Criminal Federal Lawyer

Miami men charged in $110 Million Medicare False Claims Scheme uncovered by the Medicare Fraud Strike Force

2008-06-15T10:25:00.001-07:00

Four Miami men have been charged in $110 Million Medicare False Claims Scheme that was uncovered by the Medicare Fraud Strike Force. According to the Department of Justice’s Criminal Division and the U.S. Attorney’s Office for the Southern District of Florida, Carlos and Luis Benitez, Jose Benitez and Thomas McKenzie were all allegedly involved in the Medicare Fraud. The alleged fraud happened from January 2001 through November 2004.

The four men are accused of conspiring to submit $110 Million in fraudulent false Medicare Claims for HIV infusion services provided at the following 11 HIV infusion clinics: AH Medical Office Inc.; Advanced Medical Rehabilitation Center Inc.; Best Medi Corp.; Physician’s Health Med-Care; Physician’s Med-Care Inc.; Saint Jude Rehab Center Inc.; Global Med-Care Corp.; CNC Medical Corp.; G&S Medical Centers Inc.; Karla Medical Services Inc.; and Best Medicare Inc.

According to the indictment, The Medicare False Claims Scheme involved recruiting Medicare beneficiaries to go to the Clinics under the false pre-tense of needing HIV infusion services. Physicians and medical staff were trained to fraudulently show that medical services were performed and medically necessary.

Thanks to the valiant efforts of Deputy Chief Kirk Ogrosky's Strike Force Team and U.S. Attorney R. Alexander Acosta's outstanding prosecutors, this Medicare fraud was uncovered. We applaud their efforts and hard work.

Five Ways we can combat Medicare False Claims fraud and prevent new schemes

First, we can prosecute people and companies that are guilty of Medicare False Claims.
Second, we can ask for Whistleblowers to come forward and report the fraud/ false claims.
Third, we can support the Medicare Fraud Strike Force team by ensuring they are adequately funded and staffed to handle the investigations and prosecution.
Fourth, we can pass stringent legislation that helps prosecute those found guilty of fraud/false claims.
Fifth, we can make it easier to reward whistleblowers for coming forward and reporting Medicare fraud and Medicare false claims schemes and simplify the process.

If you, or someone you know, has information on government fraud or false claims to the government, we encourage you to step forward and report this information. To learn more about qui tam and the false claims act, we invite you to read our firm website on the topic area qui tam.

If you have any questions on the subject of qui tam or Federal/State False Claims, Former U.S. DOJ Attorney, Brian F. LaBovick, is available to answer your questions, via email or phone.

Click here to read more from the United States Attorney Office, Southern District of Florida.

Support Action to Protect Whistleblowers - your help is needed

2008-06-12T16:01:00.001-07:00

Dear Readers,

Your help is requested today in an effort to take action in protecting whistleblowers. I received an email today from the organization Project for Government Oversight, and want to share this important information with our loyal readers of the Whistleblower Law Blog. It is a plea for concerned citizens to send a message TODAY to Congress and show support for passing legislation that gives protections to government employees who blow the whistle on waste, fraud, and abuse. Let your Congressperson know that you believe the House's "Whistleblower Protection Enhancement Act of 2007" (H.R. 985) offers stronger protections than the Senate's bill (S. 274).

Please click on the link below and send a message to Congress about this very important issue. We also encourage you send to a "friend". We can make this a "viral" message of importance, to get more people involved in this critical issue.

http://ga6.org/campaign/wpa_2008

It takes only 3 - 4 minutes to complete the form and send to your Congress person and Senators.

We are asking you to take action today. June 12, 2008.

Thanks for your support of legislation that promotes whistleblowers coming forward without fear of retaliation. Stopping Government fraud, abuse and waste should be the fundamental goal.

Brian

ABA holds annual Qui tam and Civil False Claims Act Seminar

2008-06-11T05:11:00.003-07:00

The annual ABA Seminar on Civil False Claims Act and Qui Tam Enforcement will be held in Washington, D.C. June 11-13, 2008.

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.

Florida Hospital pays over $7 million to settle False Claims Act violations due to doctor referrals

2008-06-11T05:11:00.001-07:00

The Baptist Health South Florida Inc., will pay the United States $7,775,000 to settle False Claims Act and the Stark Statute violations that allegedly occurred between 2003 and 2005. According to the Department of Justice this probe involved Baptist Health South Florida, over compensating an oncology group for patient referrals to Baptist's hospitals. The payments were made pursuant to a contract under which the oncology group provided physics and dosimetry services to the two hospitals.

