Articles Posted in Uncategorized

Published on:

The Department of Justice announced a settlement in unique case advancing a uncommon theory of recovery for False Claims Act (“FCA”) lawsuits. CA Inc., (“CA”), agreed to padollar-billy $45 million to resolve allegations brought by a whistleblower under the FCA.

CA’s settlement further cements the government’s commitment to routing out fraud with the help of “whistleblowing” employees. People with information about frauds against the government stand to benefit significantly financially, and may disrupt immoral and dishonest practices. Dani Shemesh, the former employee of CA Software LTD that filed the suit in 2014, will receive $10,195,000 for the information she provided.

Shemesh alleged that CA Software made false representations and claims in the negotiation and performance of a General Services Administration (“GSA”) software and licensing contract.

Published on:

doctor_talking_with_patient-729412-300x290A False Claims Act lawsuit unsealed last year in Southern California U.S. Attorney for the Central District of California announced that her office elected to intervene in a False Claims Act lawsuit alleging rampant Medicare fraud at a group of Southern California hospitals. The suit was first “unsealed” in late 2016.

The whistleblower (or “relator”) in this case, the former Director of Quality and Risk Management at Prime Healthcare Services, Inc., alleges that her employer defrauded the federal government of nearly $50 million dollars by billing for “medically unnecessary” inpatient short-stay admissions.

Prime Health owns and operates 14 hospitals throughout Central and Southern California. The whistleblower alleges that fraudulent billing practices occur across the Prime Health system.

Published on:

Red-Line-300x199A New Hampshire contractor and Haverhill, Massachusetts subcontractors will pay $420,000 after settling allegations of submitting false and inflated payment requests for MBTA renovations. The case indicates that crackdowns on illegal practices in construction for the government are on the rise. S&R Construction, its president Stephen Early, subcontractor A&S Electrical, and its manager Gregory Lane, will be collectively responsible for repaying the Commonwealth.

The False Claims Act, a law that provides protections for “whistleblowers” who come forward with information not previously known to the government about waste or financial fraud on taxpayers, has become the primary statutory remedy for the government to recover ill-gotten funds. In 2016, the government prosecuted healthcare, defense, and contracting frauds through the FCA, collecting $4.7 billion.

Though the FCA has been law since after the American Civil War, and was passed after rampant frauds on the government enraged citizens, its use as changed throughout its existence. Originally, businessmen with lucrative contracts were dubbed “war hogs” by the American press, and the contracts that made them rich amounted to agreements with the union army to supply goods and services that were oftentimes nonexistent or subpar, despite being paid handily.

Published on:

Stethoscope-2-300x199A midwest healthcare provider agreed to resolve False Claims Act allegations brought by two whistleblowers for $18 million dollars.

The plaintiffs in the qui tam case were former employees of the company. Evercare, now known as Optum Palliative and Hospice Care, is a Minnesota-based provider of hospice care in Arizona, Colorado, and other states across the United States.

The False Claims Act (“FCA”) allows the government to recover damages and penalties of three times those damages. The fraudulent government contractor is also hit with an $11,000 penalty per false claim.  Last November, those penalties per claim will raise to nearly $22,000.

Published on:

shire-300x178This month, the Department of Justice (“DOJ”) announced that Shire Pharmaceuticals will pay $350 million to settle False Claims Act (“FCA”) allegations that Shire and the company it acquired in 2011, Advanced BioHealing (“ABH”), used kickbacks and other prohibited sales methods to compel hospitals, Doctors, and their firms to overuse its product “Dermagraft.”

Shire is a pharmaceutical company headquartered in Ireland. Its United States headquarters are located in Lexington, Massachusetts.

The allegations resolved by the settlement were brought in six lawsuits filed under the qui tam whistleblower provisions of the FCA. Those provisions permit private parties to sue on behalf of U.S. and state governments for false claims.

Published on:

detroit-skyl-300x151A Michigan mortgage services company settled a protracted $48 million dollar False Claims Act (“FCA”) lawsuit this week. The U.S. Attorney for the Eastern District of Michigan announced, “the settlement announced today holds United Shore accountable for its endorsement of ineligible loans for FHA mortgage insurance.”

