Whistleblower Law Blog : Whistleblower Lawyer & Attorney : LaBovick Law Firm, Florida : Federal False Claims Act, Qui Tam

The year is starting off on the right tone with qui tam settlements for Medicare fraud. The Minnesota case  United States ex rel. Steven Radjenovich v. Stanley Gallagher, et al., Case No.: 04-4538 (D. Minn.) was settled for $846,461 today. 

According to the Department of Justice, Wheaton Community Hospital knowingly made false claims to Medicare for unreasonable and unnecessary hospital admissions. These false claims were made from 1998 to 2004. The hospital billed Medicare for acute patient care that was not medically necessary.

Tony West, Assistant Attorney General for the Justice Department’s Civil Division stated the following:

 "Hospitals and doctors have a responsibility to provide patients with reasonable and necessary care. When they neglect those obligations, patients and taxpayers suffer."

The whistleblower in this case will be awarded $203,150, as his share of the settlement with Wheaton Community Hospital. In a qui tam case, the whistleblower's reward or relator's award can be anywhere from 15% to 30%, depending upon the level of the government's involvement in the case.

If you are a whistleblower and have pertinent information on Medicare, Medicaid fraud or any other false claims act violations from a company, protect your rights and contact a qualified qui tam attorney to discuss how to protect your rights.

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Nelson Valdes, Pharmacy Owner and Durable Medical Equipment owner, was ordered by  U.S. District Judge Cecilia M. Altonaga to pay approximately $3.5 million in connection to Medicare false claims. In July of this year, a federal jury in Miami convicted Mr. Valdes of conspiring to defraud Medicare, taking kickbacks and other related charges. This was the third time, Mr. Valdes has been convicted of Medicare fraud. Hopefully he will learn from his mistakes this time around.

According to the Department of Justice, Mr. Valdes conspired with Med-Pro Billing and Unimed Pharmacy to refer paid patients in exchange for half of what Medicare paid for “compounded” aerosols. Compounding is the the process of a pharmacist making medication as opposed to a pharmaceutical manufacturer.

Mr. Valdes will receive 12 years in prison for Medicare fraud, according to Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida.

This verdict marks another win for our diligent medicare fraud strike force. Since March 2007, the strike force team has indicted approximately 80 cases and 120 defendants in Miami-Dade County alone.  The Medicare fraud strike team deserves a big round of applause.  Their hard work helps the government recoup millions of dollars for qui tam or false claims involving medicare fraud.

Click Here to read more on this case from the Department of Justice.

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The Department of Justice filed papers indicating that the government may want the $7.5 million  dollars the jury said was defrauded from the government by Kerr-McGee.

The DOJ requested that Judge Figa to not enter a judgement of dismissal in the case for 30 days while it takes time to consider whether or not to intervene.

“The Supreme Court has instructed that where a court dismisses a relator because he is not an original source, the court nonetheless retains subject matter jurisdiction if the United States intervenes,” government attorneys argued. “Thus, if the United States intervenes in this case, the court will retain jurisdiction despite its March 30, 2007 order that it lacks jurisdiction over Maxwell’s allegations.”

Attorneys for Maxwell filed papers with the court arguing that the jury’s verdict belongs “to the United States of America.”

Attorney Robert Christensen's blog makes an interesting point, when he states in his blog post "that It should not come to anyone's surprise that our government is oftentimes too close to the industries it is regulating. And that many regulatory agencies are run and staffed not by regulators but industry profiteers. Time will tell, how the course of events will play out in this case Uniter Sates v. Kerr-McGee. Keep watching.....

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There are a million ways to rip off the government. That is why the Qui Tam law’s (Federal False Claims Act) language is so broad. Yesterday I blogged about an HMO getting slapped with a huge verdict and penalty for ripping off Medicaid, last month I was upset by defense contractors posting ghosts instead of, and today I am blogging about a road contracting company which failed to follow the government regulations on hiring disadvantaged business entities.

What happened here is that two construction companies were awarded government contract to perform road work. As a part of the award the construction companies promised to hire disadvantaged business entities (DBEs) to do the work. What are DBEs? DBEs are businesses are owned by minorities, women, or socially or economically disadvantaged people. The purpose here is to get more people to enter the road construction industry.

The two companies were Ajax Paving Industries Inc. and Dan's Excavating Inc. These two companies were supposed to accurately report DBE construction to the Department of Transportation. Obviously they did not take this requirement seriously and failed to report accurately. What these companies did was report that a company called Borbolla Construction did major work on their projects, when in truth, Borbolla did not do more then simple administrative work. The companies now must pay $11.75 million back to the government and enter into a new agreement with the Department of Transportation to comply with the law.

The unfortunate thing in this construction fraud case was that there was no “known” whistleblower. The government stated it found the fraud on its own. This means no one is sharing in the fraud money. I find that hard to believe. What made the government suspicious? I wonder if someone gave the government a heads up on the fraud and did not have an attorney ready to protect their share of the award. Now that person is being locked out. Who knows? The government press release  bragging about the award doesn’t say. We may never know. At least we know the government went after the fraud and the bad guys are paying back a large sum of money, making good on their contract and following the rules in the future.

Click here to read more from the Department of Justice on the Construction Fraud settlement.

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