Archive for October, 2013

Marc S. Raspanti To Present At An American Law Institute CLE

Thursday, October 31st, 2013

Marc S. RaspantiMarc S. Raspanti will be presenting at an American Law Institute Webinar CLE on November 7, 2013. He will present on “Litigating a False Claims Act Whistleblower Case.”

For more information and to register for this presentation, please see:

Reports To FBI And Internally Count For SEC Whistleblower

Tuesday, October 29th, 2013

On October 25, 2013, a United States District Court in the Sothern District of New York ruled that a SEC whistleblower who reported alleged SEC violations to the FBI and internally to his employer was a whistleblower under the anti-retaliation provisions of Dodd-Frank. In Rosenblum v Thomson Reuters (Markets) LLC, Judge Scheindlin held that Mr. Rosenblum’s disclosures were protected activity within the meaning of 15 U.S.C. § 78u.

The case against Thomson focused on whether Thompson’s release of consumer data at tiered stages to certain subscribers before it was released to the public constituted insider trading. Rosenblum alleged that he had reported his concerns to both the FBI and internally to his supervisors. The Court held that at the motion to dismiss stage, Rosenblum “has adequately alleged that Thomson’s decision to terminate him was motivated, in part, by reporting the alleged violations that are protected by Section 806 of the SOX, and has thus plausibly stated a claim under Section 78u–6(h)(1)(A)(iii).” The Court also issued a ruling dismissing Mr. Rosenblum’s request for punitive damages.

Study Shows U.S. Gets $16 For Every $1 Spent Fighting Healthcare Fraud

Thursday, October 24th, 2013

According to the organization, Taxpayers Against Fraud (“TAF”), the federal government receives over $16 for every $1 it spends investigating and prosecuting civil healthcare fraud.  This is even after subtracting the amount paid to whistleblowers.

Under the False Claims Act (“FCA”), healthcare fraud cases have grown significantly. Just 62 healthcare qui tam cases were recorded from 1987 to 1992 but 412 were recorded for last year alone.

The FCA to date has brought in over $40 billion since 1986.

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Kmart To Pay $2.55M For FCA Fraud

Wednesday, October 23rd, 2013

The Kmart discount chain, in order to settle False Claims Act complaints, has agreed to pay $2.55 million. 

Kmart violated the False Claims Act by billing Medicaid, the Federal Employee Health Benefits Program, and other health programs for all drugs included in a prescription in cases when it dispensed only part of the prescribed drugs.  The other drugs were returned to inventory.

The whistleblower in this case, an ex-Kmart pharmacist, will receive a $310,000 reward.

For more information, please see:

Fougera Pharmaceuticals To Pay $22.75M For Medicaid Fraud

Wednesday, October 23rd, 2013

Greg Abbott, Texas Attorney General, announced that Fougera Pharmaceuticals, Inc., a New York-based subsidiary of Sandoz Inc., fraudulently reported inflated drug prices to the Medicaid program and will now have to pay up.

Under the settlement agreement, Fougera will pay the state and the federal government a total of $22.75 million.  More than $10 million of the $22.75 million total will be paid to the state of Texas.  Because the Medicaid program is jointly funded by the State and U.S. taxpayers, the federal government is entitled to a percentage of the settlement proceeds.

Attorney General Abbott determined that Fougera had misreported the prices of various drugs to the Medicaid program over a period of several years.  Medicaid, in turn, was overcharged for some of the companies’ products.

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Britain Considering Reward System For Whistleblowers

Wednesday, October 23rd, 2013

Much like the United States, Britain is considering rewarding whistleblowers in order to encourage more to come forward in an effort to uncover fraud and other white-collar crimes.

The U.K. Home Office and other government agencies will examine the qui tam provisions of the U.S.  Under these provisions, whistleblowers receive a percentage of any financial penalties received when they work with prosecutors and regulators to uncover fraud.

The National Crime Agency (“NCA”) is Britain’s attempt to form a national police agency similar to the Federal Bureau of Investigation (“FBI”) here in the U.S.

For more information, please see:

Michael A. Morse To Present At A National Business Institute CLE

Monday, October 21st, 2013

Michael A. MorseMichael A. Morse will be presenting at a National Business Institute CLE on November 21, 2013. He will present on “False Claims Act and Qui Tam Litigation.”

For more information and to register for this presentation, please see:

Supreme Court Asks Solicitor General About Whistleblower Cases

Friday, October 11th, 2013

In a case that could have enormous implications for the federal government and the pharmaceutical industry, the United States Supreme Court has asked the Solicitor General to provide its position.  The issue involves Rule 9(b) of the False Claims Act, which requires a whistleblower to allege claims of fraud with specificity.  The Fourth Circuit Court of Appeals held that a whistleblower must “allege with particularity that specific false claims were presented to the government for payment.” In short, the appeals court wanted detailed and verifiable evidence of individual instances where the government was defrauded, even while acknowledging the difficulties that can be encountered in obtaining specific prescription invoices and the barriers posed by privacy laws.  The whistleblower has asked the Supreme Court to review the case, and the Supreme Court’s request for the position of the Solicitor General is being viewed as a positive sign by the whistleblower that the high court will accept review.

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More Incentives For Whistleblowers: New York Considers A New Law To Reward And Protect Whistleblowers

Friday, October 11th, 2013

Tracking the whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, new legislation would establish whistleblower bounties and protections for information given to the New York State Department of Financial Services (“DFS”) – a super agency formed in October 2011 to regulate banks and insurance companies in New York.  Since its inception, DFS has received considerable attention as a result of substantial settlements, including in August 2012 when Standard Chartered PLC agreed to pay $340 million to settle DFS allegations that the bank violated anti-money laundering laws in connection with transactions for Iranian customers.  Had the new legislation been in effect at the time and had the settlement resulted from information from a whistleblower, that whistleblower would be entitled to between 10 and 30 percent of the recovery, or $34 million and $102 million. 

For more information, please see:

Otterbox Sued Over Import Taxes

Friday, October 4th, 2013

OtterBox has been accused in a federal lawsuit in Colorado of failing to pay federal import taxes on its popular China-manufactured cell-phone cases.  The case was filed in 2011 but remained under seal until August 19, 2013.  According to court filings, OtterBox had previously advised the government that it had broken the law by not paying enough customs duties and has moved to dismiss the whistleblower’s lawsuit on the basis of this “prior disclosure.”

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