The case was initiated by whistleblower Harrold Wright under the whistleblower provisions of the False Claims Act, which allow private citizens to file actions on behalf of the United States and share in any recovery. Because Mr. Wright is deceased, his heirs will receive $12,303,787.88, plus interest, as part of this settlement.

Each month, companies are required to report to the Minerals Management Service the value of the natural gas produced from their federal and Indian leases and pay a percentage of the reported value as royalties. This settlement resolves claims by the United States that the Chevron, Texaco and Unocal companies systematically under reported the value of natural gas they took from federal and Indian leases from March 1988 to November 2008 and so paid less in royalties then they owed.

Specifically, the companies were alleged to have 1) improperly deducted the cost of boosting gas up to pipeline pressures, 2) used affiliate transactions to fraudulently reduce the reported value of gas taken from federal and Indian leases, and 3) improperly reported processed gas as unprocessed gas to reduce royalty payments.

“This settlement successfully ends long-standing litigation and ensures that taxpayers receive their fair share of royalty revenues from energy production on federal and American Indian lands,” said Interior Secretary Ken Salazar. “Most of the $45 million settlement will be disbursed to appropriate federal, state and American Indian accounts that were affected by Chevron companies’ underpayment of natural gas royalties and improper deductions.”

The suit brought by Mr. Wright alleges that a number of companies systematically underpaid royalties due for their production of natural gas from federal and Indian lands. The Justice Department previously settled with Burlington Resources Inc. for $105.3 million, Shell Oil Company for $56 million and Dominion Exploration and Production Company for $2 million.

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.

“The Higher Education Act prohibits colleges and universities whose students receive federal financial aid from paying their recruiters based on the number of students enrolled, which creates a risk of encouraging recruitment of unqualified students,” explained Nancy Krop, another lawyer on the trial team. “This case focused a powerful spotlight on that law, and how Congress meant it to be applied.”

“The settlement is a huge victory for taxpayers and the federal government,” according to Robert J. Nelson, lead attorney for the whistleblower plaintiffs. “This settlement sends a clear message to the for-profit education industry compliance with the Higher Education Act’s incentive compensation ban must be achieved,” said Nelson.
The University of Phoenix, which denied the whistleblowers’ allegations, previously paid $9.8 million to the Department of Education in 2004 to resolve administrative claims that it was paying improper incentive compensation to its recruiters. Those administrative proceedings were triggered by the allegations of the same whistleblowers in this case. Nearly $11 million of the $78.5 million will be allocated as statutory attorneys’ fees and costs, a portion of which will be paid to the whistleblowers who brought the case.

The False Claims Act is a federal statute that permits whistleblowers to sue on behalf of the government for fraud committed against the government and to share in the recovery if the suit is successful.

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.

False Claims Act Attorney Group Settles with Nation’s Largest Pharmacy

Along with pharmacists Daniel Bieurance and Neil Thompson, the False Claims Act Attorney Group of Vanderlinden, Christensen, and Wojtalewicz is proud to announce the $9.9 million settlement of a False Claims Medicaid Fraud Case against the giant pharmacy chain Walgreens. Learn more here.
]]> http://www.false-claims-act.com/2008/10/16/walgreens-settlement/feed/ 0 http://www.false-claims-act.com/2008/10/09/small-pharmacy-chain-does-the-right-thing/ http://www.false-claims-act.com/2008/10/09/small-pharmacy-chain-does-the-right-thing/#comments Thu, 09 Oct 2008 20:24:29 +0000 nick http://www.false-claims-act.com/?p=192 With Medicare and Medicaid fraud becoming more and more prevalent it is imperative that whistleblowers like Dan Bieurance and Neil Thompson do the right thing when companies like Walgreens repeatedly over-bill taxpayers. Not all pharmacy chains are as suspect. Take The Stop & Shop Supermarket Company (Stop & Shop), which recently voluntarily reported and returned $269,000 to the Massachusetts Medicaid Program.

From the Press Release:

Stop & Shop…discovered during an audit in 2006 that it had not reported the lowest price it had accepted for certain prescription drug products to MassHealth.  By not reporting the lower prices to MassHealth, Stop and Shop was overpaid by $269,000.  Massachusetts law requires pharmacies to charge Medicaid no more than the lowest price they are willing to accept from any “payer.”  If the pharmacies’ price is lower than the price calculated by the state’s pricing formula, then the state will pay the lowest price.

It is encouraging to see companies self-policing themselves and doing the right thing for their companies and American tax payers. When companies do engage in fraud, either as a mater of practice or oversight, whistleblowers must come forward to do the right thing for them.

