CVS Settlement featured in Minnesota Lawyer

May 17, 2011 by  

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

The False Claims Act Attorney Group

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.

Stephani LeFlore, as Relator for the United States v. CVS Pharmacy, Inc.

May 14, 2011 by  

CVS pays $17.5 Million to settle Medicaid Fraud

CVS, the giant retail pharmacy chain, has agreed to pay $17.5 Million to settle a whistleblower lawsuit accusing it of Medicaid fraud (“welfare fraud”).


According to her False Claims Acts lawsuit, CVS pharmacist Stephani LeFlore of Minnesota brought evidence to the government that CVS used a billing system for years that was designed to overbill Medicaid on prescription charges. Ms. LeFlore is represented by Minnesota attorneys Neil Thompson, Brian Wojtalewicz, Robert Christensen, and James VanderLinden, with local counsel Aaron Halstead of Madison, Wisconsin, where the case was filed in federal court.

It was done in relation to dual-eligible customers – those legitimately on Medicaid who also maintained their private health insurance coverage. The insurance coverages required CVS to charge the insurance company a smaller amount for prescriptions, and limited co-pay from the customer. When a person is allowed Medicaid coverage, the government always obtains an assignment of the person’s rights under their private health insurance coverage. The government essentially takes over the citizen’s rights under the coverage. This includes the common right to pay a smaller co-pay amount on prescriptions.

Ms. LeFlore claimed in her federal and state lawsuits that CVS should only have billed the Medicaid program the same limited co-pay on prescriptions that it would have normally billed the customer under the insurance plan. She alleged that CVS designed a billing software program for its pharmacies that consistently overcharged Medicaid on these co-pays. She claimed that these overcharges occurred on hundreds of thousands of prescription sales for well over five years.

The $17.5 Million settlement covers over-billings by CVS in the states of Minnesota, California, Massachusetts, Michigan, Florida, Indiana, Alabama, Nevada, New Hampshire and Rhode Island.

Ms. LeFlore first complained internally, but she was told by a supervisor that “corporate took care of the billing” and that she need not be concerned. She then retained her attorneys and commenced the False Claims Acts (qui tam) lawsuit in September, 2008. The lawsuit stayed under seal (non-public), according to the False Claims Acts and court orders, until the announcement of this settlement.

Ms. LeFlore and her attorneys will receive $2,595,460.00 as the reward under the federal and state False Claims Acts. They are also entitled to receive attorney fees from CVS.


Only CVS had the information necessary to reveal the correct, legal price established by the contracts of CVS with the insurance companies or related pharmacy benefit manager companies (PBMs). The states’ Medicaid agencies did not have this information. The Medicaid program is jointly financed by the Federal and State governments. It is administered by an agency in each state. Some state Medicaid agencies were aware of this wrongful billing potential, and directly addressed it in their rule making. Other states, particularly those states not included in the settlement, have missed the overbilling and are still paying it.


The government team on the investigation, negotiations and settlement was led by Leslie Herje, Assistant United States Attorney in Madison, Wisconsin, and Allie Pang, Trial Attorney in the Department of Justice, Civil Division, in Washington, D.C., with assistance from Nancy Mahoney, Assistant Attorney General in Massachusetts, and Elizabeth Valentine, Assistant Attorney General in Michigan.

Special Agents Jennifer Bowers and Gary Nelson of the federal Health and Human Services Office of Inspector General, and Joni Connell and Tom Gomach of the U.S. Attorney office in Madison, Wisconsin, provided good assistance to the lawyers for the government in the investigation.


CVS, the nation’s largest retail pharmacy giant, operates with over 7,100 stores across America.


The original federal False Claims Act was made law by Abraham Lincoln and the Civil War Congress, to enlist citizen whistleblowers in the fight against fraudulent war industry profiteers. It empowers citizens by giving them a reward, and substantial legal rights against retaliation by employers. In its present form, the government and whistleblowers can recover up to three times the amount of the fraud, plus substantial penalties and attorney fees. Whistleblowers (who are called “relators” under the law) may recover from 15% to 30% of the amounts collected from the frauding corporation. At least 29 states have passed their own similar false claims acts, and many other states are in the process. The government has recovered over $5.5 Billion against frauding corporations just since 2009. Medicaid and Medicare fraud, along with military contracting fraud, are the largest areas for recoveries, but ethical citizens have exposed fraud in the education, environmental and transportation fields, and in other areas of federal and state spending. The new state laws will help honest citizen whistleblowers and the government bring corporations cheating state taxpayers to account. More citizens are also using the newer IRS whistleblower reward law to bring tax cheating corporations to justice.


