It is also important to note that the  Whistleblower, Cleveland Tyson, will receive $56 million, a 25% share of the $225 million qui tam settlement.

According to published reports, AMERIGROUP Illinois voluntarily ended its contract with Illinois in 2006 and no longer operates in that State. The Company states that they have also has expanded internal corporate compliance program significantly to fully ensure compliance with state and federal regulations in its health plans. After paying  $234 Million and their own legal fees, which are not cheap, I would think they would learn from this very expensive lesson.

As a law firm that is deeply committed to helping end the health care crisis in our Country. We are  are actively involved in community outreach efforts to parents without health insurance for their kids. We recently sponsored a Back to School Fair and helped parents get signed up for the Florida KidCare health insurance program. We had hundreds of parents and children show up for free school supplies and to learn more about the Florida KidCare health insurance for their kids. In Florida, if you know of a child that does not have health insurance for their children, have them call 1-888-540-KIDS or log onto www.Floridakidcare.org 

Click here to read more on this $225 qui tam  Amerigroup settlement from the Wallstreet Journal
 

This is a part of  the Consumer Product Safety Commission Reform Act (H.R. 4040 and S.2663).

The Whistleblower Center President Stephen Kohn, issued the following statement on behalf of the NWC: "This law is a major victory. Today, despite attacks from big business, the interests of American families have prevailed. Finally, employees in the manufacturing industry have the vital whistleblower protections necessary to report hazardous products."

Click here to read H.R. 4040.

This post led me to the post by David Lat, from Above the Law, blogging about the Lawsuit of the Day: A Class Action for DOJ Honors Rejects? How did I miss this riveting story? At the forefront of this case is Belgium resident, and U.S. citizen, Sean Gerlich, charging that he and other highly qualified graduates of were not hired in the Justice Department's Honors Program, because of an "ideological bias against applicants with presumed "liberal" tendencies." I liked the following sentence from David about this case  "Please compensate us for being forced to take lucrative law-firm jobs that pay several times the pittance offered by the feds." I am sure that there are many sides to this case and that more information will be uncovered as this case unfolds. 

According to the Courthouse News Service, a central character in this case is  former Deputy Associate Attorney General Esther S. McDonald. Allegedly, the former Deputy AG created and maintained a printout of applicants political or ideological views and attached them to the candidate's application.   In the wake of Social networking sites such as Myspace, Facebook, LinkedIn, and so many others, it is pretty easy to find out about a job candidate's "true: personality" instead of the one that submits the perfect resume, answers all the right questions, and  looks the part at the interview. The Internet, gives employers a way to look past the "picture perfect interviewee" and really get to know the person, by reading things about them and things by them shared in public places. Word of caution: Nothing is private on the Internet. If you say it, write it, and post it on the Internet, it can be out there in perpetuity. This another topic all together.

Pedro Ruz Gutierrez, from ALM's BLT: The Blog of Legal Times, (Note: awesome name), shared thoughts from the Plaintiff's Attorney in his post "Ex-Honors Program Applicant Sues DOJ". He quotes Daniel Metcalfe, Steve Gerlich's Attorney as saying "This is a guy who had every reason to believe that he was going to work for the government like he did the previous summer, that he would start his career there" Later on he goes on to quote Mr. Metcalfe saying that his client was n “disgracefully deprived of the opportunity to do what he had planned to do, [which was] to return to the Justice Department as an attorney and serve his country.” Are there any guarantees in life? After reading the Complaint, it made me ask this question... I do look forward to seeing how this turns out. The DOJ is an important and central figure in the prosecution of qui tam cases. I hope that this lawsuit or attention surrounding this case, does not distract their attention from such handling pressing matters such as fighting corruption, government fraud and other legal issues.

If you get chance, read the 24 page PDF of the Complaint, Gerlich v. US Department of Justice, from the Courthouse News Service. Click on the following link to David Lat's Above the Law, Blog Post. Thanks for sharing this information. It really helps put this case into perspective.

