VMware and Carahsoft Technology Corp. reached a settlement of $75.5 million with the General Services Administration (GSA) on Tuesday, June 30. This settlement resolves allegations made by a former Vice President at VMware that the companies violated the False Claims Act (FCA). The whistleblower alleged that the cloud service providers overcharged the federal government for software products and related services from 2007 through 2013. Although VMware still asserts that the allegations are false, they have agreed to pay the settlement money in order to put an end to the lawsuit. Continue reading
In the largest False Claims Act settlement in which the government did not intervene, DaVita Healthcare Partners has come to an agreement to pay the government $450 million. The false claims lawsuit involved DaVita’s largest division, DaVita Kidney Care. The division was accused of intentionally wasting medicine in order to defraud federal healthcare programs out of millions of dollars. This settlement concludes the false claims act cases that DaVita has defended in the past years, paying out nearly $1 billion to settle the three whistleblower lawsuits. Continue reading
The Sixth Circuit has held that a construction contractor’s violation of the Davis-Bacon Act can also create liability under the False Claims Act (FCA). U.S District Judge Kevin H. Sharp issued a judgment ordering Circle C Construction, LLC to pay the United States a total of $762,894 for violation of the FCA. These Davis-Bacon Act and FCA violations were connected to Circle C’s construction project on the Fort Campbell military base. Continue reading
Inspire Pharmaceuticals, a specialty pharmaceutical company with its principal place of business in Lake Forest, Illinois, has reached a settlement agreement of $5.9 million with the US Department of Justice (DOJ). The settlement money will go to the United States and various state governments. According to the US District Attorney’s press release, Inspire admitted to starting a marketing campaign in 2008 to broaden the customer base for AzaSite by focusing on, among other things, AzaSite’s claimed anti-inflammatory effects, which were not approved by the Food and Drug Administration (FDA), and were not demonstrated by substantial evidence or substantial clinical experience. INSPIRE further admitted that AzaSite was prescribed for blepharitis, and that claims to treat blepharitis were submitted to federal healthcare programs for payment. This case was initially brought forward by a whistleblower in 2010 under the qui tam provisions of the False Claims Act. The United States quickly intervened, taking over the case. Continue reading
Children’s National Medical Center Inc. has agreed to pay $12.9 million to settle two allegations of defrauding the government in violation of the False Claims Act. The first claim alleged that Children’s National, which has since changed its name to National Health System, inflated its cost reports which forced the Department of Health and Human Services to increase its reimbursement payments. The second claim alleged that Children’s National over reported the number of beds it had available, causing higher payments from the Virginia and D.C. Medicaid Programs and Medicare. Washington D.C. based Children’s National provides pediatric care throughout the D.C area. The Department of Justice (DOJ) alleged that Children’s National cost the Medicare Trust Fund millions of taxpayer’s dollars. Continue reading
A judgment against Trinity Industries for $663.4 million was made on June 9, 2015 for violations of the False Claims Act. According to whistleblower Joshua Harman, Trinity Industries failed to report a change made to highway guardrails to the Federal Highway Administration (FHWA). The change that Trinity Industries failed to report has caused the guardrails to malfunction. Instead of operating to absorb the impact of a crash, the guardrail heads, or end terminals, have worked almost as spears, piercing through the car and causing several fatalities.
The United States Department of Justice (DOJ) has filed a lawsuit against Quicken Loans, alleging that Quicken’s approval of inappropriate loans resulted in millions of dollars in loss to the government. Michigan-based Quicken Loans, the third-largest mortgage lender in the country, allegedly made hundreds of these loans from September 2007 until December 2011 through the Federal Housing Administration (FHA) program. The complaint alleges that Quicken disregarded FHA rules when approving loans. This suit is one of many recently filed by the DOJ under the False Claims Act against several of the nation’s largest lenders. Continue reading
A federal judge in Pennsylvania has allowed the majority of a relator’s False Claims Act case against Cephalon Inc. to proceed, alleging a kickback scheme involving off-label drug marketing. Treanda is a chemotherapy drug that was approved by the U.S. Food and Drug Administration (“FDA”) in October 2008 as a treatment for indolent non-Hodgkins lymphoma (“iNHL”). It was approved as a second-line treatment—the FDA approved it only for patients whose cancer progressed after treatment with another regimen. As early as December 2007, Cephalon allegedly promoted Treanda off-label for front-line, rather than second-line, treatment of iNHL, a use not approved by the FDA. Accordingly, this off-label promotion resulted in the submission of false claims for reimbursement from government health programs. Cephalon also allegedly illegally paid kickbacks to physicians in order to further its off-label promotion scheme, conspired with physicians to further its off-label promotion scheme, violated its obligations to the government under its Corporate Integrity Agreement, and retaliated against relator Matthew Cestra for investigating and reporting his concerns regarding Cephalon’s conduct. Cephalon was subsequently acquired by Teva Pharmaceutical Industries Ltd. in 2011. Continue reading
First Tennessee Bank, headquartered in Memphis, Tennessee, has reached a settlement with the U.S. Department of Justice regarding the bank’s actions during the mortgage crisis between 2006 and 2008. The False Claims Act case alleged that First Tennessee Bank knowingly originated and underwrote mortgage loans that should never have been approved because they did not meet applicable requirements, causing the government to pay claims on those loans that should never have been insured. The loans were insured by the US Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA). This settlement in principle finalizes the repercussions of the bank’s involvement in the housing crisis.
A settlement of $7.5 million has been reached between Orbit Medical, Inc., Rehab Medical, Inc. and the US Department of Justice, concluding a five-year lawsuit. This lawsuit was brought under the qui tam provisions of the False Claims Act. Two former employees of Orbit Medical, Dustin Clyde and Tyler Jackson, will receive 20% of the settlement as False Claims Act whistleblowers.