The Stark Statute prevents Medicare providers like Baptist from billing the federal health care program for referrals from doctors that have a financial relationship with the provider. There are a few exceptions for the Stark Statute.

Click here to read more from the Department of Justice and the Sun Herald on this False Claims Act settlement.

The Consumer Product Safety Commission reform bill (S.2045) needs help with Whistleblower protection

2008-06-11T05:11:00.000-07:00

The National Whistleblower Center requests your help in sending a message to your Representative re: The Consumer Product Safety Commission reform bill (S.2045) Whistleblower protections.

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.

Florida-based AccuLab settles Medicare false claims allegations for $461,000

2008-06-11T05:10:00.013-07:00

Florida based, Acculab Laboratories has agreed to settle a qui tam suit alleging false claims and fraudulent billing to Medicare. The company has agreed to pay the United States $461,000 according to the Justice Department. The allegations surrounding the Sarasota based company included included billing Medicare for laboratory services that were not ordered, were not provided, were not medically necessary or were improperly unbundled.

The whistleblower will receive $92,200 of the settlement. The whistleblower provisions of the False Claims Act, allows private parties, called "relators," to file an action on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant.

It is the American taxpayer who is victimized when a provider submits false claims to Medicare," said acting Assistant Attorney General Jeffrey S. Bucholtz.

The case was handled by the Justice Department's Civil Division, Commercial Litigation Branch; and the U.S. Attorney's Office for the Middle District of Florida.

Click here to read more from the Department of Justice

Senator Grassley joins in the filing of a whistleblower tax fraud briefs to the Supreme Court

2008-06-11T05:10:00.011-07:00

On January 19, Senator Charles Grassley filed an Amicus Curiae ("friend of the court") brief in the U.S. Supreme Court case of Allison Engine Co., Inc. v. United States ex rel. Sanders. The Sanders case will have far-reaching impact on the viability of America's most important whistleblower protection law: The False Claims Act.

According to Stephen Kohn, President of the National Whistleblower Center, "If the Supreme Court were to find against the whistleblowers in this case, it will open a loophole by which fraudulent companies will launder their dirty contracts through subcontractors, thereby defeating the presentment requirement."

The Whistleblower Protection Blog and TAF generously provided the briefs filed by the Petitioner's, Respondents, Senator Grassley and Tax Payers Against Fraud.

Click here to see the release issued by the Whistleblower Law Center.

Touro Infirmary settles Qui Tam suit for $1.75 Million

2008-06-11T05:10:00.009-07:00

A New Orleans Hospital, Touro Infirmary, recently settled a qui tam suit for $1.75 million. According to the Department of Justice, the suit alleged that Touro Infirmary, submitted false claims to the Medicare program.

Involved in the Medicare scheme with the New Orleans Hospital, was Dr. Maria Carmen Palazzo. In previous a Whistleblower Blog post, we mentioned Dr. Palazzo's involvement with fraud in Paxil trials. According to the recent qui tam case involving Touro Infirmary, Dr. Carmen Palazzo received unlawful payments of $144,000 per year from 2000 to 2004. This was a part of the scheme to get patient referrals to the hospital from Dr. Maria Carmen Palazzo to refer patients to the hospital. According to recent reports, Dr. Palazzo, was found guilty on 39 counts of health care fraud, including 13 counts arising from her contractual relationship with Touro.

Click here to read more from the Department of Justice, on the False Claims Act settlement from Touro Infirmary.

Walgreen's Pharmacy settles $35 Million Qui tam case

2008-06-11T05:10:00.007-07:00

The Illinois based Walgreen's Pharmacy has agreed to settle a qui tam case for $35 Million that involves drug switching of the following drugs: Ranitidine (or Zantac), which inhibits stomach acid production; Fluoxetine (or Prozac), an antidepressant; and Eldepryl, known generically as selegiline, which is used with other medications to treat the symptoms of Parkinson's disease. Reports showed that Walgreens fraudulently increased reimbursement from Medicaid by switching the form of the drug dispensed to Medicaid patients while providing no additional medical benefit to patients.

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.

New Jersey Governor signs Whistleblower Law

2008-06-11T05:10:00.005-07:00

New Jersey Governor Jon Corzine signed the new bill into law this week. New Jersey is among 20 states that have passed a state False Claims Act with qui tam whistleblower provisions similar to the Federal False Claims Act. The Whistleblower Law Blog reported in early January, the passing of the New Jersey False Claims Act, Bill S232, by the Senate.

