Articles Tagged with False Claims Act

IMG_0299-300x200Heritage Pharmaceuticals Inc., a New Jersey-based company, has been ordered to pay more than $7 million after being charged with conspiring with its competitors to fix prices, rig bids, and allocate customers.

According to the Department of Justice, Heritage Pharmaceuticals Inc. was part of an antitrust conspiracy which involved several other companies and leaders in the pharmaceutical space. This conspiracy took place from 2014 to 2015 and had the shared goal of fixing the prices of a medication that is used to treat diabetes.

In addition to the $7 million that Heritage Pharmaceuticals Inc. will have to pay as part of a civil claim, they will also have to pay a $225,000 criminal penalty and cooperate with a criminal investigation that remains open. The $7 million fee will resolve allegations against the company that fall under the False Claims Act since it allegedly violated the Anti-Kickback Statute.

IMG_0004-300x200Nabil Fakih, a licensed pharmacist, Michigan Board of Pharmacy member, and owner of a Dearborn Heights drug store, was charged with healthcare and wire fraud and indicted by a grand jury. The Indictment accused Fakih of wrongfully taking millions of United States dollars from Medicare, Medicaid and Blue Cross Blue Shield (BCBS), dating back to 2011.

According to the indictment, Fakih is accused of falsely submitting claims on behalf of Dial Drugs. He was reported to be overbilling Medicaid and Medicare by $569,670 while overcharging BCBS by $558,079.

Fakih and others billed insurance companies for prescription drugs such as the antipsychotic medication, clozapine, and the sedative alprazolam. Claims for these drugs were on behalf of people who had died prior to the claimed date of delivery. This is according to government allegations.

fraud-300x188A Civil War Era Law Puts Customs Fraud in The Spotlight

The False Claims Act is shining a light on customs fraud and reshaping lawsuits around the country. Whistleblower attorneys are expecting to see an uptick in the customs fraud cases they handle related to importing goods, according to the Wall Street Journal.

Last year, a U.S. appeals-court ruling made room for more whistleblower lawsuits related to the Civil War-era law known as the False Claims Act. The Supreme Court backed the appeals court, agreeing it has broader implications.

Atlantic-Blue-Crabs-300x200The owner of a Newport News seafood business was charged today by criminal information with conspiring to commit Lacey Act violations for blending foreign crab meat with Atlantic blue crab meat, then labeling the blended crab meat as “Product of USA”.

James R. Casey, 74, of Poquoson, is the owner and President of Casey’s Seafood, Inc. According to court documents, from at least July 2012 through June 2015, Casey knowingly conspired to replace Atlantic blue crab with crab meat from Indonesia, China, Thailand, Vietnam, and Central and South America. Casey and his co-conspirators falsely labeled at least 397,917 pounds of crab meat, with a retail value in the millions of dollars, as Atlantic blue crab and “Product of the United States”. According to court documents, Casey directed employees to remove foreign crabmeat from the original shipper’s packaging containers, blend and combine foreign crab meat from one processor with crab meat from another processor, and place it into different packing containers with a label declaring that the contents were a “Product of USA,” despite knowing that the contents were imported crab meat. Casey also directed employees to place labels with “Product of the USA” on containers that covered up labels that stated “Product of Brazil” or “Product of China”.

Casey has been charged with conspiracy to defraud the United States, and faces a maximum penalty of five years in prison, if convicted. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Pharmaceutical company Mylan will pay a total of $20.3 million to the Massachusetts Medicaid program (MassHealth) to resolve allegations that it knowingly underpaid rebates owed to the Medicaid program for EpiPens dispensed to MassHealth members, Attorney General Maura Healey announced today.

The payment is part of a global settlement with the United States, the District of Columbia, and all 49 other states settling allegations against Mylan Inc. and its wholly-owned subsidiary, Mylan Specialty L.P. (Mylan).

“Mylan knowingly misrepresented this drug to MassHealth in order to underpay on rebates and make a profit at the expense of our state,” said AG Healey. “This settlement brings critical funds back to our MassHealth program. Companies that receive payments from taxpayer-funded programs must be held accountable when they abuse this system.”

Business that are active in importing goods for sale in the United States are revealing their competitor’s fraud in cheating on customs tariffs and collecting upto 30% of what the government recovers from their claims.  Filing a claim under the False Claims Act  stops cheating competitor from fudging on tariffs and allows for a significant bounty  for reporting this fraud to the federal government. L Toyo Ink SC Holdings Co. Ltd. (“Toyo”), a l Japanese manufacturer of printing inks with affiliates in New Jersey and Illinois, agreed to pay $45 million to settle claims of tariff evasion brought under the False Claims Act. The suit alleged that Toyo was deliberating evading paying required duties on imports by knowingly misrepresenting the country of origin for a particular colorant product. While Toyo represented the country of origin for the colorant to be Japan and Mexico, the colorant was actually imported from China and India and undergoing a superficial finishing process in Japan and Mexico.

