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Astellas Pharma US, Inc. Reaches Agreement With DOJ

April 22nd, 2014 by Qui Tam

Astellas Pharma US Inc. has agreed to pay $7.3 million to resolve claims that it marketed and promoted Mycamine for pediatric use from 2005 through 2010, in violation of the False Claims Act. During that period, Mycamine was approved to treat serious fungal infections in adults. State Medicaid programs will receive $3.1 million of the settlement monies and the remaining $4.2 million will be paid to the federal government. Zane D. Memeger, U.S. Attorney for the Eastern District of PA stated that “[t]he settlement in this case further demonstrates our commitment to hold responsible any pharmaceutical company that disregards the FDA drug approval process and promotes drugs for uses before they have been deemed safe and effective”.

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Government Settles False Claims Act Allegations Against Kansas Cancer Treatment Facility And Its Owner

April 22nd, 2014 by Qui Tam

The Hope Cancer Institute, based in Kansas City, Kansas, and its Director, Dr. Raj Sadasivan, will pay $2.9 million to resolve a lawsuit filed by three former employees of the under the qui tam provisions of the False Claims Act. The suit alleges that from 2007 to 2011, Sadasivan instructed the cancer treatment center to submit bills for dosages of the cancer drugs Rituxan, Avastin and Taxotere that were higher than the amounts of the drugs actually administered to patients. In doing so, the Hope Cancer Institute and Dr. Sadasivan submitted inflated claims to Medicare, Medicaid and the Federal Employee Health Benefits Program in violation of the False Claims Act.

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IRS Whistleblower Program Takes Downturn

April 10th, 2014 by Qui Tam

The IRS today released to the U.S. Senate its annual update on its whistleblower program, which was characterized by numerous attorneys quoted in Sunday’s Pittsburgh Post-Gazette as a failure. According to the IRS report, the number of tips received by the IRS Whistleblower Office rose slightly in the 2013 fiscal year compared to the prior year, but the payments by the program and taxes recovered declined. The IRS used those tips to collect $367 million in taxes, which ranked third among the years since the program was revamped, but was far behind the $592 million in collections through the program in 2012.

The report indicates that the office would like Congress to add a provision to the law that would protect tax whistleblowers from retaliation. The IRS whistleblower program, revamped by Congress in 2006 to mandate payments to tipsters who help the agency collect at least $2 million, came under fire from attorneys who said it was too slow and sometimes took information but provided no reward.

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SEC Announces Additional $150,000 Payment To Recipient Of First Whistleblower Award

April 10th, 2014 by Qui Tam

The Securities and Exchange Commission today announced that the whistleblower who received the first award under the agency’s new whistleblower program will receive an additional $150,000 payout after the SEC collected additional funds in the case. The whistleblower…has now been awarded a total of nearly $200,000 since the award was announced on Aug. 21, 2012.

The award recipient helped the SEC stop a multi-million dollar fraud by providing documents and other significant information that allowed its investigation to move at an accelerated pace and prevent the fraud from ensnaring additional victims. The additional payout comes after the SEC collected an additional $500,000 from one of the defendants in the case. The SEC expects to collect additional money from defendants in this case as some are making payments under a periodic payment schedule ordered by the court.

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Mortgage Boss Still On Hook For False Claims

April 10th, 2014 by Qui Tam

Golden First Mortgage and its owner must face claims that their lies about regulatory compliance cost taxpayers $12 million, a federal judge ruled. The United States alleged in a 2013 complaint that Golden First and owner David Movtady “systematically violated their underwriting and quality control obligations” in loans endorsed by the Federal Housing Administration, “costing the United States millions of dollars on defaulted loans.” Golden First and Movtady tried to dismiss the lawsuit by arguing that the False Claims Act violation, as alleged, did not apply, was untimely and lacked specificity. U.S. District Judge Jesse Furman nevertheless upheld the False Claims Act claim on Monday.

More than 60 percent of Golden First loans have defaulted, and at least three-quarters of those defaults occurred in 2008. In that year, more than 30 percent of its mortgages defaulted within six months, the United States said. FHA operates the Direct Endorsement Lender mortgage-insurance program under the oversight, or lack of oversight, of the Department of Housing and Urban Development.

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Whistleblower Paid $63.9 For J.P. Morgan Concealment Of Bad Mortgages

March 25th, 2014 by Qui Tam

Whistleblower, Keith Edwards, will recover $63.9 million for his false claims act lawsuit in which he revealed that J.P. Morgan Chase had submitted thousands of mortgages for governmental insurance through the Federal Housing Authority and Veterans Administration that did not qualify for those government guarantees. The government ultimately had to cover for these loans when they defaulted.

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Pittsburgh Post Gazette Exposé On Local Whistleblowers

March 25th, 2014 by Qui Tam

The Pittsburgh Post-Gazette recently published an in-depth article on the growth of local false claims act cases and the whistleblowers behind them. The article focused on efforts of Dave Hickton, U.S. Attorney for the Western District of Pennsylvania, who has diverted more of his office’s resources to false claims act cases. The cases include:

  • U.S. ex rel. Lyttle v. AT&T, which alleged that that AT&T was reaping huge profits permitting a scan for relaying calls of deaf individuals;
  • U.S. ex rel. Washington v. Education Management Corporation, for compensating recruiters based on the number of students they enrolled in for-profit schools even if the students were not appropriate for the education. The case alleges that the corporation reaped $11 billion in federal student aid for ineligible students.

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Big Pharma Takes A Big Hit

March 25th, 2014 by Qui Tam

Endo Health and its subsidiary Endo Pharmaceuticals will pay $192 million to settle false claims act after whistleblower uncovered off-label marketing of Lidoderm. The FDA only approved Lidoderm for treatment of a complication of shingles. The company required its sales staff to market the drug for unapproved ailments including low-back pain and carpal tunnel syndrome. The improper marketing caused physicians to write prescriptions covered by Medicare and Medicaid.

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Referrals Get Ohio Hospital Into Hot Water

March 25th, 2014 by Qui Tam

Memorial Hospital of Ohio recently settled government claims related to improper referrals under the Anti-kickback and Stark statutes. These statutes restrict the financial incentives that health care providers can provide to other health care providers. The allegations concerned Memorial Hospital’s financial arrangement with a joint venture it had with a pain management physician and a relationship with an ophthalmologist who sold intraocular lenses at inflated prices through the hospital. The violations were self-reported. Memorial Hospital will pay $8.5 million to settle the violations.

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Hospice Caught Submitting False Reimbursement Claims

March 25th, 2014 by Qui Tam

Hospice Compassus settle false claims allegations for $3.92 million, $700,000 of which will be shared by two whistleblowers. The whistleblowers filed suit under the false claims act alleging that the hospice company sought reimbursement under Medicare for hospice care for ineligible patients.

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