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.

Whistleblower Law Blog Hosts Blawg Carnival May 12

2008-06-11T05:10:00.003-07:00

Next week, the Whistleblower Law Blog will host the Blawg Review #159 Blog Carnival on our site. If you are interested in legal news, you know that Blawg Review is the blog carnival for everyone that follows legal news. It is a peer-reviewed blog carnival, where the host of each Blawg Review decides which of the submissions and recommended posts are suitable for inclusion in the presentation. And the host is encouraged to source another dozen or so interesting posts to fit with any special theme of that issue of Blawg Review. The host's personal selections usually include several that reflect the character and subject interests of the host blawg, recognizing that the regular readership of the blog should find some of the usual content, and new readers of the blog via Blawg Review ought to get some sense of the unique perspective and subject specialties of the host.

We are delighted to be a host of the Blawg Review #159.. .... We have admired Blawg Review Carnivals hosted by a few of our favorite legal Bloggers, such as Evan Schaeffer's Legal Underground, Kevin Okeefe's Real Lawyers Have Blogs, Eric Turkewitz's New York Personal Injury Law Blog, and Barry Barnett's Blawgletter (Note: Blawgletter is a registered Trademark), just to name a few...

Whistleblower Law Blog Celebrates One Year Anniversary

2008-06-11T05:10:00.001-07:00

We are pleased to announce that our Whistleblower Law Blog celebrates its one year anniversary. It seems like we started blogging, yesterday.

In addition to states creating and strengthening state qui tam/false claims acts around the country, the world of legal blogging has exploded. When we started, blogging was somewhat a novel idea for law firms. Not anymore, there are over 1500 legal blogs and new ones being created weekly. Check out some of the legal blogs at Kevin O'Keefe's "Real Lawyers Have Blogs", Justia's Justia Blawg Search, Law.com's Legal Blog Watch, ABA Law Journal Blawg Directory, and the Blog carnival Blawg Review to see for yourself.

In the beginning, we had only only a few readers, but we were encouraged by Kevin O'Keefe at LexBlog not to be discouraged but to keep on blogging. Well it has worked, reader traffic increases weekly and page views are over 3500 per month. There was a time when page views reaching 500 was a milestone. We look forward to the numbers surpassing the 5000 mark.

In this past year, we have enjoyed the discussions, learned a lot, and look forward to making the Whistleblower Blog even better. We are working on some cool additions for the blog and look forward to reader feedback.

We encourage readers to share thoughts and opinions about the whistleblower law blog. Our goal is to keep this blog relevant and interesting.

Thanks again for reading our blog and joining us on our blogging journey.

Supreme Court requires Whistleblowers to show there was intent to defraud the government

2008-06-11T05:09:00.013-07:00

In a recent Supreme Court decision today, in the qui tam suit, Allison Engine Co. v. US ex. Rel Saunders, Supreme Court Justice Alito writes in his opinion that "it is not enough under §3729(a)(3) for a plaintiff to show that the alleged conspirators agreed upon a fraud scheme that had the effect of causing a private entity to make payments using money obtained from the Government. Instead, it must be shown that they intended “to defraud the Government.” Where their alleged conduct involved the making of a false statement, it need not be shown that they intended the statement to be presented directly to the Government, but it must be established that they agreed that the statement would have a material effect on the Government’s decision to pay the false or fraudulent claim. Pp 8 -10." 471 F. 3d 610, was vacated and remanded. This was a unanimous decision for the Court.

According to Stephen M. Kohn, the President of the National Whistleblower Center, the Court laid the responsibility for fixing the law directly on Congress: 'Had congress intended' the False Claims Act to 'apply to any one who conspired to defraud' the government 'it would have so provided."

Does this give conspirators planning to defraud the government, a " free pass"? Let's hope this is not the case. Maybe this uncertainty will light a fire under Congress to pass the False Claims Correction Act.

Note to Whistleblowers: Do not let this ruling discourage you from bringing qui tam cases. This decision is only a minor set back. The rules of the game may have changed a little, however, the strategy to bring those guilty of defrauding the government to justice, has become more interesting.

