executive from a licensed state hospital to be prosecuted by the Medicare Fraud Strike force for committing Medicare fraud.

The DOJ also said that the hospital deliberately targeted disabled substance abusers by conning them to spend weeks locked down in a psychiatric hospital. The defendants paid illegal bribes and kickbacks to patient brokers to obtain Medicare beneficiaries as patients, at Hollywood Pavilion but they did not qualify for psychiatric treatment.

British bank HSBC one of the largest banks and money service organizations in the world is continuing to launder significant sums of money for terrorist groups, despite having paid a $1.9 billion penalty in 2012 over money laundering allegations involving Mexican drug dealers. So says a former Anti-Money Laundering Officer Everett Stern who says he unearthed evidence about continued money laundering by the bank.

Stern found a Saudi fruit company was sending millions to a high level figure in the Yemeni wing of the Muslim Brotherhood and that HSBC was letting millions to be transferred from the Karaiba Supermarkets in Africa to Tajco, a company which the US Treasury says are major financiers of the Lebanese Shiite Group Hezbollah. When the bank ignored his concerns, Sterns took the information to the FBI.

In July of last year, the Senate Permanent Subcommittee on investigations released a study showing that HSBC’s key U.S. affiliate HSBC Bank USA N.A. known as HBUS provided U.S. dollars and banking services to several banks in Saudi Arabia and Bangladesh with links to terrorist financing.

The pharmaceutical services firm PharMerica illegally dispensed controlled substances by dispensing drugs to nursing homes and facilities without physician authorized prescriptions, according to a complaint filed by the Department of Justice and whistleblower pharmacist Jennifer Denk.

Ms. Denk revealed the wrongdoing after she observed prescriptions including those for addictive drugs like fentanyl and oxycodone were being filled with no doctor’s signature.

According to the complaint, PharMerica served 300,000 residents, filled 40 million prescriptions annully and generated 45 percent of its revenue from prescription drugs paid for by Medicare.