Let's look at the time-line today, as of right now, there are over 20 blogs that have written a post about this very newsworthy story for their readers and over 150 comments on the Washington Post.com website. Given this short amount of time, for such a niche subject matter, this is amazing.  I enjoy reading blog posts and viewpoints on qui tam issues, and writing is very subjective. However, I feel the best blog posts are when a blogger, shares personal views and makes a statement about something. This is what makes a reader come back for more to a blog.

Here are a few posts that I enjoyed reading today:  I started out on this quest, reading a post from Jesselyn Radack of the Daily KOS. Jesselyn shares that she has first hand experience with these cases. Prior to joining the Government Accountability Project, she handled Iraq reconstruction fraud cases. Jesselyn also shares that it is not uncommon for the Justice Department to seek extensions of the seal on a qui tam whistleblower suit for 6 or 12 months while it investigates the case. The most puzzling question is why are Iraq reconstruction fraud suits, taking several  years,  yet remain entirely under wraps? 

Jeffrey M. Hirsch of the The Workplace Prof Blog, did a fine detailed synopsis of the article in the blog post "Qui tam delays". I  agree with Jeffrey's assertion that "with the recent Supreme Court qui tam decision, this relatively hidden area of the law may be getting some of the attention that it deserves". I always enjoy reading this blog.

I was intrigued by the blog post from the Wordpress blog, Slabbed entitled " Good Job Brownie: The Washington Post Reports on Qui Tam Backlog in DC" They pose the question "Is it any wonder everyday people feel the concept of justice only applies to the wealthy and big business."  Great title....


Robby Moeller of the Voice in the Wilderness shared his thoughts in the post "Fraud and Uncle Sam". He adds that businesses defrauding the government is nothing new. Further, fe feels that fraud follows wherever government contracts or funds are being given out. I would love to hear a response from someone in the Federal Government to this statement.

The company was accused of overcharging Medicare for Medical scans and billing the federal government for some tests that were not medically necessary. There were also allegations that that the Florida company paid doctors under the table for sending them imaging patients for tests that could cost as much as $2,500 apiece.

Why is it that when an employee reports questionable government billing practices to management, in this case Medicare bills, the company  takes the defensive and fires the employee.

In the case of the Florida Diagnostic Imaging Centers, David Clayman, M.D, a former radiologist for the imaging centers, was fired after questioning the Medicare billing practices. According to a recent DOJ release, Dr. Clayman will receive $1.75 million as his share of the $7 Million recovery.

According to the American College of Radiology, a doctors' association, in a Sun Sentinel article, the cost for Medicare and insurers is about $16 billion a year for unnecessary imaging tests ordered by doctors who made money from them. These tests not only cost the government and taxpayers, but also expose patients to radiation and and raise medical costs.

One of our favorite crusaders in the Medicare fraud fight, R. Alexander Acosta, U.S. Attorney for the Southern District of Florida, stated that  “We will aggressively prosecute any physicians, including board-certified specialists, who abuse and steal from the Medicare system to line their own pockets.”  Attorney Brian F. LaBovick mentions in an article on health care fraud for a  Thomson West Litigation Reporter, that "We must continue to prosecute fraud on all levels. New amendments are needed to continue to foster the cottage industry of civil attorneys assisting U.S. attorneys' offices around the country with their qui tam investigations. Each state must enact its own qui tam statutes (there are now 22 states with qui tam laws). This will give states the ability to potentially capture additional funds for Medicare fraud prosecution at a local level, pursuant to the Deficit reduction Act of 2005."

The Florida qui tam case discussed in this post is: U.S. ex rel. David Clayman v. University MRI and Fred Steinberg, M.D. et al. Civil Action No. 02-81143 (S.D. Fla.). 

 

Since, the civil False Claims Act is a growing area of federal litigation, particularly because of its unique qui tam enforcement, the conference will have experts from all areas – healthcare, defense, pharmaceutical, oil and gas, accounting and consulting, construction, higher education and grant recipients – in which qui tam lawsuits under the FCA have been filed.

Click here for the ABA Brochure on the Qui tam and False Claims Act Conference.