Click here to read entire Supreme Court Opinion for Allison Engine Co. v. US ex. Rel Saunders

Regional Hospital accused of Medicare fraud by U.S. Attorney

2008-06-11T05:09:00.011-07:00

South Carolina Regional Hospital, Tuomey Regional Medical Center, is accused of Medicare and Medicaid fraud in a qui tam lawsuit, brought by the U.S. Attorney's Office in South Carolina. According to a recent article on State.com, the suit involves the Regional Hospital overcharging Medicare for surgeries and “bribing” doctors with “kickbacks” for their business. The case is being handled by U.S. Attorney Norman Acker. The lawsuit alleges that the Toumey Regional Medical Center created a billing scheme from January 2005 to September 2007, in which "it submitted and caused others to submit false and fraudulent claims for payment to Medicare and Medicaid ...”

Judge Matthew Perry ruled yesterday that the Justice Department-backed lawsuit against the South Carolina Regional Hospital can proceed and crucial evidence against the Hospital can be admitted into the f the case. The lawyers for the hospital had been trying to get the case dismissed.

Orthopedic Surgeon, Michael Drakeford, initial qui tam lawsuit was filed under seal in federal court in Columbia in October 2005. The federal government investigated Drakeford’s claims and before taking over as lead plaintiff in the case.

Time will tell how much of the behind-the-scenes, big-profits world of doctors and hospitals in the billion-dollar S.C. health care industry will be revealed. The hospital is expected to answer the allegations by March 28.

The case could be worth millions of dollars to the government if the South Carolina Hospital is found guilty of fraudulently over billing the government or if they decide to settle and no admit any guilt or wrong doing.

Charles Miller, a Department of Justice spokesman is quoted as saying, "The government intervenes only if a case has merit. The department gets involved in less than 25 percent of qui tam actions filed each year. In qui tam cases, the government nearly always gets a settlement or wins in a jury trial."

Click here to read more on this case from the State.com

CVS Caremark Corp. settles Medicaid fraud allegations for $36.7 Million

2008-06-11T05:09:00.009-07:00

In a remarkable turn of events, America's self proclaimed largest pharmacy, CVS Caremark, has agreed to settle Medicaid fraud allegations for $36.7 million. According to information obtained from a whistleblower and extensive research, the company allegedly switched the tablet version of the drug Ranitidine (generic Zantac) to a more expensive capsule version. According to the Justice Department, CVS Caremark allegedly made the drug switch from 2000 to 2006 to increase reimbursements from Medicaid.

The whistleblower, Bernard Listiza, a licensed pharmacist, will be rewarded $4,309,330 for his efforts in bringing this medicaid fraud to light. As previously mentioned previously on the Whistleblower Law Blog, a whistleblower can receive a reward of 15 percent to 25 percent of what the government recovers, if the government joins the qui tam case and if the government declines to join the qui tam lawsuit, the whistleblower can receive a reward of 25 percent to 30 percent of what the government recovers.

We can only hope that these large awards will begin to serve as deterrents for companies such as CVS Caremark to engage in Medicaid fraud. Thanks to the diligence of U.S. Attorneys such as U.S. Attorney Patrick Fitzgerald, the government is pursuing corporations and individuals charged with fraud against the government. In a recent statement, U.S. Attorney, Patrick Fitzgerald, said, “These penalties, coupled with the willingness of insiders to report fraud, should deter such misconduct, but when it doesn’t, the result in this case and others serves notice that we will aggressively pursue all available legal remedies.”

The Whistleblower Law Blog salutes the brave whistleblowers who come forward and the diligent men and women prosecuting fraud on behalf of the government. Sometimes, it may take years and many obstacles to overcome, but it is all worthwhile when a whistle blower's testimony can help the government recoup dollars and treble damages from Corporations and individuals that are found defrauding the government.

Click here to read more from the Department of Justice.

Senate Committee votes for False Claims Act Amendments, S. 2041

2008-06-11T05:09:00.007-07:00

S. 2041, has received support from leadership in both parties and has moved out of the Senate Committe. Leading the charge is: Sen. Charles Grassley (R-IA), Senator Richard Durbin D-IL), Senator Patrick Leahy (D-VT), and Senator Arlen Specter (R-PA).

Proponents of S. 2041, note that the new bill clarifies the existing scope of False Claims Act liability, while closing the gap of a limited amout of loopholes for companies to use for stealing money from taxpayers.

Specifically, S.2041 would:

Remove the confusion over the statute of limitations period by adopting a straightforward 10-year period;
Provide strengthened employment protection for whistleblowers.
Clarify that False Claims Act liability protects all federal funds;
Explicitly clarifies that the False Claims Act applies to those who discover an overpayment and decide to pocket the funds
Solely vest the Government with the power to dismiss whistleblower-filed False Claims Act lawsuits that are based on public allegations.

