Upon returning from holiday recess, the 111^th Congress of the United States introduced bill H.R. 4444, better known as the Defund the Crooks Act, in early January 2010. First introduced by Congressman Alan Grayson (D-FL), the Defund the Crooks Act prohibits the Federal Government from awarding Federal funds, contracts, or grants to covered organizations. The Act also prohibits the Federal Government from promoting certain organizations or from entering into other agreements with these organizations.

Based in part on the Defund ACORN Act of 2009, Congressman Grayson’s bill effectively broadens the scope of regulation while not basing the regulation on the acts of one organization. The purpose of the bill is essentially to ensure that Federal funds – taxpayer dollars – do not end up in the hands of organizations that fail to meet certain requirements.

According to the bill, “covered organizations” refers to several of the following examples:

• Any organization previously convicted of a Federal or State law violation
• Any organization that failed to comply with Federal or State laws leading to its corporate charter being revoked
• Any organization that has filed, transmitted, or submitted a fraudulent claim to any Federal or State agency
• Any organization that knowingly employs, contracts, or relegates authority to any individual who has been convicted of a Federal or State law violation

The Defund the Crooks Act states that no Federal funds, regardless of form, may be provided to organizations that do not meet the aforementioned requirements set out in the bill. It is important to note that the Act does not apply to organizations that received Federal funds prior to the enactment of the bill. However, if organizations that are now deemed unfit to receive Federal funds, grants, endorsements, etc. have a contract extending past the date of the bill’s enactment, they will be terminated.

Click on the following link to view the proposed bill H.R. 4444  introduced to Congress.

Click on the following to learn more on Congressman Grayson and the Defund the Crooks Act (H.R. 4444).

The healthcare corporation provides medications to patients in group homes and long-term care facilities throughout Tennessee. It was alleged that between 2003 through 2006, Kindred overbilled for a higher number of drugs than were actually administered. There were instances where the overbilling occured multiple times the proper amount. 

Thanks to the valiant efforts of a former billing clerk employee of Kindred, this qui tam lawsuit was filed on behalf of the the United States and Tennessee under the qui tam provisions of the Tennessee Medicaid False Claims Act and the federal False Claims Act.. The whistleblower/ relator in this case will be rewarded over $200,000 for her role in filing the complaint and assisting with the investigation.

As mentioned previously on the Whistleblower Law Blog:

In a qui tam suit,  the whistleblower also known as a "relator" may be entitled to
15-30% of the government's total recovery, which includes damages for the false bills, tripled, plus civil penalties of from $5,000 to $10,000 per false claim. However, it is important to mention, that the relator/whistleblower must have complied with the statutory requirements to be eligible for the whistleblower reward.

To learn more on the Kindred settlement, read the DOJ release reqarding the qui tam settlement for Kindred Health.

To learn more on qui tam and the federal false claims act, visit our qui tam section on the LaBovick website.

According to the U.S. Department of Justice, the case was initially filed in 2003, by Whistleblower and licensed pharmacist Bernard Listiza. The Whistleblower should receive approximately $5 million of the total $35 Million qui tam settlement and the federal government will receive approximately $18.6 million of the settlement. The remaining $16.4 million will be shared by over 40 states and Puerto Rico, due to separate settlement agreements.

A breakdown of the shares of the Walgreen's settlement by state includes: Florida receives $9.8 million, Illinois, $1.25 million, Georgia $401,000, Indiana $289,000, Ohio $161,000, New Jersey $1.25 million and Pennsylvania $9,000.

Click here to read more on this Whistleblower Medicaid fraud case from the Chicago Tribune.

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 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.

Qui Tam whistleblower provisions also help fight Medicaid fraud, as Brian F. LaBovick, Esq. explains in his article on "How Qui Tam helps fight Medicaid fraud" that was published by Thomson West Health Care Fraud Litigation Reporter.

States that have “State False Claims” statutes include: New Jersey, Florida, Georgia, California, Delaware, Hawaii, Illinois, Indiana, Louisiana, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Mexico, New York, Oklahoma, Tennessee, Texas, Virginia and the District of Columbia. As mentioned in a previous post on the Whistleblower Law Blog last year, we included State False Claims Acts for our readers. Another resourceful consumer advocate website is Tax Payers Against Fraud.

A few states that have made proposals to enact a State False Claims Act, include: North Carolina, South Carolina, North Dakota, Minnesota, Colorado, Connecticut, Iowa, Kansas, Minnesota, Mississippi, Missouri, and Pennsylvania.

A few states that have made proposals to enact a State False Claims Act, include: North Carolina, South Carolina, North Dakota, Minnesota, Colorado, Connecticut, Iowa, Kansas, Minnesota, Mississippi, Missouri, and Pennsylvania.