Ms. LeFlore’s attorneys Neil Thompson, Brian Wojtalewicz, Robert Christensen, and James VanderLinden have years of experience confidentially advising and representing citizen whistleblowers in false claims act cases.

Their website is


Neil P. Thompson

Law Offices of Neil P. Thompson

2249 East 38th Street

Minneapolis, MN 55407-3083



Brian Wojtalewicz

Wojtalewicz Law Firm, Ltd.

139 N Miles St.

Appleton, MN 56208



Robert P. Christensen

Robert P. Christensen, PA

670 Park Place East

5775 Wayzata Blvd.

St. Louis Park, MN 55416



James G. VanderLinden

LeVander & VanderLinden, P.A.

5775 Wayzata Blvd.

670 Park Place East

St. Louis Park, MN 55416



Aaron N. Halstead, Esq.

Hawks Quindel, S.C.

222 W. Washington Ave., Suite 450

Madison, Wisconsin 53701-2155

Tel: 608-257-0040



  • Neil P. Thompson

Neil P. Thompson is uniquely qualified to observe and analyze fraud in

the pharmaceutical industry, as a licensed attorney experienced with class

action litigation involving pharmacy pricing and the Federal and State

False Claims Acts, and a licensed pharmacist for 34 years, both as a

pharmacy owner and working for over 130 different chain pharmacy



  • Brian Wojtalewicz

Brian Wojtalewicz is the President-elect of the Minnesota Association for

Justice (formerly the Minnesota Trial Lawyers Association). For over a

decade he has been voted a Super Lawyer by his civil trial attorney peers

in Minnesota.


  • Robert P. Christensen

Robert P. Christensen, P.A. is the Plaintiff/Consumer member of the

International Society of Primerus Law Firms in the State of Minnesota.

He is currently the Dean-Elect of the Academy of Certified Trial Lawyers

of Minnesota and Member of. the American Board of Trial Advocates.


  • James G. VanderLinden

Jim VanderLinden has been an experienced and respected Minnesota trial

lawyer for decades. He is a member and past Dean of the Academy of

Certified Trial Lawyers of MN. He is also a member of the American

Board of Trial Advocates, an international organization of highly qualified

trial lawyers. He has been fighting corporate America for more than 3



  • Aaron Halstead

Aaron Halstead is the past Chair of the Wisconsin State Bar Association’s

labor & employment law section, with over 20 years of success in the

labor and employment law fields. He is also on the Board of Directors of

the Workers’ Rights Center in Madison, Wisconsin.

Eli Lilly Settles For Largest Criminal Fine in US History

February 9, 2010 by  

On January 15, 2009, the Department of Justice reported that Eli Lilly and Company has agreed to plead guilty and pay $1.415 billion to resolve civil and criminal allegations.  The resolution includes a criminal fine of $515 million, the largest criminal fine ever imposed on an individual corporation in a United States criminal prosecution. The pharmaceutical giant will also pay as much as $800 million in a civil settlement with the federal government and multiple states.

Eli Lilly has agreed to the resolution in order to resolve allegations that it promoted its drug, Zyprexa, for uses not approved by the Food and Drug Administration. The Food, Drug, and Cosmetic Act (FDCA) mandates that companies specify the planned uses of a product in its “new drug” application to the FDA. The FDA then determines whether or not the drug is safe and effective for its intended use. After its approval, a drug may not be marketed or promoted for non-specified, or off-label, uses.

Zyprexa, originally approved in 1996 as a treatment for manifestations of psychotic disorders and in 2000 for the short-term treatment of schizophrenia, was promoted by Eli Lilly for unapproved uses included the treatment for dementia, including Alzheimer’s dementia, in elderly people. The information contained in the agreements the Eli Lilly has signed allege that the company knowingly promoted Zyprexa for off-label uses, and trained its sales force to disregard the law. It also claims that Eli Lilly marketed Zyprexa to primary care physicians, despite Zyprexa having virtually no approved use in the primary care market. Through false marketing, Eli Lilly caused false claims for payment to be submitted to Medicaid, TRICARE, and the Federal Employee Health Benefits Program, none of which provide coverage for off-label uses.