Mr. Lisitza, who will collect over $4.3 Million as his legal reward portion of the settlement, delivered evidence to the government that CVS was fraudulently switching prescriptions from the price-capped and less expensive tablet form of ranitidine to the more expensive capsule form in order to charge the government a higher price.

According to the government complaint, the illegal switch caused the federal government to pay CVS more than four times what it would have paid for the tablets. Capsules and tablets are considered different drugs and state pharmacy laws often prohibit the substitution of capsules for tablets. Because ranitidine capsules are so rarely prescribed, the federal government had not set a price ceiling as they had for tablets.

The case alleged that in switching the prescriptions, CVS had violated federal and state False Claims Acts which prohibit submitting fraudulent claims to the federal government. Companies that violate the False Claims Act may be found liable for damages up to three times the amount of the fraud, and $5,500 to $11,000 per false claim. The False Claims Act allows the whistleblower, known as the relator, to awards of 15%-20% of the government’s recovery in a settlement or lawsuit.

Pharmacists like Mr. Lisitza are in a unique position to uncover fraud and have played a critical role in helping state and federal governments recover tens of millions of dollars in false and fraudulent charges.

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.

“Sometimes you just get so frustrated about things that are wrong. These are the things that drive you, and you’re not going to stop until things are resolved.”

The case was in response to deceptive sales practices by Merck that flooded hospitals with the drugs Vioxx, Zocor, and Pepcid at heavily discounted prices in exchange for prescribing the medications for as many as three-quarters of eligible patients or being placed on a list of preferred medications. Many patients that rely on Medicaid were initially given prescriptions by hospitals at the cut-rate prices, only to have Medicaid foot the ongoing prescription cost at full price. This practice allowed Merck to gain advantage over its competitors making generic versions of the drugs in question. The practice also was in direct contradiction of the law that requires that pricing for the government be no more than for other customers.

The practice of gouging Medicaid for prescriptions which were written by doctors at hospitals given discounted pricing has been often called in to question recently. Many believe that dozens of drug companies may be guilty of this type of fraud. This case confirms that there are brave whistleblowers that are willing to take a stand and stop the taxpayer waste by drug companies.

If you are seeing Medicaid or other fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

The hospital system improperly increased charges to Medicare patients to obtain higher Medicare reimbursement from the federal government. The whistleblowers helped the federal government with the evidence that Cathedral had wrongfully increased charges for both inpatient and outpatient care of Medicare patients, illegally obtaining higher “outlier” type payments from Medicare than the hospital system was entitled to receive.

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.

Bunny referred to the mismanagement of these matters as “the most blatant and improper contract abuse I have witnessed during the course of my professional career.”

From The Washington Post:

Bunny Greenhouse was once the perfect bureaucrat, an insider, the top procurement official at the U.S. Army Corps of Engineers. Then the 61-year-old Greenhouse lost her $137,000-a-year post after questioning the plump contracts awarded to Halliburton in the run-up to the war in Iraq. It has made her easy to love for some, easy to loathe for others, but it has not made her easy to know.

In late August, she was demoted, her pay cut and her authority stripped. Her former bosses say it’s because of a years-long bout of poor work habits; she and her lawyer say it’s payback for her revelations about a politically connected company.

Now Bunnatine Hayes Greenhouse is becoming one of the most unusual things known in the upper echelons of government and industry — a top-shelf bureaucrat who is telling all she knows. For honesty’s sake, she says.

Read the rest of the story.

THURSDAY, NOVEMBER 30, 2006

WASHINGTON – Larkin Community Hospital in Miami and its current and former owners, Dr. Jack Michel, Dr. James Desnick, Morris Esformes and Philip Esformes, have paid $15.4 million to settle federal and Florida civil health care fraud claims against them, the Justice Department announced today. Additionally, 34 related companies owned by the Esformes that were used to operate nine assisted living facilities are part of the settlement along with Claudia Pace, an employee of one of the Esformes-owned companies; and Frank Palacios, a long-time employee of the hospital.

The settlement resolves the civil case entitled United States v. Jack Jacobo Michel, M.D., et al., which the government filed in 2004, alleging violations of the False Claims Act. The state of Florida joined the suit later that year.

