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).

Allegedly, Omnicare accepted financial kickbacks in return for the company’s purchase and recommendation of Johnson & Johnson and its subsidiaries’ pharmaceutical products to nursing home patients.  Doctors accepted the recommendations of Omnicare’s pharmacists more than 80 percent of the time, and allegedly Johnson & Johnson viewed Omnicare pharmacists as “an extension of its sales force.”

Kickbacks were delivered in several ways, including:

1)      Offering Omnicare rebates when programs to increase the sale of Johnson & Johnson’s prescription drugs to nursing home patients were implemented.

2)      Paying Omnicare millions of dollars for “data”; the complaint alleges that these payments were false and used only to coerce the recommendation of Johnson & Johnson drugs from Omnicare pharmacists.

3)      Johnson & Johnson also made multiple “educational funding” and “grant” payments to Omnicare, with intent only to receive a recommendation from its pharmacists.

Assistant Attorney General for the Civil Division of the Department of Justice had this to say about the situation,

"We will pursue those who break the law to take advantage of the elderly and the poor. He went on to say that, “Kickbacks such as those alleged here distort the judgments of health care professionals and put profits ahead of sound medical treatment." 

FORBA Holdings LLC, a dental management company, settled a qui tam claim for allegedly performing medically unnecessary dental services on children. FORBA  Holdings LLC provides administrative services to  "Small Smiles Center, a nationwide operation of 69 dental centers. The settlement calls for FORBA to pay $24 million, plus interest to the United States and participating states, for suspected medically unnecessary dental services for children on Medicaid insurance. In addition, FORBA will implement several new remedial measures, designed to prevent this type of conduct in the future.

Three whistleblowers are credited for the government’s investigation into these allegations. The whistleblowers filed lawsuits under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in any recovery. The whistleblowers will receive payments over $2.4 million from the federal share of the settlement.

According to the Department of Justice, FORBA allegedly falsely submitted claims for dental services performed on low-income children. Many of these services performed did not meet professionally recognized standards of care or were not medically necessary.  Tony West, “Assistant Attorney General for the Civil Division of the Department of Justice stated the following:

 "We have zero tolerance for those who break the law to exploit needy children. Illegal conduct like this endangers a child’s well-being, distorts the judgments of health care professionals, and puts corporate profits ahead of patient safety."

To resolve the allegations against it, FORBA will pay $24 million, plus interest. The federal share of the civil settlement is $14,285,645, and the Medicaid share for 21 states is $9,714,355.25.  This settlement sends a clear message that the government will not tolerate fraud. U.S. Attorney for the Western District of Virgini,  Timothy J. Heaphy, is correct in the following statement:

"FORBA put greed and profits before the well-being of children. It endangered the health and safety of innocent children and defrauded the taxpayer of millions of dollars.  Today’s settlement addresses these egregious acts and sends a clear message that Medicaid fraud will be expeditiously addressed by this Department."

The False Claims Act is a powerful tool that has helped the government recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs and over $3 billion in False Claims Act total cases overall.

(a) Responsibilities of the Attorney General. - The Attorney General diligently shall investigate a violation under section 3729. If the Attorney General finds that a person has violated or is violating section 3729, the Attorney General may bring a civil action under this section against the person.

whistleblower.labovick.com/31 USC3730_PDF.pdf

 whistleblower.labovick.com/31 USC 3729_PDF.pdf

Under the qui tam provision of the False Claims Act, the relator (plaintiff) files an action on behalf of the U.S. Government. The Act allows a wide variety of people and entities to file a qui tam action, common types include: employees, former employees, state and local governments, federal employees, public interest groups, corporations and private organizations

There is a provision in the Act that provides for "public disclosure" if the whistleblower can meet the "orginal source" test. The whistleblower must prove they had direct and independent knowledge of the allegation prior to filing the action.

In Qui Tam litigation a private citizen (the whistleblower) who knows of fraud committed against the government may, through his own privately retained lawyers, file a lawsuit to recover the losses caused by the government fraud. The False Claims Act provides huge financial incentives to citizen whistleblowers to retain attorneys and come forward, prosecute these lawsuits and fight government fraud.

An estimated 10% of the United States annual budget is wasted due to fraud. An experienced Qui Tam Attorney examines any situation in which the government has been cheated to determine whether it is covered under the False Claims Act. The following examples would be covered under the False Claims Act:
· preparing a false record or statement or bill in order to get a false or fraudulent claim paid by the government.
· conspiring with anyone else to have a false or fraudulent claim paid by the government.
· holding property of the government intending to defraud the government or intending to conceal it from the government.
· creating or delivering a false or fraudulent receipt to the government for its property.
· fraudulently buying property of the government from someone who is not authorized to sell that property for the government.
· making a false statement to fraudulently avoid paying a debt to the government or to avoid delivering property to the government.
· causing someone else to submit a false or fraudulent claim.

Congress strengthened the False Claims Act in 1986 to combat fraud committed against the government. Between 1988 and 1995, over a billion dollars was recovered by private Qui Tam lawyers in settlements or verdicts in hundreds of cases (law suits) filed on behalf of the United States government, with whistle blowers who retained their own lawyers to file suit receiving more than $100 million of the recovered funds. Annually, this figure increases almost $1.2 billion was recovered in whistle blower claims and lawsuits filed by private citizens through their own lawyers under the Federal False Claims Act for the fiscal year October 1, 2000 to September 30, 2001. The whistleblowers were awarded more than $210 million for their bravery and willingness to seek justice for the government. In 2005, The Department of Justice estimates, $3.1 billion was collected from businesses defrauding the government.

Do you have a list of the documents, computer files and other proof? Are these documents in a safe place?

Do you have a list of everyone that has knowledge of the matter? Can you locate them?

Do you have names of supervisors and others who would have participated in the false claim?

Do you have a breakdown of the Corporate structure of the company involved in the false claim?
Do you know specific laws, regulations, rules and procedures that were violated by the false claim?

All of the above information is necessary to determine if a false claim or fraud has taken place.