“Off-label promotion of pharmaceutical drugs is a serious crime because it undermines the FDA’s role in protecting the American public by determining that a drug is safe and effective for a particular use before it is marketed,” said Gregory G. Katsas, Assistant Attorney General for the Civil Division. “This settlement demonstrates the Department’s ongoing diligence in prosecuting cases involving violations of the Food, Drug, and Cosmetic Act, and recovering taxpayer dollars used to pay for drugs sold as a result of off-label marketing campaigns.”

“The illegal scheme used by Eli Lilly significantly impacted the integrity of TRICARE, the Department of Defense’s healthcare system,” said Ed Bradley, Special Agent-in-Charge, Defense Criminal Investigative Service. “This illegal activity increases patients’ costs, threatens their safety and negatively affects the delivery of healthcare services to the over nine million military members, retirees and their families who rely on this system. Today’s charges and settlement demonstrate the ongoing commitment of the Defense Criminal Investigative Service and its partners in law enforcement to investigate and prosecute those that abuse the government’s healthcare programs at the expense of the taxpayers and patients.”

The global resolution includes the following agreements:

A plea agreement signed by Eli Lilly admitting guilt to the criminal charge of misbranding. Specifically, Eli Lilly admits that between Sept. 1999 and March 31, 2001, the company promoted Zyprexa in elderly populations as treatment for dementia, including Alzheimer’s dementia. Eli Lilly has agreed to pay a $515 million criminal fine and to forfeit an additional $100 million in assets.

A civil settlement between Eli Lilly, the United States and various States, in which Eli Lilly will pay up to $800 million to the federal government and the states to resolve False Claims Act claims and related state claims by Medicaid and other federal programs and agencies including TRICARE, the Federal Employees Health Benefits Program, Department of Veterans Affairs, Bureau of Prisons and the Public Health Service Entities. The federal government will receive $438,171,544 from the civil settlement. The state Medicaid programs and the District of Columbia will share up to $361,828,456 of the civil settlement, depending on the number of states that participate in the settlement.

The qui tam relators will receive $78,870,877 from the federal share of the settlement amount.

A Corporate Integrity Agreement (CIA) between Eli Lilly and the Office of Inspector General of the Department of Health and Human Services. The five-year CIA requires, among other things, that a Board of Directors committee annually review the company’s compliance program and certify its effectiveness; that certain managers annually certify that their departments or functional areas are compliant; that Eli Lilly send doctors a letter notifying them about the global settlement; and that the company post on its website information about payments to doctors, such as honoraria, travel or lodging. Eli Lilly is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for a material breach of the CIA and subject to monetary penalties for less significant breaches.

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.

Dental Management Company Preyed On Vulnerable Children; Will Return $24 Million To Taxpayers

January 27, 2010 by  

The United States announced on January 20, 2010, the settlement of False Claims Act allegations against FORBA Holdings LLC, a dental management company that provides business management and administrative services to 69 clinics nationwide known as “Small Smiles Centers.”

Under the agreement, FORBA will pay the United States and participating states $24 million, plus interest, to resolve allegations that it caused bills to be submitted to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid, which is funded jointly by the federal and state governments. These services included performing pulpotomies (baby root canals), placing crowns, administering anesthesia (including nitrous oxide), performing extractions, and providing fillings and/or sealants.

FORBA has further agreed to put in place various remedial measures designed to prevent similar unlawful conduct from occurring in the future. The government’s investigation of individual dentists is ongoing, and FORBA is cooperating with that investigation by providing information about dentists who may have violated professional standards.

“We will not tolerate Medicaid providers who prey on vulnerable children and seek unjust enrichment at taxpayers’ expense,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “This settlement reaffirms our commitment to protect the health and well-being of Medicaid beneficiaries and to ensure the integrity of this essential health care program.”

The government’s investigation was initiated by three lawsuits filed 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. As part of today’s resolution, the three whistleblowers will receive payments totaling more than $2.4 million from the federal share of the settlement.

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.

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