Mr. Olinsky reference to whistleblowers as "bounty hunters" is interesting, when he writes "New Jersey's new statute follows the federal version, and will invite suits by a new group of bounty-hunters - those involved with companies that do business with the State or "any contractor, grantee or other recipient of State funds."

At the end of the article,  Mr.Olinsky provides a useful corporate tip  when he writes "companies that do not already have in place a comprehensive compliance program - including training, anonymous reporting, and self-auditing - should make the implementation of such a program a top priority". The fines for a company found defrauding the government, can be expensive.  As he points out, "The New Jersey False Claims Act  provides for treble damages and civil penalties of at least $5,000 to $10,000 per false claim."  Several other states already have this penalty in force.

Whistleblowers or "bounty hunters" as Mr. Olinsky calls them, are out there ready and willing to report a company for defrauding the government. They get to share in the government's recovery, anywhere from 15% - 30%, depending upon the government's intervention in the case. However, despite the money, most whistleblowers would prefer for the company to stop the wrong doing and acknowledge them for reporting the fraud to management. In several instances, the whistleblower loses their job, friends and life as they know it, because the large corporations vilify the whistleblower. Just ask two of the most well known whistleblowers, Dr. Peter Rost formerly of Pfizer or Cynthia Cooper formerly of Worldcom. They told what they believed was the truth about their organizations and their worlds changed dramatically. Although both have written books and are household names  if you asked them, why they came forward, I am sure they will say "it was  to tell the truth". We believe that whistleblowers are brave individuals that give up a lot to share the truth.  A large corporation can pay defense firms millions of dollars to fight a qui tam claim and end up settling without admitting any wrongdoing. They can finance a well paid PR campaign to help with their public image, give millions to a worthy cause and life goes on as usual.  At the end of the day, who stands to lose the most for coming forward? the brave whistleblower. 

Click here and check out the article on the New Jersey False Claims Act by Mr, Mark Olinsky and make your own conclusion.

The CPSC reform bill (S.2045) needs to provide vital protections for honest employees who report safety violations--such as toxins in toothpaste and poisonous lead in our children's toys. Without these protections, whistleblowers may not come forward to report dangers of products until it is too late. 

Lobbyists, such as the National Association of Manufacturers, have declared war on the whistleblower provisions of the bill.  The House version of the CPSC reform bill does not include whistleblower protections.

Clickhere to find out how you can take action and join the Whistleblower Center in this valiant fight. to encourage Representatives to support families and not large businesses in this legislation. There have easy to use templates at this site for sending messages to Representatives. 

The Louisiana Legislator's "Extraordinary Session" started February 10, 2008 and is expected to end by  March 1, 2008.  The Session has Seven key priorities, one of which is to combat fraud and abuse. The goals included are: NO. 1 - Financial Disclosure, NO. 2 - Conflicts of Interest, NO. 3 - Transparency for Lobbyists, ITEM NO. 4 - Improving Ethics Education and Enforcement, ITEM NO. 5 - Transparency and Public Access to Information, ITEM NO. 6 - Further Combating Fraud and Abuse, and ITEM NO. 7 - Improve Campaign Finance Laws

Item NO. 6 language includes the following:

To legislate relative to other public officers and private citizens participating in the prevention of fraud and abuse by:
(1) enabling the Office of Inspector General by statute;
(2) granting authority to local inspector generals and ethical governing bodies to issue and enforce subpoenas in state court and providing for confidentiality during investigations by such;
(3) expanding whistleblower protection to prohibit threats of reprisal to public servants; and
(4) authorizing qui tam incentives and standing to citizens to pursue public fraud cases when the state refuses to act.

The legislature intends the attorney general and private citizens of Louisiana to be agents of this state with the ability, authority, and resources to pursue civil monetary penalties or other remedies to protect the fiscal and programmatic integrity of the state from persons who engage in fraud,  misrepresentation, abuse, or other ill practices, as set forth in this Chapter, and to obtain funds, property, or other compensation to which these persons are not entitled.