According to Jeb White, President of Taxpayers against Fraud, "This Bill has broad bi-partisan support. It's hard to be opposed to building a better rat trap to catch corporate cheats, chiselers, and con artists."

As mentioned here previously on the Whistleblower Law Blog,
highlights of the bill include:

Makes corrections to 31 U.S.C § 3729 removing the requirement that false claims be presented to a government employee.
Amends the FCA to clarify the dismissal of parasitic claims filed based upon publicly disclosed information.
Clarifies that false or fraudulent claims against non-U.S. Government funds under the trust and control of the U.S. Government are subject to recovery under the FCA.
Clarifies a split between Circuit Courts of Appeal as to when a government employee may act as a qui tam relator under the FCA.
Makes technical and clarifying amendments to the statute of limitations in FCA cases.

Click here to read the False Claims Act Corrections Legislation 2007.

Florida doctor settles Medicare qui tam suit for $7 million

2008-06-11T05:09:00.005-07:00

Medicare fraud can happen anywhere and can be detected by the most least suspecting individual in a company. Recently, Fred Steinberg, M.D, a radiologist and owner of the chain, of University MRI and Diagnostic Imaging Centers, located in Florida settled a qui tam suit for $7 million. The Florida firm denied all charges and agreed to settle the qui tam suit according to a quote in the Sun Sentinel "to end the uncertainty of protracted litigation."

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.).

Louisiana introduces False Claims Act and qui tam bill in Extraordinary Session

2008-06-11T05:09:00.003-07:00

This week the Louisiana Legislature along with Governor Bobby Jindal, launched an "Extraordinary Session". In a bi-partisan effort, the legislators joined together to introduce and strengthen key legislation that combats government fraud in their state. The Senate, led by Senator Kostela, introduced SB 41 , a Louisiana False Claims Act, which is aimed at authorizing qui tam incentives and standing to citizens to pursue certain fraud claims. The House, led by Rep. Jim Tucker, introduced, HB 69, which is aimed at, Authorizing a qui tam action for persons who disclose certain cases of fraud.

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.

SB 41 gives the following introduction into the purpose of the Bill:

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.

Defense counsel presents interesting arguments on New Jersey's False Claims Act

2008-06-11T05:09:00.001-07:00

This week, Defense Counsel, Mark S. Olinsky of Sills Cummis & Gross P.C., wrote an article for the Metropolitan Corporate Counsel, titled "Defending Qui Tam Suits Under New Jersey's New False Claims". One may find it strange for a Plaintiff's firm to highlight an article written by a Defense firm. Howeverm, this article is well written, provides a good introduction of the history of the False Claims Act, and acknowledges the New Jersey False Claims Act that will go into affect on March 13, 2008. As previously mentioned on the Whistleblower Law Blog, New Jersey is among 20 states that have passed a state False Claims Act with qui tam whistleblower provisions similar to the Federal False Claims Act.

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.

Spinmeisters try to smear the new False Claims Act Correction 2008

2008-06-11T05:09:00.000-07:00

I want to laugh when people buy into corporate propaganda. Don't you just love people who believe in a "trickle down" theory will actually trickle down to them. I also laugh when the oil companies cry that OPEC is charging too much and Exxon posts multi-Billion dollar profits. Do you believe them? How about the insurance industry that cries about how lawsuits are killing them, and turn around and post multi-billion dollar profits year after year. Corporations spin this propaganda until the average American believes it. Isn’t it Amazing?

The new spin from Beck/Herman legal bloggers for the Drug and Device Law blog claims that The False Claims Act is a "stealth tax". I was shocked by this sentiment when I came across their post “By Litigation - A Dubious Proposal To Expand False Claims Act Liability”. I am not sure what they are reading, but the last time I read the act, the purpose of the act was to catch companies and individuals that are ripping off the Federal Government. How anyone can refer to the False Claims Act as a Stealth Tax is an act of spin that is worth memorializing.

The Beck/Hermann post acts as if the poor company is being looted by pirates instead of realizing that it is the pirates who are being brought to justice. So, don't let the “spinmeisters” confuse you. What would you prefer, letting the poor companies continue to rip off your tax dollars so they can get richer and richer while you pay more and more in taxes?

If you are new to qui tam and the False Claims Act, it is a piece of legislation that involves privately owned companies doing business with the Federal Government that are caught defrauding the government. If found guilty, the private business must pay back the money stolen from the government, plus three times the stolen amount, plus attorney fees, plus costs, plus a fine. The goal of the False Claims Act is to send a warning message to the corporate community that stealing from the government does not pay.