United Shore Financial Services LLC (“USFS”) agreed to pay the U.S. government $48 million to resolve allegations that it violated the FCA by underwriting and originating “bad” mortgage loans that were insured by the U.S. Department of Housing and Urban Development (“HUD”). The loans USFS originated were disproportionality soured by borrowers’ inability to pay, in part, the Government alleged, because of the company’s improper process of approving hundreds of loans that HUD would not normally insure.

The False Claims Act was passed following the American Civil war, after widespread fraud on the Union army frustrated citizens, soldiers, and lawmakers alike. Sometimes dubbed “[President] Lincoln’s Law,” the FCA has become one of the U.S. government’s most effective tools in combating frauds on government-funded programs.

Published on:

Scott-Bridge-Townshend-Vermont-300x201A physician practicing in Townshend, Vermont, paid $76,000 to the U.S. government to resolve allegations that she violated the federal False Claims Act (“FCA”) by submitting “false claims” for reimbursement to Medicare for unnecessary and unapproved “pain management” injection procedures.

The False Claims Act, passed in the aftermath of the American Civil War, and signed into law by President Abraham Lincoln, is a legal vehicle for people with knowledge about fraud on the government to recover money on behalf of the United States and to which they are entitled to a portion. If the case proves successful, the FCA plaintiff, called a “relator” or a “whistleblower,” is generally entitled to 15-30% of the recovered money.

In 2015 alone, the U.S. government recovered over $3.6 billion in either settlements or judgments in cases brought under the False Claims Act.

Published on:

Supreme-Court-PillarsGreene LLP secured another win for its clients in the U.S. Court of Appeals for the First Circuit in the firm’s seminal False Claims Act case, U.S. ex rel. Escobar v. Universal Health Services. The First Circuit’s decision will allow Greene LLP’s clients to continue pursuing fraud claims against the healthcare company, Universal Health Services Inc., the largest provider of mental health services to Medicaid programs across the country. Courts and lawyers across the country were tracking the First Circuit’s most recent Escobar ruling, as the decision could have made bringing False Claims Act cases considerably more onerous for whistleblowers from the outset.

In June, Greene LLP secured a favorable and unanimous decision for its clients in the U.S. Supreme Court. The Escobar decision represents the Supreme Court’s willingness to bolster the variety of viable theories of recovery under the statute. The June decision promises to have lasting consequences for a wide variety of whistleblower suits filed under the False Claims Act.

Greene LLP’s clients were prompted to file an FCA suit under Massachusetts’ qui tam provision by the death of their daughter, Yarushka Rivera, a Massachusetts teenager who died from an epileptic seizure after being treated at a mental health facility run by Universal Health Services (“UHS”). Under Massachusetts Medicaid (“MassHealth”) regulations, health care professionals must meet licensing and minimum qualification requirements to provide services reimbursed by the government.

Published on:

Yellow-and-Red-Pills-150x150A federal judge will decide the fate of a “whistleblower’s” and the United States Postal Service’s (“USPS”) lawsuit against cyclist Lance Armstrong and his now defunct racing company, Tailwind Sports. The False Claims Act (“FCA”) lawsuit, originally filed by Armstrong’s former teammate, Floyd Landis, alleges that Tailwind Sports and Armstrong unlawfully submitted bills to the federal government for sponsorship. Landis alleges that Tailwind athletes and Armstrong, who were sponsored by the USPS from 2001-2004, were involved in an illegal “doping” scheme, which allegedly violated material elements of their contract with the federal government.

The FCA allows the government to recover actual damages and penalties of three times those damages. The fraudulent government contractor is also hit with an $11,000 penalty per false claim. In November, those penalties per claim will raise to nearly $22,000 per claim.

At its core, the statute allows individuals (“whistleblowers”) to file lawsuits with allegations that fraud has been committed against the federal government. Whistleblowers are entitled to share in any recovery received by the government.

Published on:

Loan-Application 2B&H Education, the operator of a chain of beauty and massage schools known as the “Marinello School of Beauty,” which are located in the state of California, paid over $8 million dollars to settle a False Claims Act (“FCA”) lawsuit brought by employees-turned-whistleblowers.

The False Claims Act, originally enacted in 1863 during height of the civil war to combat rampant fraud in government contracting, was amended by Congress in 1986 to enhance the federal government’s ability to recover losses from fraud against the United States.

Violations of the FCA are subject to civil penalties (approximately $20,000) for each false claim plus three times the amount of the loss that the government incurred as a result of the defendant’s actions.