HB 69 gives the following introduction into the purpose of the Bill:

This part may be cited as the "State Government Integrity Act". §1192. Legislative intent and purpose.  The legislature intends that the attorney general, the inspector general, and  private citizens of Louisiana shall be agents of this state with the ability, authority, and resources to pursue civil monetary penalties or other remedies to protect the fiscal and programmatic integrity of state government in Louisiana from persons who engage in fraud, misrepresentation, abuse, or other ill practices, as set forth in this Part, and who obtain funds, property, or other compensation to which these persons are not entitled.

The New Jersey False Claims Act, Bill S232, allows residents in New Jersey to bring an action, against anyone, who intentionally causes the State to pay a false claim. If a person is found guilty in court, the bill would create civil penalties, between $5,000 and $10,000, for each verified count of a false claim, as well as imposing up to three-times the cost of any losses the public entity would have sustained because of the false claim.

The bill also sets up a whistleblower incentive to come forward with any information about false claims. If a false claim is proven in court, the whistleblower would be entitled to 15% to 25% of the proceeds recovered for New Jersey if the Attorney General brings the case, and 25% to 30% of the proceeds if the case is brought by the whistleblower. The exact amount of whistleblower compensation is determined by the courts.

I could not agree more with Senator Adler's statement of  "This bill will be another weapon in the arsenal of good government.”  It would be great if all states had a State False Claims Act that mirrored the Federal False Claims Act. It would send a strong message to individuals and corporations to think twice before defrauding the government. It would also encourage more individuals to come forward and report fraud against the government.

The Bill now heads to the Assembly before going to the desk of Governor Jon Corzine for signature of the Bill to be signed into Law. 

Click here to read the News Release from the New Jersey Senate Democrats.
Click here to read more from Jason Butkowski and PolitikerNJ.com.
Click here for a copy of the New Jersey False Claims Act.

It can be difficult for a whistleblower to press forward with a qui tam claim, they often lose their jobs, face retaliation, lose family and friends and often are forced to give up something they truly love. ). The Pharmafraud Blogger discusses challenges whistleblowers can face while trying to do what is right, in the recent post  Big Pharma Retaliation, Just More of the Same, "If you think Dr. Polansky, or I, or any other "whistleblower" was motivated by money to file a qui tam, then you are sorely mistaken. Every one of us simply tried to do what was right".  However, I must add that whistleblowers, if successful, can receive up to 30 percent of the proceeds of what the government recovers. As we mentioned in a prior Whistleblower Law Blog post, In 2007, whistleblowers were awarded $177 million for their efforts in bringing corporations to justice, most of  which came from Health Care fraud.

Another well known whistleblower and one of the most prominent in the health care segment is Dr. Peter Rost.  He knows first hand how difficult it can be to bring a claim against a large pharma giant, such as Pfizer. Dr. Rost, former VP of Marketing for Pfizer, is an outspoken pharma whistleblower that went on to become an activist on the subject. He has authored several books including: KILLER DRUG and THE WHISTLEBLOWER, Confessions of a Healthcare Hitman and maintains a blog known as Question Authority.

Is Pfizer off the hook? Can they breathe a sigh of relief? Are they in the clear with Lipitor, since the government chose not intervene in the qui tam claim? David Armstrong provides a nice answer to this in the Wall Street Journal article, "Pfizer Is Sued Over Lipitor Marketing"., when he writes "The government hasn't intervened in other cases which led to huge fines against drug companies. One example is another case involving Pfizer, this one for the off-label marketing of Neurontin." Only time will how the claim against Pfizer for questionable marketing for the billion dollar drug will turn out. May the truth prevail in this uphill battle.

According to Pfizer company issued statements, they are the world's largest research-based biomedical and pharmaceutical company. In 2006, they earned $48.4 billion in revenues and invested $7.6 billion in research and development. In a Pfizer fact sheet, the company writes, "Every day, approximately 87,000 colleagues in more than 150 countries work to discover, develop, manufacture and deliver quality, safe and effective prescription medicines to patients." One can only hope they are not doing this at the sacrifice of lives in the process.

Pfizer stock most recently closed at $22.90 on the NYSE.