Tough love, right? But it makes sense. If you are caught defrauding the government, you should pay up. Not pay back, but really pay up. A company needs to be penalized hard because it is easy and sometimes profitable (until caught) for a company to defraud the government. So much so, that many companies do it every year. However, it does not make it right for companies to make “billions” of dollars from defrauding from our government. Now, how does the government get the money to pay these defrauders? TAXES. How else?

Is it a "stealth tax" to get money back from companies that stole it in the first place? Isn't that absurd! Yes, there is severe punishment as well. But is that the "stealth tax"? Of course not. Taxes are not punishment. They are the social compact investment in the infrastructure of our nation. Some people may believe we need less infrastructure. Some people want more. That is not the issue. The issue is that we have a solid foundation of representative government that works when the people at the top are honorable and working for the people. (That is a whole other issue I simply can't digress into here). Taxes are simply not punishment and the False Claims Act has nothing to do with taxes.

The fact that the False Claims Act rewards Whistleblowers with between 15% and 30% of the take is not relevant to the act itself because the government uses the False Claims Act all the time without whistleblowers. However, private whistleblowers are awesome. They dig out the fraud and the report it to the authorities. For this, they usually lose their job, lose their homes, and lose their standing in the professional community. They turn their lives upside down. Then 7 years later when the case settles, most of them get a small payout of about 16% (that is a common statistic used for the typical payout) of whatever the government collects. Yes, collects. Not "sues for", collects, which can be hundreds of millions shy of the original fraud claim. Why would anyone do it, If there were no hope for the whistleblower to recover anything,. Who would report the fraud? The intent of the law is to motivate people with money to report fraud.

What happened last year was that the Supreme Court changed the rules. They created a situation where the company doing the fraud could set up a fall guy companies to act as subcontractor intermediaries. These subcontractors would then dilute the fraud between the layers of corporate chaos and by the time, you get to the underlying fraud scheme it is so diluted and mixed up that no fraud charges can be made. The new law cleans up that loophole. Nothing more then a stopgap to a great fraud scheme that our very literal Supreme Court felt they could not stop without a change in the law.

Sorry for the rant, but the position that this is a "Tax" is so absurd as to deserve both the sarcasms and the diatribe.

Off the soapbox till next time: I would love to know your thoughts on this. Drop me a line or post a comment on the Whistleblower Law Blog.

Brian

Illinois ushers in enhanced Whistleblower Protection Act Jan. 1 2008

2008-06-11T05:08:00.002-07:00

Illinois has strengthened their whistleblower protection laws as of January 1, 2008. The Illinois legislators expanded existing whistle-blower laws and increased the protections and rewards earned by people reporting fraud. According to Lt. Governor Pat Quinn, in a Chicago Tribune article, the new Illinois Whistleblower Protection Act protects people from getting fired if they report fraud and gives them up to 30 percent of the amount recovered. The government can also collect treble damages for the fraud in restitution and levy fines up to $10,000.

The Illinois (740 ILCS 175/) Whistleblower Reward and Protection Act was introduced by Rep. John A. Fritchey, former Illinois Assistant Attorney General.

CIVIL LIABILITIES
(740 ILCS 175/) Whistleblower Reward and Protection Act.

(740 ILCS 175/1) (from Ch. 127, par. 4101) Sec. 1. This Act may be cited as the Whistleblower Reward and Protection Act. (Source: P.A. 87?662.)

(740 ILCS 175/2) (from Ch. 127, par. 4102) Sec. 2. Definitions. As used in this Act:
(a) "State" means the State of Illinois; any agency of State government; the system of State colleges and universities, any school district, community college district, county, municipality, municipal corporation, unit of local government, and any combination of the above under an intergovernmental agreement that includes provisions for a governing body of the agency created by the agreement.
(b) "Guard" means the Illinois National Guard.
(c) "Investigation" means any inquiry conducted by any investigator for the purpose of ascertaining whether any person is or has been engaged in any violation of this Act.
(d) "Investigator" means a person who is charged by the Department of State Police with the duty of conducting any investigation under this Act, or any officer or employee of the State acting under the direction and supervision of the Department of State Police, through the Division of Operations or the Division of Internal Investigation, in the course of an investigation.
(e) "Documentary material" includes the original or any copy of any book, record, report, memorandum, paper, communication, tabulation, chart, or other document, or data compilations stored in or accessible through computer or other information retrieval systems, together with instructions and all other materials necessary to use or interpret such data compilations, and any product of discovery.
(f) "Custodian" means the custodian, or any deputy custodian, designated by the Attorney General under subsection (i)(1) of Section 6.
(g) "Product of discovery" includes:
(1) the original or duplicate of any deposition, interrogatory, document, thing, result of the inspection of land or other property, examination, or admission, which is obtained by any method of discovery in any judicial or administrative proceeding of an adversarial nature;
(2) any digest, analysis, selection, compilation, or derivation of any item listed in paragraph (1); and (3) any index or other manner of access to any item listed in paragraph (1).

