Archive for July, 2013

When It Comes To The False Claims Act, Blood Is Not Always Thicker Than Water

Thursday, July 25th, 2013

Zachery Wolfson, the son of Mitchell Wolfson, the chief medical officer and founding partner of Park Avenue Medical Associates (“PAMA”), reportedly filed a False Claims Act complaint that led to the New York company settling Medicare fraud allegations for $1 million.

The Department of Justice alleged that PAMA billed for psychiatry services for patients whose dementia or cognitive disorders actually made them unable to benefit from psychotherapy.  They were also charged with billing for services where there was no documentation.   PAMA billed for over 90,000 exams that “were duplicative, failed to comply with Medicare rules and reflected a lack or coordination of care both among PAMA’s own psychiatrist, psychologists and nurses, and between PAMA’s employees and staff at the facilities at which PAMA performed services.”

The younger Wolfson looks to collect as much as $250,000 for filing the original complaint.  The settlement, can be seen here.

For more information, pleases see:
http://www.mcknights.com/psychiatry-company-settles-medicare-fraud-allegations-for-1-million/article/303824/

Armstrong: Postal Service Should Have Known I Was Doping

Thursday, July 25th, 2013

In a 25-page rebuke of the allegations that Lance Armstrong defrauded the government when he took sponsorship dollars from the Postal Service with the understanding that there would be no use of performance-enhancing drugs, Armstrong says that the Postal Service should have known that he was doping.

“Instead, the Postal Service renewed the Sponsorship Agreement,” Armstrong’s lawyers, John Keker and Elliot Peters of Keker & Van Nest, LLP, wrote, and “basked in the favorable publicity of its sponsorship.”  Armstrong was stripped of his seven Tour de France titles, lost all of his major sponsorship deals, and is banned for life from competition after admitting that he used performance-enhancing drugs.

The U.S. Department of Justice joined the suit in February of 2013.  If found to have violated the False Claims Act, Armstrong and others named in the suit, would be liable for as much as triple the amount of the sponsorship, which was roughly $40 million between 1995 and 2004.

For more information, please see:
http://online.wsj.com/article/SB10001424127887324328904578624563537684642.html

Pennsylvania – State False Claims Act Legislation Brewing

Friday, July 12th, 2013

The U.S. Federal whistleblower statute enables individuals known as whistleblowers to unveil fraud within the government. Enacted in the 1860’s and significantly modified in the mid-1980’s, this statute has thus far led to the recovery of more than $30 billion for the U.S. Government in the last three decades alone by giving incentives and protection to those with information and willingness to blow the whistle on the unlawful activity.

Similar to the U.S. Federal whistleblower statute, individual states have also enacted their own whistleblower statutes to cut back on state fraud. Nearly half of all states to date have enacted some form of a whistleblower program, and Pennsylvania is quite possibly next. Recently, lawmakers have introduced whistleblower legislation in the state. If passed, this would allow whistleblowers to file a civil suit against anyone alleged to have committed fraud against the state. Of course, one of the many incentives to this statute and the federal statute alike would include a considerable reward for the whistleblowers themselves.

If this legislation is approved, Pennsylvania can look forward to a new source of revenue as well as a new means of punishment for those who cheat the state’s taxpayers through fraudulent activities.

Whistleblower statutes are designed to prevent and rectify fraud related activities on both the federal and state levels, and the Pennsylvania state government aims to be the next state to join the ranks and increase its level of protection for its state taxpayers.

For more information, please see:
http://www.justicenewsflash.com/2013/07/11/with-whistleblower-bill-pennsylvania-lawmakers-look-to-take-on-fraud_20130711111661.html

CyTerra Corporation Agrees To Pay Almost $2M To Resolve Fraud Allegations

Thursday, July 11th, 2013

CyTerra Corporation, a defense contractor and maker of IED sensors for the US Military, has agreed to pay $2 million to resolve civil-fraud allegations. The whistleblowers in the case, two former finance executives with the company, alleged that CyTerra inflated the costs of labor and materials to increase the company’s profits. Shortly after blowing the whistle on the company, both whistleblowers were fired. They sued CyTerra for wrongful termination and are still in litigation.

The False Claims Act suit was filed in 2006 in federal court in Massachusetts and thereafter taken over by the U.S. Justice Department. CyTerra denied the allegations but stated that they would settle claims to avoid incurring the time and costs of any future litigation. The Justice Department recognized that the settlement does not find the company liable for the allegations. The whistleblowers will each receive half of 19% of the settlement totaling $361,000.

