An experienced whistleblower attorney, successful trial attorney, former criminal prosecutor, and former reporter Representing whistleblowers reporting fraud on the Federal State Governments

 A New York-based  pediatrics practice Freed, Kleinberg, Nussbaum, Festa & Kronberg M.D., LLP (Practice), as well as various current and former partner physicians of the Practice, including Arnold W. Scherz, M.D., Mitchell Kleinberg, M.D., Michael Nussbaum, M.D., Robert Festa, M.D., and Jason Kronberg, D.O. (Partners) have agreed to pay $750,000 to settle allegations of Medicaid fraud. The agreement settles allegations that the Practice and Partners did not routinely enroll all of their employee providers treating Medicaid patients in the Medicaid program, and instead used the Partners’ Medicaid provider identification numbers to bill for the treatment of Medicaid beneficiaries by unenrolled employee providers. An investigation conducted by the Attorney General’s office found that the false claims occurred at many of the practice’s Long Island locations. The pediatrics practice has locations in Holbrook, Port Jefferson, Shirley, and Wading River, NY. New York’s Medicaid program will receive $450,000 as part of the $750,000 settlement agreement.

“Providers who are not properly enrolled in Medicaid before treating Medicaid beneficiaries undermine the integrity of the program and its efforts to serve our neediest New Yorkers,” said Attorney General Schneiderman. “Those serving Medicaid beneficiaries must be properly credentialed and thoroughly vetted prior to Medicaid enrollment to ensure that beneficiaries get the care they deserve from qualified professionals.”

Specifically, the settlement agreement resolves allegations that, from July 1, 2004 through December 31, 2010, the Practice and Partners did not enroll all of their provider employees in Medicaid prior to allowing them to treat patients who were Medicaid beneficiaries. Instead, providers employed by the Practice would treat Medicaid patients and bill under the Partners’ Medicaid identification numbers, as if the billing Partners were the ones seeing those patients, even when they had not.

opioid-300x200DOJ Takes a Step That Could Help in The Opioid Crisis

This week the Justice Department made a big move that could be a game changer for the nation’s opioid crisis. According to Cleveland.com, the DOJ will make a large swath of data on painkillers available, hoping the intel will be used in the fight against big pharma.

The DOJ has made its position clear when it comes to chasing after the legal makers and distributors of these drugs. Attorney General Jeff Sessions even went so far to create an Opioid Fraud Unit in order to target 12 federal districts the DOJ believes have been hardest hit by the opioid epidemic. The Opioid Fraud Unit uses data to find and target doctors or clinics they suspect are overprescribing opioids. They also want to go after pharmacists who are not properly distributing the pills. But with the release of this new data, they are hoping to help with settlement talks between the drug companies and the local governments suing them over the nation’s opioid epidemic.

Some common super-bacteria have developed a  resistance to a last-resort antibiotic, worrying doctors that the dangerous bacteria can evade one of what was thought to be a last resort antibiotic. But researchers from Emory University found this drug-resistant bacteria.

The results of their study were just publlished in the journal mBio. The Emory study’s focus, Carbapenem-resistant Klebsiella pneumoniae,the most common  “superbug” bacteria that are resistant to most antibiotics kills up to 50% of the people they infect. Over two million people in the U.S. are sickened every year with antibiotic-resistant infections, with at least 23,000 dying, according to the Centers for Disease Control and Prevention.

Colistin is an antibiotic which doctors administer to patients when the bacteria are resistant to all other antibiotics. However, the Emory study suggests that colistin may not work in some patients, even though lab tests show that it should. Carbapenem-resistant Klebsiella pneumoniae cause pneumonia, bloodstream and other infections in people with weakened immune systems, who are usually hospitalized with other conditions. The scientists infected mice with the bacteria and treated them with colistin, but the mice died.

A former Russian spy, Sergei Skripal, who was granted refuge in England is reported to be in critical condition after exposure to an unknown substance. Skripal, 66, was granted refuge in the UK following a “spy swap” between the US and Russia in 2010, according to the Guardian newspaper. At a press conference, Wiltshire police said two people — a man in his 60s and a woman in her 30s — had been found unconscious on a bench at a shopping center in Salisbury. The pair were known to one another.They are currently being treated at the Salisbury District Hospital’s intensive care unit, where their condition remains critical.

 Skripal, once a colonel in Russia’s GRU military intelligence service, was convicted in Russia of treason in 2006 but exchanged as part of a Cold War-style spy swap in 2010 on the tarmac of Vienna airport. Comparisons are being made to the murder of ex-KGB agent Alexander Litvinenko with radioactive polonium-210 in London in 2006, a killing which a British inquiry said was probably approved by President Vladimir Putin.

The Kremlin has repeatedly denied any involvement in the killing.

Deloitte Touch will pay $150 million to resolve a case taken by the US Department of Justice alleging that it failed to detect a long-running fraud by a former mortgage broker. The case relates to Deloitte’s role in the 2009 collapse of Taylor, Bean & Whitaker (TBW), a mortgage originator. Lee Farkas, TBW’s founder, and chairman skimmed millions of dollars to buy a private jet, vacation homes and vintage cars, was jailed in 2011 for 30 years. Several other senior executives at TBW and Colonial Bank, a $26bn-in-assets lender which supplied TBW with loans, were sentenced to long stretches in prison.  Deloitte was TBW’s independent outside auditor from 2002 until 2008, during which time it signed off on financial statements that were “materially false and misleading”, the DoJ said. TBW’s fraud involved the sale of fictitious or double-pledged home loans. These caused losses on the government-backed mortgage insurer, the Federal Housing Administration.

