On August 16, 2010, New York Governor David A. Paterson signed into law legislation strengthening New York’s False Claims Act.  The New York False Claims Act allows individuals to bring civil actions (“qui tam”) on behalf of the state to recover fraudulent payments and overpayments made to third-party suppliers of goods and services.  The state may choose to intervene in such an action or allow the action to proceed as a private suit.  The new legislation permits “qui tam” plaintiffs to bring actions for tax fraud, but only when the net income or sales of the defendant total $1 million or more and the damages pleaded in the action exceed $350,000.  Moreover, the legislation strengthens the protections for whistle-blowers who recover information concerning the misuse of government funds.  The value of these recoveries to New York State is estimated at over $20 million each year.

The President of the New York State Bar Association, Stephen P. Younger, commended Governor Paterson by stating, “This legislation strengthens the existing New York False Claims Act by enhancing the state’s ability to obtain financial recovery for losses suffered due to fraud perpetrated by contractors and others against the government.”  President Younger continued, “The state bar and its Commercial and Federal Litigation section have long been supporters of the New York False Claims Act.  I want to commend the Governor and the State Legislature for making these much-needed enhancements to further protect the interests of all New Yorkers.”

For more information see:  http://readme.readmedia.com/State-Bar-Commends-Governor-Paterson-for-Signing-Legislation-to-Strengthen-New-Yorks-False-Claims-Act/1695467

Universal Health Services, one of the nation’s largest healthcare management companies, is embroiled in a suit pending in Sacramento County, California related to allegations brought by private whistleblowers under California’s False Claims Act that the company bilked the state of public money through special education schools the company owns.   According to the allegations, brought by former employees and a student, UHS-owned schools in California, including UHS Keystone-Sacramento and a former Elmira campus in Solano, allegedly falsified records, charged the state for absent students, understaffed classrooms, and employed uncertified teachers while receiving public education funding.  The plaintiffs’ attorney was quoted as saying: “They were warehousing the kids and not providing sufficient education.  They make a lot of money by charging all this money for educational services. I think it’s a nationwide scam.”

Read more: http://www.sacbee.com/2010/07/24/2911751/sacramento-special-education-school.html#ixzz0uuWhOz5W

 For more information, see:  http://www.sacbee.com/2010/07/24/2911751/sacramento-special-education-school.html#ixzz0unSAhlWp

Maryland Lieutenant Governer, Anthony Brown, presently campaigning with Martin O’Malley for re-election this fall, announced that the state’s health department has uncovered $26 million in fraud and waste within the state’s Medicaid program for fiscal year 2010. The Maryland Department of Health and Mental Hygiene has recovered fraudulently obtained funds of approximately $100 million since FY 2006, and expects the number to increase beginning in October, when the Maryland False Health Claims Act of 2010, for which Brown lobbied, goes into effect. The State Health Department believes that total recoveries for the year, taking into account the new Act, could reach $46.5 million, a 75% increase over the prior year.

For more information, see http://weblogs.baltimoresun.com/news/local/politics/2010/07/lt_governor_anthony_brown_tout.html

 and http://www.dhmh.state.md.us/pressreleases/2010/ltgov072210.html

Sodexo, the world’s largest private food purchaser, has agreed to settle claims that it overcharged New York state school districts and the State University of New York from 2004 until 2009.  For $20 million, Sodexo will settle the claims of 21 public school districts and SUNY that Sodexo failed to pass along rebates it received from the suppliers of the food and equipment.  Under the contracts with the various entities and under federal and state laws, Sodexo was required to acknowledge or pass on the rebates. The settlement is the largest under the New York State False Claims Act that does not involve Medicaid Funds.

For more information, see http://www.ag.ny.gov/media_center/2010/july/july21a_10.html

The Florida Attorney General settled claims under the state’s false claims act against Office Depot for allegedly overcharging government offices for supplies.  The case was settled for $4.5 million.  As part of the settlement, the state of Florida will also be reimbursed an additional $1.3 million for its investigative and legal expenses. 

The claims centered on allegations that Office Depot unilaterally and without notice switched pricing plans, resulting in higher prices to the government, as well as to unrelated non-profit organizations.  David Sherwin, a former Office Depot account manager reported the overpricing scheme in May 2008. 

More information can be found at: http://www.myfloridalegal.com/newsrel.nsf/newsreleases/370FC8DA33D527C9852577380060920D