Click here to read more on this this from the WallStreet Journal online.

Nearly three years later, in February 2006, this whistleblower, contacted the U.S. Department of Homeland Security's inspector general. The IG sent auditors to speak with him. Unfortunately, after several months, he felt that the investigation was going nowhere, and felt that he should matters in his own hands and decided to do something revolutionary. He took his case to You Tube, for the world to hear and see if they agreed, that the Deepwater project should be looked into for safety reasons.

His revolutionary idea worked and his idea was picked up by several media outlets. A detailed report was eventually released by the Inspector General's Office.  The 10 minute You Video made an impact. The Coast Guard reorganized the program and took oversight of project management of the deepwater program in house, instead of having the contractors perform this oversight.

It is not known how much this whistleblower's quitam or false claims act case could be worth, if anything at all. Time will tell... One thing that is important to note, is that whistleblowers are taking things to the next level when reporting quitam False Claims Act cases. 

Click Here to read the article "How Qui tam helps fight Medicaid Fraud".

The settlement resolves allegations that Physiotherapy,  submitted claims for services to Medicare, state Medicaid programs, and the Department of Defense's TRICARE program that were falsely billed as one-on-one services and that Physiotherapy improperly retained excess or duplicate payments it received from federal health care programs. Under the terms of the settlement, Physiotherapy agreed also to enter into a corporate integrity agreement with the Office of Inspector General for the Department of Health and Human Services.

Stryker Corp stock closed at $70.78 yesterday, with shares being down $.09 or .13% from previously trading.

To read more about this settlement from the Department of Justice, Click here.

Where I tend to disagree with Mr. O'Rourke, is with his statement of "the False Claims Act is quickly becoming the Federal Government’s drink of choice".  He seems to be taking a jab at the False Claims Act. The False Claims Act has delivered over $2 billion in 2007 Quitam cases. Read more about this in a previous post on Whistleblower Law Blog.

What are your thoughts on Compliance departments and heath care organizations?  Do you believe they have a place in ensuring drug safety at pharma companies?

Click here to read more from the Associated Press Article.

Allegedly, Direct Nursing Assistance, Inc. submitted claims to Medicare for $1 million. Aenlle had prescription pads printed, and forged the names and signatures of physicians. For his part in this Medicare scheme, Aenlle faces a maximum of 40 years in prison. His sentencing is scheduled for Dec. 13, 2007. 

U.S. District Judge Donald Middlebrooks presided over the case and the case was prosecuted by Deputy Chief Kirk Ogrosky from the Fraud Section of the Criminal Division and Assistant U.S. Attorney Ryan K. Stumphauzer of the Southern District of Florida.

Click here to read more from the Department of Justice.

This was a collaboration of seven qui tam actions brought under the False Claims Act. Those actions include the following cases:  United States ex rel. Richardson v. Bristol Myers Squibb, Civil Action No. 06-11821-NG (D. Mass.); United States ex rel. Piacentile v. Bristol-Myers Squibb Co., Civil Action No. 05-10196-MLW (D. Mass.); United States ex rel. Forden v. Bristol-Myers Squibb Co., Civil Action No. 04-11216 -RGS (D. Mass.); United States ex rel. Cokus v. Bristol Myers Squibb, Civil Action No. 01-11627-RGS (D. Mass.); United States ex rel. Barlow v. Bristol-Myers Squibb, Civil Action No. 04-11540-MLW (D. Mass.); United States ex rel. Ven-A-Care of the Florida Keys, et al. v. Apothecon, et al., Civil Action No. 00-10698-MEL (D. Mass.); and United States ex rel. Ven-A-Care of the Florida Keys, Inc. v. Bristol Myers Squibb Co., Civil Action No. 95-1354 (S.D. Fla.).

The settlement was by no means the effort of one person, but the joint efforts of several offices and individuals including: the Boston offices of the Office of Inspector General for the Department of Health and Human Services, the Federal Bureau of Investigation, and the Food and Drug Administration's Office of Criminal Investigations, along with Department of Justice Trial Attorney Andy Mao of the Fraud Section of the Civil Division, District of Massachusetts Assistant U.S. Attorneys Gregg Shapiro and Susan Poswistilo, and Southern District of Florida Assistant U.S. Attorney Mark Lavine.