The Department of Justice is aware of an increase in customs fraud  including such  illegal conduct such as mislabeling products to conceal their true country of origin, removal of required labeling prior to delivery of products out of the country, undervaluing products to avoid paying import duties and other forms of tariff evasion.

The government settled a $6.3 million case under the False Claims Act brought by a former sales account manager for a Chinese-owned logistics and warehousing company, CMAI. CMAI imports automotive parts which are distributed to Ford, General Motors and Chrysler. CMAI paid $6.3 million to resolve charges that the company evaded customs duties on the imported automotive parts.

Major defense contractor Science Applications International Corporation (SAIC) has agreed to pay Uncle Same $6 million to settle allegations that it circumvented the bidding process allowing it to obtain lucrative contracts. The fraud and abuse in this case was brought forth by an active duty military officer who first reported his concerns up the chain of command but no one would listen. Airforce Lieutenant Colonel Timothy Ferner a career military man, was Chief of staff for the Coalition and irregular Warfare Center at Nellis Air Force Base in Las Vegas. SAIC was awarded a multi million dollar contract to help CIWC develop enhanced warfare capabilities in the fight against terrorism. Lt. Col Ferner became suspicious that the normal contract procedures were bypassed and found out about a middlemen used by SAIC to arrange for the contract. In addition, Lt. Col. Ferner witnessed waste and abuse and the more contractors that came in, the less work was done. Lt. Col. Ferner was told by his superiors to keep quiet and they threatened to deploy him to Afghanistan while he was undergoing cancer treatment. He was ultimately fired from his job and given a menial position with no responsibility. He was represented by the James Foyer Law Firm. This is a story worth telling. Some smart Hollywood producer should pick up as this man’s courage in the face of his own illness and his career for the sake of his nation and w=for what is right. Congress should take a look at what his superiors did and did not do in the face of this fraud and to encourage others to come forward. Where is Lt. Col. Ferner and why haven’t we heard more? Under the False Claims Act, he will receive a portion of the $6 million recovery but he lost his career in the military for his courage. Stay tuned. –

According to the Wall Street Journal, emails and other documents reviewed by the paper’s reporters reveal information uncovered by a tipster alleging that Glaxo’s China sales staff provided doctors with speaking fees, cash payments, lavish dinners and all expenses paid trips in return for prescribing the drug company’s products. Glaxo says it is looking into the matter. Like in the U.S., patients in China need a doctor’s prescription to buy regulated drugs and drug sales persons meet frequently with doctors to try to get them to prescribe products. However, unlike the U.S., the government controls all of China’s health care system so any purchased are through government paid physicians. Under the U.S. Foreign Corrupt Practices Act it is illegal for companies with significant U.S. operations to bribe foreign officials or their agents in exchange for business. Whistleblower tipsters are now coming forward to be part of the Securities and Exchange Commission’s new whistleblower program allowing the tipsters a reward of up to 30% of the moneys recovered. The Glaxo whistleblower says that between 2004 through 2010 Glaxo regularly gave cash to its sales staff in China and some of that went directly to doctors at Chinese hospitals in return for prescribing drugs from the company. Recently Glaxo settled a case with the U.S. Department of Justice relating to its drug marketing practices. Under the new SEC program, whistleblowers may come forward anonymously through counsel, thereby protecting themselves. Jeffrey Newman represents whistleblowers.

Freeman Health System, a healthcare provider and hospital system in Joplin Missouri will pay $9,316,139 to end allegations that it violated The Stark Law and the False Claims Act by knowingly providing incentive pay to doctors based on the volume of their referrals or the revenue realized by those referrals. In a federal lawsuit, the United States said that Freeman provided incentive pay to 70 physicians employed at clinics operated by the health system based on the revenue generated by their referrals for certain diagnostic tests and other services performed at the clinical.

Jeffrey Newman represents whistleblowers.

Dozens of governmental agencies were significantly and deliberately overcharged by millions of dollars for pens, ink, furniture and other goods under a contract with Office Depot says whistleblower David Sherwin, former Office Depot salesman handling  government accounts. Sherwin filed a whistleblower case in fedral court under the False Claims Act which allows for a reward for revealing fraud in billing the government. His lawsuit says that Office depot  intentionally misapplied discounts and changed prices in violation of its agreements. It also failed to fulfill the lowest-price guarantees and switched some customers to an alternate pricing option without telling them it would cost them more money, the suit says.  The most recent contract which was in place between 2006-1020 was used by about 10,000 government and nonprofits nationwide for $3.6 billion in purchases. Some state agencies also may have been defrauded. In 2011, Dalla County accused Office Depot of not offering its lowest prices through the contract and is demanding $1.8 million.

Jeffrey Newman represents whistleblowers.