False Claims Act Resource Center

Archive for October, 2010

Quicksort Mailing Companies to Pay $4.2 Million for False Claims Act Violation

Wednesday, October 27th, 2010

Quicksort, Inc., Quicksort LA Inc., and Quicksort Sacramento Inc. have settled allegations of violating the False Claims Act and have agreed to pay the United States $4.2 million.  The California-based companies were charged with misrepresenting the pre-sort level of mail submitted to the U.S. Postal Service from 2008 through 2010.  

 For more information see:  http://www.postalreporternews.net/2010/10/20/california-based-mailing-firms-to-pay-4-2-million-to-resolve-false-claims-act-allegations-for-underpayment-of-postage/

Miami-Dade Healthcare Operators Charged in Biggest Medicare Fraud Strike Force Case in History

Wednesday, October 27th, 2010

Four Miami-Dade healthcare operators have been charged with scheming to defraud Medicare out of a $200 million by fraudulently billing for mental health services. A whistleblower lawsuit was filed against American Therapeutic, the nation’s largest chain of community mental health centers licensed by Medicare.  American Therapeutic and its senior employees were charged with scheming to bill Medicare for unnecessary group therapy sessions or sessions that never occurred.  Senior Justice Department officials announced this as the biggest Medicare Fraud Strike Force case in history.  Authorities say the level of such fraud is eye-opening.  Last month, President Obama signed the Small Business Lending Act into law.  This legislation includes a provision requiring Medicare to flag suspicious claims using computer programs with predictive modeling capabilities.  Much like a single excessive purchase on one’s credit card, Medicare will now have the ability to identify claims that require additional scrutiny.

For more information see: http://www.miamiherald.com/2010/10/21/v-fullstory/1884170/federal-agents-round-up-ring-of.html

Johnson & Johnson to Pay Fifth Largest Settlement in the United States

Wednesday, October 20th, 2010

Johnson & Johnson was required to pay $257.7 million to the state of Louisiana for wrongfully marketing the antipsychotic drug Risperdal.  The case centered on claims that J&J and Ortho-McNeil Janssen sent correspondence letters in 2003 to 700,000 doctors which labeled Risperdal as safer then its competitors and minimized its links to diabetes.   The verdict comes as the second trial loss in a state lawsuit brought over the misleading marketing of the drug. The spokesperson for J&J’s Ortho-McNeil Janssen Pharmaceuticals unit said the company will appeal.  J&J’s settlement is the 5th largest in the U.S. so far to date.

For more information see:  http://www.bloomberg.com/news/2010-09-28/j-j-owes-louisiana-for-risperdal-claims-jury-told-update1-.html

Countrywide Execs Settle $73 Million Lawsuit with the SEC

Wednesday, October 20th, 2010

Angelo R. Mozilo, founder and former chief executive of Countrywide Financial Corporation, and two others settled a $73 million deal with the SEC to avoid going to trial on allegations of fraud and insider trading.  The SEC suit, filed in June 2009, alleged that Countrywide’s exposure to risky loans was misrepresented by the three men and also accused Mozilo of insider trading.  Mozilo was personally accountable for a $22.5 million fine, which is the largest penalty ever paid by a senior executive of a public company in an SEC settlement.  All of the $73 million settlement will go to former Countrywide shareholders. 

For more information see:  http://www.latimes.com/business/la-fi-mozilo-sec-20101016,0,862177.story

Massachusetts Contractor Sued For Not Using Minority- and Woman-owned Businesses

Thursday, October 14th, 2010

Petricca Construction Company, a Massachusetts-based contractor, was allegedly involved in construction fraud and violating the Massachusetts False Claims Act.  A new lawsuit filed by the Massachusetts Attorney General claims that Petricca falsely certified compliance with contracts that required Petricca to use minority- and woman-owned businesses for work equal to a certain value of the contract.  Petricca allegedly used non-minority and non-woman contractors instead.  The suit claims that between 2004 and 2008, Petricca filed approximately 184 fraudulent certifications and fell nearly $600,000 short of its commitment.  The whistleblower in this case is Larry’s Trucking, a minority contractor who was allegedly cut out of work by Petricca.

For more information see:  http://www.legalnewsline.com/news/229051-whistleblower-coakley-take-on-construction-company

Over $6 Billion Paid to Government by Pharmaceutical Companies

Thursday, October 7th, 2010

With the recent $422.5 million settlement by Novartis in the Eastern District of Pennsylvania, now seems to be a good time to step back and look more broadly at the magnitude of recent FCA settlements. Over the past 22 months alone, a total of 11 pharmaceutical companies have paid over $6 billion to the government.

For a list of recent settlements, see:


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