The National Association of Medicaid Fraud Control Units participated in the negotiation of the settlement, and the Corporate Integrity Agreement was negotiated by Mary Riordan of the Office of Inspector General at the Department of Health and Human Services.

Cheers to everyone involved in making this huge settlement possible. And not to forget the brave whistleblowers who risked a lot to come forward.  They will share $50 million of the settlement for their bravery and participation. A relator can receive anywhere from 15 percent to 30 percent in a successful qui tam claim depending upon the government's involvement.

Click here to read more about this Bristol Myers Squibb Settlement from the DOJ and Bristol Myers Squibb.

A few key expert witnesses that are scheduled to attend the hearing include: Bunnatine Greenhouse, Stephen M. Kohn, Barry Godfrey, Donald Vance, Robert Isakson, and Alan Grayson.

It is important for this hearing be televised on CSPAN. To help push CSPAN to make the right decision please call or write to CSPAN to let them know you want to watch the hearing. Information for contacting CSPAN is below. Even an email will help.

Main Phone: 202-737-3220
Main Fax: 202-737-6226
Email: events@c-span.org OR viewer@c-span.org

Also, thanks to Marshall D. Chriswell the Public Affairs Director for the National Whistleblower Center for his email blast and mailer on this topic.

Thanks to you all for taking the time to care.

Brian

As a quick history: the IRS has had a whistleblower program in place for many years.  It is a relatively unknown, unused, and unloved program.  It gave huge discretion of the IRS on who qualified as a relator and how much, if anything, a relator would be paid for their information.  In 1998 at the height of IRS abuse allegation, the Senate started examining the program.  Senator Harry Reid then named the unknown program "Rewards for Rats". 

Isn't it interesting how time and a revised frame can color the lens of what is happening.  In 1998 the frame was overly aggressive IRS.  People believed the IRS auditor and investigators were unjustifiably harassing the poor citizen/public for minor tax inconsistencies.  This led to some internal reforms at the IRS for better public relations. 

However, time changes the lens.  By 2005 people realized major corporations were creating illegal schemes to avoid paying taxes.  New efforts were placed into reviving the unknown whistleblower program  for the IRS.  The effort was led by the well-loved patron saint of whistleblowers and strong anti-fraud Republican Senator Charles (Chuck) Grassley.  Senator Grassley felt that a whistleblower was a patriot infused with the courage to risk losing their jobs by "exposing fraud, waste and abuse in an effort to protect not only the health and safety of the American people but the federal treasury and the taxpayer dollars." (Senator Grassley's floor statement at National Whistleblower Week 2007).  Now that is a far cry from Senator Reid's "Rate" analogy.

With words like that, who could resist passing a new program (created in 2006) to encourage the patriotic act of blowing the whistle on tax cheats?  Well, they didn't want to prosecute just your basic low value tax cheat.  The IRS wants to go after high value tax cheats.  Therefore, they put some parameters on the new program that would keep low value claims at a minimum.  The threshold is that the tax fraud must add up to more then $2,000,000.00 and the net earnings of the tax cheat must be in excess of $200,000 in the year the fraud occurred.  This threshold will hopefully keep nutty neighbors from reporting other nutty neighbors just to be vindictive of some dog droppings on the one neighbor's lawn.

As it turns out, the IRS is already prosecuting these claims.  The program rolled out and the regs were supposed to be done by the end of August, which didn't happen.  Mr. Whitlock assured the TAF conference attendees that he and his team were working on them.  However, until that time, he and three other national processors are reviewing the claims and dolling out the work to IRS field agents.  In fact, they have already paid some pretty big claims out to relators in the past year.

After his seminar speech I found myself with a new respect for the IRS and their agents.  I found that if the agency is as sincere and bright as Mr. Whitlock, that this program is going to work well. 

Actually trusting the IRS.  Now that is Stranger than Fiction.

Brian