Occidental Oil to Pay $2.5M for Royalty Underpayments from Federal Land
August 27, 2011 by casey
The settlement arises from a lawsuit filed by a whistleblower, Harrold Wright, under the False Claims Act against the Occidental oil companies as well as a number of other companies. Because Mr. Wright is deceased, his heirs will receive $91,000, plus interest, as his share of the settlement. The United States initially declined to participate in this case, but was actively involved in the discussions that led to this settlement. The current settlement brings the total recovery in the case to approximately $230 million.
Congress has authorized federal land to be leased for the production of natural gas in exchange for the payment of royalties on the value of the gas that is produced. Each month, companies are required to report to the Department of the Interior the amount of royalty that is due. This settlement resolves claims that the Occidental oil companies improperly deducted the cost of boosting gas up to pipeline pressures from the royalty values they reported, and failed to properly report and pay royalties related to a natural gas keep-whole agreement, pool pricing for gas and gas re-sold to affiliates.
If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
CEO of KV Pharmaceutical Given One Month in Jail; $1M Fine
August 27, 2011 by casey
On March 11, 2011, Missourinet announced the sentencing of former CEO of KV Pharmaceutical Marc Hermelin to one month in jail and a fine of $1 million for misbranding drugs. He also was made to forfeit $900,000. KV Pharmaceuticals was once one of the St. Louis area’s biggest drug companies.
Court records show Hermelin ordered the company to increase its daily drug production about 80 percent at a time when internal auditors were finding oversized and irregular tablets that were shipped out to pharmacies.
If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
Medline to Pay $85 Million to Resolve Kickback Allegations
August 27, 2011 by casey
On March 11, 2011, Reuters announced that Medline, an Illinois medical products company, is paying $85 million to settle a whistleblower lawsuit accusing it of paying fraudulent kickbacks to hospitals and companies such as HCA Inc and HealthSouth Corp (HLS.N) that buy supplies paid for by Medicare and Medicaid.
The case was brought forth by a whistleblower, former Medline employee Sean Mason, who will receive $23.4 million of the total sum paid back to the US government. In his complaint, Mason contended that privately held Medline offered the kickbacks to win new business. He said some of these kickbacks were falsely labeled as “rebates,” and others took the form of junkets, expensive gifts and charitable donations.
Mason’s attorneys called the accord one of the largest involving alleged violations of the False Claims Act in which the federal government chose not to get involved.
If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.
CVS Settlement featured in Minnesota Lawyer
May 17, 2011 by nick
Our recent False Claims settlement with CVS was covered by Minnesota Lawyer. It is reprinted here with permission:
Medicaid fraud case nets $2.6M award
Friday April 29, 2011
By Barbara L. Jones
A team of lawyers including James G. VanderLinden, seated, and Robert P. Christensen, Brian Wojtalewicz and Neil P. Thompson took on Big Pharma and won. (Staff photo: Bill Klotz)
Once again, a team of Minnesota lawyers has taken on Big Pharma and won.
Neil P. Thompson, Robert P. Christensen, Brian Wojtalewicz and James G. VanderLinden recently settled a qui tam case against the pharmacy chain CVS for $17.5 million. The whistleblower/relator, pharmacist Stephani LeFlore of Minnesota, alleged that CVS designed a billing software program that consistently overcharged Medicaid for prescription drugs.
LeFlore and her attorneys will receive $2,595,460 under the state and federal False Claims Acts, and are also entitled to receive attorney fees from CVS. The reward is 16 percent of the settlement, a little bit more than the national average of 15.6 percent. The amount of the attorney fee is still under negotiation.
The four lawyers also sued Walgreens in 2005 for using a billing system that cheated Medicaid. That case settled in 2008 for $9.9 million with the whistleblowers – Thompson, who is a pharmacist as well as a lawyer, and another man – receiving $1.44 million plus fees.
In the CVS case, the fraud arose in connection with customers who were on Medicaid and also had private health insurance coverage. In the 10 states involved in the lawsuit – California, Massachusetts, Michigan, Minnesota, Florida, Indiana, Alabama, Nevada, New Hampshire and Rhode Island – CVS was supposed to charge the insurance companies a certain amount for prescriptions, with a limited co-pay charged to the customers. This limited co-pay was assigned to Medicaid.
But LeFlore, who is a pharmacist at CVS, alleged that CVS consistently overcharged Medicaid for the co-pays. She claimed that overcharges occurred on hundreds of thousands of prescription sales for over five years. To support her claims, she first gathered data from CVS’s computers, Christensen said.
LeFlore was told by her attorneys to look to see how much CVS had billed Medicaid, and then contact the state and the insurance companies to see how much CVS was entitled to.
Because the same attorneys had handled the Walgreens case, it was easier to know what to look for, Thompson said.
“She … had a tip as to what to look for, because of the previous cases,” he noted.
Once LeFlore had collected the information, she and her attorneys could run the numbers and see a pattern, Wojtalewicz said.
Before filing their case, LeFlore’s attorneys wanted to make sure they were bringing good information to the table.
“We wanted to have some of the juice before we got to the government to build up our credibility, to prove our case,” Christensen said. “Not only do we have to sell it to ourselves, we have to sell it to the government lawyers and then it has to get sold to the defendant.”
Typically, a relator files a complaint under seal. This allows the government, if it decides to intervene, to investigate though its own channels before informing the object of the investigation. If the investigation reveals a basis for going forward, a judge partially lifts the seal and advises the defendant of the case. Then the parties may negotiate a settlement, keeping in mind that the law allows for treble damages and a penalty of $5,500 to $11,000 for each claim falsely filed, VanderLinden said.
As the case develops, the relator’s attorneys may find themselves in conflict with the government over their share.
“We often end up negotiating with the government,” Wojtalewicz said.
He said that many private lawyers who work with qui tam cases become frustrated because the federal attorneys are “smothered” in False Claim Act matters. “We think they cherry-pick. They take the biggest and most easily proven, and you can’t blame them.”
In this case, the government almost backed away because they didn’t think there were enough damages to make it worth pursing. But LeFlore’s lawyers persisted and the government eventually came around.
Qui tam cases are frustrating for the relator, noted Thompson, because he or she is generally still employed by the defendant.
“One of the important take-aways for lawyers … is to emphasize that the whistleblower should get advice early before he or she reports inside the company,” Wojtalewicz said. Otherwise, “you’re painting a big target on your back.”
Venue is an important issue in qui tam cases. In the LeFlore case, one of the first strategic decisions the team made was to sue in federal court in Wisconsin, which is in the Seventh Circuit. “Eighth Circuit opinions on false claims really are oriented to the corporations, not the whistleblower,” Wojtalewicz explained.