For more information, please see:
http://touch.orlandosentinel.com/#section/-1/article/p2p-76602153/

Doctors Hospital Of Augusta, LLC Has Agreed To Pay $1,020,000

Thursday, July 11th, 2013

The DOJ has recently announced that the Doctors Hospital of Augusta, LLC has agreed to pay $1,020,000 to settle allegations that they submitted or caused the submission of false claims to the TRICARE and Medicare programs. The Doctors Hospital of Augusta, LLC is owned and operated by HCA Inc. and Radiation Oncology Associates, LLP. The claims alleged that procedures were performed without the necessary level of physician supervision.

The suit was filed under the whistleblower provisions of the False Claims Act. The case was investigated by Special Agent Ryan S. Coble, Department of Health and Human Services, Office of Investigations; Special Agent Randy J. Temples, Department of Defense, Defense Criminal Investigative Services; and Investigator Kimberly Reinken of the United States Attorney’s Office, Southern District of Georgia. The United States was represented by Assistant United States Attorney Scott R. Grubman.

For more information, please see:
http://chronicle.augusta.com/news/crime-courts/2013-07-08/doctors-hospital-pays-1-million-settlement?v=1373300942

55 Hospitals To Pay U.S. More Than $34 Million To Resolve False Claims Act Allegations Related To Kyphoplasty

Wednesday, July 10th, 2013

Fifty-five health care facilities in twenty-one states have agreed to pay a total of over $34 million to settle allegations of submitting false claims to Medicare for minimally invasive kyphoplasty procedures. Kyphoplasty is used to treat specific spinal fractures frequently caused by osteoporosis. The settling hospitals were accused of booking patients for costly inpatient procedures rather than standard, less expensive, outpatient procedures commonly used for kyphoplasties. “Whenever hospitals knowingly overcharge Medicare, critically needed resources are wasted and health costs are driven up,” said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services. More than 100 hospitals have contributed to a total of approximately $75 million in settlements for mischarging Medicare for kyphoplasty procedures.

For more information, please see:
http://www.justice.gov/opa/pr/2013/July/13-civ-745.html

Sprint Nextel Must Face NY Suit Over Tax Fraud

Wednesday, July 10th, 2013

On July 1, New York Supreme Court Justice O. Peter Sherwood denied a motion to dismiss a lawsuit against Sprint Nextel Corp. for deliberately not collecting or paying millions of dollars of taxes for its cell phone service. The suit was brought by New York Attorney General Eric Schneiderman who alleged, based on whistleblower information, that Sprint failed to bill customers for more than $100 million in taxes for its wireless services over the course of seven years. Schneiderman attributed Sprint’s decision not to collect or pay taxes to a nationwide effort by the Kansas-based company, Overland Park, to attract rivals’ customers and make its service $4.6 million less expensive per month. In addition to seeking three times the amount of underpaid taxes, the lawsuit also demands penalties. While Justice Sherwood allowed the tax collection lawsuit to continue against Sprint, he dismissed a conspiracy claim against the company, ruling that certain claims applying to periods before March 31, 2008 are barred by a three-year statute of limitations. “[This ruling] sends a message that tax dodgers will be exposed and prosecuted to the fullest extent of the law,” said Schneiderman.

For more information, please see:
http://www.reuters.com/article/2013/07/02/sprint-tax-idUSL2N0F800F20130702

DOD Contractors to Get New Whistleblower Protections

Tuesday, July 2nd, 2013

Beginning this month, whistleblowers working for Defense Department subcontractors will benefit from a new law intended to provide increased protection to those who expose potential wrongdoing. Contractors who report suspected fraud, waste, and abuse within their company rather than directly to the Department of Defense inspector general will also gain protection, according to the National Defense Authorization Act for Fiscal Year 2013. “Since internal complaints weren’t covered under the statute, those people who did make an internal hotline complaint and believed they were retaliated against had nowhere to get protection,” said Nilgun Tolek, a DOD investigation director. The law protects whistleblowers by requiring that contractors offer, “clear and convincing evidence,” that they would have taken the same disciplinary action against an employee even if he or she had not come forward with an allegation of abuse, Tolek said.

For more information, please see:  http://www.defense.gov/news/newsarticle.aspx?id=120384