Articles Tagged with False Claims Act

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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. jeffrey.newman1@gmail.com. www.JeffreyNewmanLaw.com

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. jeffrey.newman1@gmail.com

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. jeffrey.newman1@gmail.com

A Charlotte North Carolina couple, Max and Jan Hauser, 70 and 71, will receive over $1.05 million as their share in the $5.25 million settlement reached by the Department of Justice with RxAmerica, a subsidiary of CVS Caremark under the False Claims Act. The lawsuit alleged that RxAmerican misrepresented to seniors the cost of prescription drugs on Medicare’s online “Plan Finder” that is used to compare the pricing and benefits of different Meciare D plants. Max and Jan Hauser said they had reviewed their insurance plans explanation of benefits form and realized that the company was charging more money to the Part D Plan considmers than it had represented in the Plan Finder. Jan Hauser, 71 said she and her husband were contacted by a lawyer who encouraged them to file the complaint after reading a newspaper article in 2008 describing their findings. Jan Hauser said that the settlement should show other seniors that it is important to review their Explanation of Benefits forms to make sure they are being charged correctly.

Jeffrey Newman represents whistleblowers. jeffrey.newman1@gmail.com

The Relator was an employee “Scale Master” for a Massachusetts company providing road construction material for The Big Dig. He was required to create false tickets to establish that truckloads of material were delivered to job sites, even though they never were. The Relator filed a False Claims Act case and the government intervened. The claim was settled for a significant sum.

On May 20, the U.S. Department of Justice informed a federal judge that it was discussing settlement of claims relating to the illegal marketing of Depakote. A whistleblower suit was filed against Abbott by Susan Mulcahy, Doreen Merriam and Sondra Knowles, all from Massachusetts and specialty executives with Abbott. They alleged that the company tried to promote Depakote for the off label treatment of Alzheimer’s disease and for use as a chemical restraint for elderly patients who become agitated or aggressive. Depakote was approved by the FDA in 1983 as a treatment for epilepsy. Depakote has been linked to an increased risk that a child will be born with severe birth defects or malformations when the medication is taken during the first trimester. In 2006, a warning about the potential risk of Depakote birth defects was placed on the label after a stidy found that 20% of thepregnant mothers who gave birth while on Depakote had a child with malformations or a birth defect.

Ven-A-Care, a small Key West Fla. company is fighting a campaign against drug companies that overcharge the government and since starting has collected over $2 billion dollars for state and federal governments. In addition, it has won over $380 million for itself in the form of whistleblower awards. The most recent victory was a $170 million verdict against generic drug maker Actavis which was charged with overcharging Medicaid for drugs.Pharmacies and drug providers buy medicines from drug companies and distribute them to Medicaid recipients. Medicaid then reimburses the pharmacies for the cost of the drugs, plus a markup for the cost. But Ven-A-Care owners observed that some companies were routinely charging the pharmacies one price but told Medicaid and Medicare that the price was much higher. Then when the government reimbursed the pharmacies this resulted in a windfall profit. Ven-A-Care sued under a law called the False Claims Act, which allowed it to recover a reward of a percentage of moneys the government collected. This is considered the most successful case for the whistleblower, even brought and is exemplary of a trend in which companies are becoming whistleblowers as opposed to individuals.