When auditors fail to exercise their professional judgment . . . there will be consequences Chad Readler, acting assistant attorney general for the justice department’s civil division  Deloitte said: “Members of [TBW] management, including its CEO, were convicted of engaging in a complex, collusive fraud with a counterparty bank specifically aimed at misleading our organization and investors. Deloitte & Touche is deeply committed to the highest standards of professionalism, and we stand behind this work that dates back over a decade. Nonetheless, we are pleased to have resolved this matter to avoid the risk and uncertainty of protracted litigation.”

In a similar case, a US federal judge ruled last month that PwC should have done more to avert the collapse of Colonial. Damages are due to be assessed next month. When Colonial failed a few days after TBW, there was a $2.8bn cost for the Federal Deposit Insurance Corporation, which sued PwC.

 Massachusetts whistleblower case

VA physician Dr. Sarah Kemble,  Chief of Medicine for the U.S. Department of Veterans Affairs for the central and western Massachusetts region revealed on her deathbed that the medical care for veterans at the Northampton Medical Center is substandard, especially regarding psychiatric care. Dr. Kemble wrote a 23-page affidavit revealing the inside information give days before she died of cancer in December. The VA’s Office of Accountability and Whistleblower Protection has is now investigating.

The Northampton Medical Center advertises itself as a 24-7 urgent care hospital but, according to the affidavit, this is not true and in addition, there are no lab service, radiology, clinical pharmacist or appropriate psychiatric service available during nights or weekends.

j-300x198Steven M. Butcher, 39, owner of MedMax LLC, which provided marketing services for compounded medications, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal Court for conspiracy to commit healthcare fraud and violate the Anti-Kickback Statute.

Butcher used his company, MedMax,  to convince people to obtain unneeded compound medications and then bill the costs to various private and federal healthcare insurance plans.  MedMax was a marketing company for compound medications.  Butcher also paid several kickbacks from 2014 to 2015 for many individuals to fraudulently bill a health care benefit program that primarily serviced military families, called TRICARE, for unnecessary compound medications.

Compounded pharmacies prepare personalized medications based on specific prescriptions that include instructions for exact strength and dosage.

The Brattleboro Memorial Hospital will $1,655,000 to the United States and the state of Vermont  to settle claims that it “knowingly”  presented “false claims for payment to Medicare and Medicaid.” The U.S. Attorney’s Office alleged that between January 2012 through September 2014, “BMH knowingly submitted or caused to be submitted a number of outpatient laboratory claims lacking documentation necessary to support reimbursement by Medicare and Medicaid.” According to a press release, a whistleblower Amy Beth Main filed a complaint against the hospital under the federal False Claims Act. Qui tam lawsuits are a type of whistleblower lawsuit that rewards whistleblowers in successful cases where the government recovers funds lost to fraud. According to Norman Watts, of Watts Law Firm, in Woodstock, Main will receive between 15 and 20 percent of the settlement, from which he will recover his attorney fees. Ms. Main worked for the hospital in an administrative role in the financial services department.

The case was investigated by the United States Attorney’s Office for the District of Vermont, with assistance from the Office of the Inspector General of the Department of Health and Human Services, and by the Medicaid Fraud and Residential Abuse Unit of the Vermont Attorney General’s Office.

According to a company filing, the Internal Revenue Service says that Caterpillar Inc. owes the United States Government back taxes and penalties in the amount of about $2.3 billion.  Caterpillar does not agree and says it will continue to vigorously oppose the IRS position. The tax liabilities stem from Caterpillar’s offshore tax strategy and has been steadily increasing while the IRS completes audits of the company’s income tax filings dating back to 2007,  some issues carrying back to 2005. The offshore tax which Caterpillar started in 2000 uses a comprehensive accounting of its structure which was first revealed by a Caterpillar tax specialist who became a whistleblower claiming that the company retaliated against him for insisting the tax strategy had problems. A U.S. Senate subcommittee investigation that labeled the tax maneuver an abusive corporate tax shelter.

The tax strategy involved the company’s  parts business and a Swiss subsidiary. Profits for the parts sales were recorded in Switzerland — and taxed at a lower negotiated rate than in the United States even though nearly all parts operations remained in the United States.  The Swiss subsidiary at the center of the tax strategy also featured prominently in a different investigation that dramatically unveiled itself for the public in the spring of 2017.

The case then went to the U.S. District Court for the Central District of Illinois. In March of last year,  federal agents simultaneously raided Caterpillar’s global headquarters in Peoria and facilities in Morton and East Peoria to seize documents and information regarding parts sales, export controls and money transfers between the parent company and overseas subsidiaries, among other items — all with a particular focus on the Swiss subsidiary.

Bitcoins exchange operator  Jon E. Montroll has been charged by The Securities and Exchange Commission with fraud for running the operation as an “unregistered securities exchange.”   The operator of  the cryptocurrency investment platform was charged with lying to U.S. regulators to hide the fact that hackers stole more than 6,000 of his customers’ Bitcoins.In its lawsuit, the SEC also accused Montroll of  defrauding users and making false and misleading statements. In addition to failing to disclose the cyberattack on BitFunder, he also sold unregistered securities that purported to be investments in the exchange and misappropriated funds from those investors, the SEC said.

Before the cryptocurrency began to develop, Montroll operated two online Bitcoin services,. BitFunder.com facilitated the buying and trading of virtual shares of businesses listed on its platform, while WeExchange Australia Pty. Ltd. functioned as a Bitcoin depository and currency exchange. All WeExchange and BitFunder users’ Bitcoins were held in a common account, according to federal investigators. “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,” Marc Berger, director of the SEC’s New York Regional Office, said in a statement.

The U.S. Attorney’s Office for the Southern District of New York also filed a complaint against Montroll Wednesday for “perjury and obstruction of justice during the SEC’s investigation,” according to the statement. Obstruction of justice can carry a penalty as high as 20 years in prison.