by Author | Mar 14, 2014 | False Claims Act
Can a whistleblower report Hospital Kickbacks by filing a qui tam case under the False Claims Act?
Yes. On March 13, 2014, the US DOJ announced it settled such a case with Memorial Hospital in Ohio for $8.5 million. There the government alleged the hospital violated the False Claims Act (FCA), Anti-Kickback Statute (AKS) and Stark Statute by engaging in improper financial relationships with referring physicians.
The settlement involved allegations of an improper “joint venture” among Memorial and a pain management physician and ophthalmologist, who purchased intraocular lenses and then resold them to Memorial at inflated prices.
This is a somewhat unusual FCA case in that Memorial self-disclosed the unlawful transaction to the government. Hats off to Memorial for “doing the right thing.”
Read more http://www.justice.gov/opa/pr/2014/March/14-civ-270.html
by Author | Mar 12, 2014 | False Claims Act
Can a relator get a second bite at the apple in spite of his Whistleblower Attorney’s early procedural errors?
Tim McInnis Esq.
The US Court of Appeals for the Second Circuit recently saved a whistleblower’s lawsuit from dismissal caused by his own lawyer’s missteps. In this case, the whistleblower-relator filed a complaint in the SDNY under the qui tam provisions of the federal and New York State’s False Claims Acts (FCAs) against two major construction companies.
He alleged the defendants overbilled the governments for public construction projects, including the post-9/11 One World Trade Center. After investigating the allegations, the federal and state authorities declined to join the action. Thereafter, the relator’s attorney sent the district court judge an informal letter saying that, “I have spoke[n] to my client and in view of the government’s decision not to intervene he has decided not to pursue this matter any further.” Later, the relator found out that a different US Attorney’s Office (EDNY) was investigating the matter and he re-filed his case in that district.
Thereafter, the defendants persuaded the new district court judge to throw the case out on the basis that the old case had been previously “dismissed with prejudice” and thus could not be re-instituted. Turns out the district court judge was in error. As the Second Circuit noted: in order for a case to be dismissed “with prejudice” under Fed. R. Civ. P. 41, certain representations have to be. Since they had not been made in this case, the original case was deemed to have been dismissed “without prejudice” and the relator was permitted to go forward with his action. Lucky break. The whistleblower lawyer could have avoided the entire episode if he had filed a formal “stipulation of dismissal without prejudice” under Rule 41.
This case is captioned: Magdy M. Youssef, Plaintiff-Appellant, – v – Tishman Construction Corporation, Turner Construction Company, Defendants-Appellees. Docket No. 12-4135, 2014 U.S. App. LEXIS 4439 (2d Cir.).
by Author | Mar 9, 2014 | False Claims Act
How much will whistleblower recover in stunning $614 million Mortgage Fraud False Claims Act (FCA) qui tam settlement between the government and JP Morgan Bank? The government announced on March 7, 2014 that it will be paying the whistleblower $63.9 million. While that is a very large amount, it is less than the potential range of the whistleblower’s reward under the FCA, which was between $92.1 million (15%) and $153.4 million (25%). One explanation for this difference is that the government may have uncovered some parts of the misconduct independently of the information and assistance provided by the whistleblower. The whistleblower reportedly had worked in the government insurance unit at JP Morgan for a number of years. The United States is willing to pay significant amounts of money for assistance in cases like this to help uncover and prosecute difficult to detect and complex frauds affecting government programs.
On February 4, 2014, the government announced that JP Morgan agreed to pay $614 million to settle charges that it presented approximately 500 defective mortgage loans for government insurance coverage and guarantees by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) that improperly overstated the creditworthiness of the borrowers or in some other way had not complied with the bank’s mortgage underwriting obligations. When the homeowners defaulted on the loans, the government (meaning the American taxpayers) was stuck having to pay for them.
The JP Morgan case had begun with the filing of a whistleblower qui tam complaint in January 2013 in the Manhattan federal court and was wrapped up in only about 13 months. Typically, False Claims Act (FCA) cases take much longer to get resolved, sometimes many years. So the JP Morgan settlement is noteworthy for both its sheer size and the short time in which it was completed. Read more http://www.justice.gov/opa/pr/2014/February/14-civ-120.html
by Author | Mar 7, 2014 | False Claims Act
Medicare Fraud Criminal Plea. An unlicensed Detroit-area physician pleaded guilty to billing Medicare for $11.5 million and making it look like the healthcare services were performed by licensed medical doctors when they were not. Jose Mercado-Francis, MD faces 10 years imprisonment when he is sentenced.
This case does not appear to have been initiated by the filing of a civil qui tam False Claims Act complaint.
Read more http://www.justice.gov/opa/pr/2014/March/14-crm-240.html
by Author | Mar 7, 2014 | False Claims Act
Infrequent Price Fixing FCA Case settled March 7, 2014. Contract shippers Sea Star Line has agreed to pay $1.9 million, and Horizon Lines has agreed to pay $1.5 million to settle qui tam whistleblower allegations that they conspired to fix the price of shipping contracts on which they were bidding. The contracts were for shipping routes between the continental United States and Puerto Rico and were for the delivery of US Mail (Postal Service) and food (Department of Agriculture). The whistleblower will receive $512,719 for his information and assistance.
Read more: http://www.justice.gov/opa/pr/2014/March/14-civ-242.html