(Source: P.A. 95?128, eff. 1?1?08.)

(740 ILCS 175/3) (from Ch. 127, par. 4103)
Sec. 3. False claims.
(a) Liability for certain acts. Any person who:
(1) knowingly presents, or causes to be presented, to an officer or employee of the State or a member of the Guard a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the State;
(3) conspires to defraud the State by getting a false or fraudulent claim allowed or paid;

(4) has possession, custody, or control of property or money used, or to be used, by the State and, intending to defraud the State or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt;

(5) authorized to make or deliver a document certifying receipt of property used, or to be used, by the State and, intending to defraud the State, makes or delivers the receipt without completely knowing that the information on the receipt is true;

(6) knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the State, or a member of the Guard, who lawfully may not sell or pledge the property;

(7) knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the State;

(8) knowingly takes adverse employment action against an employee for disclosing information to a government or law enforcement agency, if the employee has reasonable cause to believe that the information discloses a violation of State or federal law, rule, or regulation; or

(9) knowingly retaliates against an employee who has disclosed information in a court, an administrative hearing, before a legislative commission or committee, or in another proceeding and discloses information, if the employee has reasonable cause to believe that the information discloses a violation of State or federal law, rule, or regulation, is liable to the State for a civil penalty of not less than $5,500 and not more than $11,000, plus 3 times the amount of damages which the State sustains because of the act of that person. A person violating this subsection (a) shall also be liable to the State for the costs of a civil action brought to recover any such penalty or damages.
(b) Knowing and knowingly defined. As used in this Section, the terms "knowing" and "knowingly" mean that a person, with respect to information:
(1) has actual knowledge of the information;
(2) acts in deliberate ignorance of the truth or falsity of the information; or
(3) acts in reckless disregard of the truth or falsity of the information, and no proof of specific intent to defraud is required.
(c) Claim defined. As used in this Section, "claim" includes any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the State provides any portion of the money or property which is requested or demanded, or if the State will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded. A claim also includes a request or demand for money damages or injunctive relief on behalf of an employee who has suffered an adverse employment action taken in violation of paragraphs (8) or (9) of subsection (a).
(d) Exclusion. This Section does not apply to claims, records, or statements made under the Illinois Income Tax Act.
(Source: P.A. 94?1059, eff. 7?31?06; 95?128, eff. 1?1?08)

Click Here to read the entire Illinois Whistleblower Protection Reward Act

Blawg Review #159

2008-06-11T05:08:00.000-07:00

This week, The Whistleblower Law Blog is delighted to host Blawg Review #159, the blog carnival for everyone interested in law.

During the week of May 11-18, 2008, independent whistleblower coalitions, such as the International Association of Whistleblowers (IAW), the Make it Safe Campaign, and many other independent whistleblower coalitions, will hold a series of simultaneous but separate events in Washington, D.C.. These events are designed to lobby Congress and alert the public to the need to support whistleblower protection. Some of the speakers for the Whistleblower Week 2008 in Washington D.D., include: Adam Kokesh, Iraq Veterans Against the War, Rev. Lennox Yearwood Jr, a former United States Air Force chaplain, and Congresswoman Sheila Jackson.

A few of the discussions shared on blogs covering Whistleblower topics this week included the following posts:

...In a post on the Whistleblower Protection Blog, Marshall Chriswell talks about a hearing by the Democratic Policy Committee for Monday, May 12th. The purpose of the hearing is to "examine the impact of American reconstruction and anti-corruption failures on the U.S. mission in Iraq." Hopefully this will become an important bi-partisan issue to the Republican policy committee too.
...In a post on the Balkanization Blog, Marty Lederman discusses : The Military Commission Decision Disqualifying the Legal Adviser, Brig. Gen. Thomas Hartmann. Interesting how the media is covering this story in the various outlets.
...In a post on the Virginia Qui Tam Law Blog, Zachary Kitts discusses his rebuttal to an editorial in the D.C. Examiner on the False Claims Correction Act of 2007. Blogging is a great way to voice your opinions to information found in the traditional papers and online. Let's hope that the Republicans and Democrats find a way to support this important legislation that Senator Grassley and several others have worked so diligently to make it a bi-partisan effort.
...In the formerly named Question Authority Blog, Peter Rost, (One of the world's most well-known and whistleblowers) tries on the new site name Pharma Law Blog for size. Personally, I think it sounds great. Good Luck with the new name.

