Archive for April, 2014

Astellas Pharma US, Inc. Reaches Agreement With DOJ

Tuesday, April 22nd, 2014

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

Tuesday, April 22nd, 2014

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

Thursday, April 10th, 2014

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

Thursday, April 10th, 2014

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

Thursday, April 10th, 2014

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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