The Toll Authorities identified the improper use of the transponders by using video cameras to match transponder signals to pictures of cars going through the Fast Lane toll booths, according to court documents. The complaint was based on the state’s False Claims Act that allows the state to collect damages from those who knowingly underpay for state services. Massachusetts is among 21 states that have passed a State False Claims Act that is similar to the Federal False Claims Act. The states that have passed a State False Claims Act Statute include: California, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Louisiana, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Mexico, New York, Oklahoma, Tennessee, Texas, Virginia, New Jersey and the District of Columbia.

Click here to read more about the Limo company's qui tam settlement from telegram.com
Click here to read more about the 21 states with a state False Claims act for qui tam related cases from Tafnet.org

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.

Amidst all the drama surrounding Wellcare, the stock recently had a surge in trading, according to a recent article by  Wall Street Journal reporter, Nick Timiraos.  After Wellcare acknowledged details about the whistleblower's termination, the investors seem to have settled down, stocks increased 39% to $38 and traded over 10 million shares. The shareholders must be breathing a sigh of relief. Wellcare announced that revenues increased 41% third quarter, compared to prior year's figures.  This is positive news for the investors.

All eyes are on the Florida Based Wellcare.  Will the whistleblower share in the government's reward, if this case is settled or goes to trial? Will the government recoup the alleged $35 million plus treble damages, if the company is found guilty of a quitam or false claims act violation?

Time will tell... Stay tuned...

The Court overturned most of a 5th District Court of Appeal opinion that held Medicaid fraud provisions unconstitutional and removed a criminal case against two Miami dentists and their colleagues.

The new Florida Supreme Court ruling allows the state to proceed with a criminal case against the defendants and others like them. Since South Florida is a magnet for Medicaid Fraud, congratulations to law makers for writing tougher laws and Florida Attorney General, Bill McCollum's  office for prosecuting fraud cases to the fullest extent. This will help prevent Medicaid fraud Scammers from targeting our state.   I can only  hope that the new Florida False Claims Act and this Supreme Court decision in State of Florida v. John Anthony Rubio are only the first of many good things to come in fighting the war on fraud in Florida.

Click Here to read more about the recent Supreme Court decision State of Florida v. John Anthony Rubio, et al. in an article from the Daily Business Review. 

The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick, P.A. is a Plaintiff's firm that represents whistleblowers in Florida and throughout the nation in qui tam (False Claims Act) litigation.

If Fernando and Ileana Fonts are prosecuted for Florida False Claims Act (qui tam) violations, they could be face substantial penalties. According to the new Florida False Claims Act violators face civil penalties for making false or fraudulent claims, written or electronically, to the government for the purpose of getting a false or fraudulent claim paid. The penalties can be up to $11,000 per claim and triple the amount of damages the government agency sustains. The new Florida False Claims Act was approved and signed into law in June 2007 by Governor Charlie Crist.

Click Here to read more from the Attorney General's Office on this case.

The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick, P.A. is a Plaintiff's firm that represents whistleblowers in Florida and throughout the nation in qui tam (False Claims Act) litigation.

Highlights from the new Florida False Claims ACT - S2312:   The Florida False Claims Act  is to prevent the state from paying false & fraudulent claims; redefines term "claim" to include claims filed electronically; provides that person is liable for civil penalty if he or she files false or fraudulent claim; reduces time limits for false claim proceedings; revises period in which stay to conduct discovery may be granted, etc. Amends 68.081-.085,.089.

Click Here to Read the new Florida False Claims Act.

The Whistleblower Law Blog is presented as a service of the Private Law Firm, LaBovick & LaBovick, P.A., Civil Justice Prosecutors. LaBovick & LaBovick, P.A. is a Plaintiff's firm that represents whistleblowers in Florida and throughout the nation in qui tam (False Claims Act) litigation.

The new law that Georgia enacted today is aimed at protecting Georgia's Medicaid funds by creating penalties for each false claim submitted for payment by the Georgia Medicaid Program. Citizens who report fraud and have the necessary evidence can collect up to 25% of the recovery money. This is a great pay out for being responsible and civic minded.

Currently there are over 15 states that have State Fraud Claims on their books to protect their state's tax dollars used in state programs. They will all graciously take advantage of the additional monies granted by Congress (10% of Medicaid fraud recoveries) to states that pass laws with similar provisions that are as effective as the federal False Claims Act.

Another milestone has been reached and the fight against fraud continues. Congratulations to everyone in Georgia and other states around the country for taking a stand on fraud against the government.

Click Here to read a copy of the the new State False Medicaid Claims Act in Georgia.

Many states are creating State False Claims Acts in response to the incentives Congress adopted in the Deficit Reduction Act. New York recently approved a State False Claims Act.

Representative Edward Lindsey and Senator Seth Harp  sponsored this Bill.

Click Here to read the Georgia Whistleblower Bill.