To add some fun and to bring back memories, I thought that I would use a few Nursery Rhymes to help me out with the Blawg Carnival. I hope that it brings a "Smile on Your Face" while reading the stimulating posts selected for the Blawg Carnival this week.

Our first Nursery Rhyme is: London Bridges: London Bridge Is falling down, Falling down, Falling down. London Bridge Is falling down, My fair lady.

... In My Shingle, Carolyn Elephant has a great post with burning bridges and finding new ones. She bravely admits being wrong about a previous opinion on how an associate handled a termination from a law firm. I see this as just changing one's opinion, once more facts were presented. How refreshing to reassess a situation in light of new facts.
...In Law 21, Jordan Furlong discusses an important subject: Burning the Law Firm Newsletters. Okay, I must admit burning them all together is a bit harsh. You can also survey clients and ask what topics are of interest to them. Implementing reader feedback is a way to make it better.

This leads to our next Nursery Rhyme: Humpty Dumpty
Humpty Dumpty sat on a wall. Humpty Dumpty had a great fall. All the king's horses and all the king's men, Couldn't put Humpty together again.

...In the Legal Scoop, Scott Felsenthal, raises valid points in his post about the wear and tear of the practice of law. In the legal profession as well as in life, we should be aware of stressful things and take the appropriate actions to prevent Burnout.
...In the Sports Law Blog, Geoffrey Rapp, discusses the tragedy that happened to the filly, Eight Belles, the recent Kentucky derby, runner-up that had to be put down, due to two broken ankles. Sadly, I was rooting for Eight Bells to win. I wonder if she had not been pushed so hard, would she be with us today?

This leads me to our next Nursery Rhyme: Itsy Bitsy Spider:

The itsy bitsy spider went up the water spout.
Down came the rain, and washed the spider out.
Out came the sun, and dried up all the rain
And the itsy bitsy spider went up the spout again.

....In the Business Association's Blog on Law and Business, Stephen Bainbridge writes an interesting post about the Yahoo and Microsoft Merger that never happened. A strategic Partnership can be a poison pill. Time will tell if Yahoo/Microsoft merger will make another attempt at trying to reach an agreement in the future.
....In Lowering the Bar, Kevin Underhill, discusses the battle going on in the state of Oregon, regarding the publishing of the laws by some legal websites, such as Justia.com and Public Resource.org. We are all anxious to see how the Iowa copyright fight plays out,

This leads to our next Nursery Rhyme: Hickory, dickory, dock:
Hickory, dickory, dock
The mouse ran up the clock.
The clock struck one,
The mouse ran down,
Hickory, dickory, dock

...In James5, Devon Whittle, discusses the dynamics of being involved in the ELSA WTO Moot Team. Enjoy and savor your University experiences, because time passes away so quickly.
...In the California Blog of Appeal, Greg May discusses what leads parties to appeal. It is anyone's guess what makes the losing party feel they will win a case on appeal, especially, when the deck was stacked up against them in the first trial.

This leads me to our next Nursery Rhyme: Jack and Jill

Jack and Jill went up the hill
to fetch a pail of water;
Jack fell down and broke his crown,
And Jill came tumbling after.

...In the Drug and Device Law Blog, post on "Warning-Causation, authors Jim Beck/Mark Hermann, share "their views" of the all-time greatest pro-defense decisions in pharmaceutical product liability claims.
...In the new niche Marler Clark Enterobacter Sakazakii Blog, the E. Sakazakii Lawyer, sheds light on how infant milk supplements are getting contaminated and can lead to meningitis. We can see that this cause and affect can be dangerous to infants health. Let's hope they fix this real soon.

I really enjoyed hosting this week's Blog Carnival (Blawg Review #159). Thank you to everyone who submitted posts this week. There was so much to choose from, I hope that my final selections are enjoyed by all.

Until we meet again: Please remember: Implement a few things each day to help preserve our planet. Every Day can be Earth Day. For example:
1. Lower your thermostat. Buy a programmable thermostat.
2. Reuse your water bottle. In fact, reuse everything at least once, especially plastics.

Check out the Blog Divine Caroline for more Energy Saving Tips.