The government alleged that in 1997, Larkin, then owned by Desnick, paid kickbacks to physicians in return for patient admissions. The United States contended that the primary recipient of the kickbacks was Jack Michel, who was paid for patient admissions to Larkin by himself and his brother, Dr. George Michel. Jack Michel purchased Larkin in 1998. In 2000, Desnick was a party to a $14 million settlement with the United States for a similar kickback scheme from 1992 to 2000 at another facility he owned, Doctors Hospital of Hyde Park in Chicago.

The United States also alleged in the Michel suit that from 1998 to 1999, Jack Michel, George Michel, Morris Esformes, Philip Esformes, Frank Palacios and Claudia Pace conspired to admit patients to Larkin for medically unnecessary treatment. The government asserted that some of these patients came from assisted living facilities owned and operated by Jack Michel, Morris Esformes and Philip Esformes.

“The Department of Justice is committed to vigorously litigating cases about conduct that undermines the integrity of the Medicare and Medicaid programs,” said Peter D. Keisler, Assistant Attorney General for the Department’s Civil Division. “We will not tolerate health care providers who pay kickbacks or perform medically unnecessary treatments on elderly beneficiaries in order to generate Medicare and Medicaid payments.”

The case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; and the Florida Medicaid Fraud Control Unit. The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Florida in Miami and the Office of the Attorney General of the state of Florida.

Over the course of his distinguished career as an auditor for the Interior Department, he recovered hundreds of millions of dollars from oil companies that were routinely and consistently underreporting royalty payments to the federal government. He was so successful at making the oil companies toe the line that he was eventually promoted to a position where he was supervising 120 people.

You’d think that someone who had been praised by the Secretary of the Interior as recently as 2003 for their outstanding job performance and leadership skills would have at least a little job security, but Bobby Maxwell recently found out that this isn’t always the case.

You see, Mr. Maxwell may have been fantastic at his job, and it would seem that he was trying to do the right thing by saving the government money, but it turns out that he recently may have stepped on a few toes by blowing the whistle on an oil company who has been accused of defrauding the government of millions of dollars. And, exactly one week after the lawsuit he is involved in became public knowledge, he was informed that his job was being eliminated in a “reorganization”.

The lawsuit, filed by Mr. Maxwell against the Kerr-McGee Corporation, accuses them of cheating the government out of millions of dollars in royalty payments. The Kerr-McGee Corporation is supposed to pay royalties for the oil that they pump out of public lands, and Bobby Maxwell was disappointed after reporting these underpayments and alleged fraudulent activities to the Interior Department. The Department did nothing.

So Bobby Maxwell decided to take matters into his own hands. He took the evidence that he had accumulated over the course of his investigations to his attorneys, and they filed suit against the Kerr-McGee Corporation in June 2004. The case was unsealed (became public knowledge) in January of 2005; a week later, he was informed that his position had been eliminated.

These are the risks that whistle-blowers are faced with in this modern age. By rocking the boat, Bobby knew that he was putting his career at risk. Even though there are ways to minimize the dangers involved in coming forward with their stories, whistle-blowers are sometimes caught in situations in which there are no easy answers. There is a tremendous amount of pressure by employers, even the Federal government, to prevent employees from becoming involved in lawsuits. But even though Bobby Maxwell was simply trying to save the government money, and trying to get Kerr-McGee Corporation to pay their fair share of what was owed, he still suffered by losing his job.

However, he knew the stakes, and although the risks were high, the reward is possibly even greater. If Bobby Maxwell eventually wins his case against the Kerr-McGee Corporation, the Federal Government will receive the majority of the money recovered – that’s how the False Claims Act works – but he will also collect a portion of the money recovered. Private citizens like Bobby Maxwell can sue under the False Claims Act on behalf of the government, which gives whistleblowers and people who have observed fraud against the government the means to reclaim money from the guilty party.

Because it is so difficult to successfully follow cases such as this one through the court system, and because it takes a large amount of time and effort, not to mention legal talent and expert witness fees, the False Claims Act has special provisions that generously reward the private citizen who has gone to such great lengths to stop these types of fraud from taking place. In Bobby Maxwell’s case, the stakes are enormous: Kerr-McGee Corporation could be forced to pay over $50 million dollars in penalties and unpaid royalties.

And, if he wins this case against Kerr-McGee and recovers that money for the government, the Federal False Claims Act states that these heroic citizens should share in the reward for their noble efforts: Bobby Maxwell would be eligible to keep up to 30 percent of the money recovered. That’s somewhere in the neighborhood of $16 million dollars! Of course, a portion of that money will then be used to cover his court fees, legal fees, and expert witness fees, but even so, by being brave enough to come forward and take a stand against Kerr-McGee, Bobby Maxwell stands to be amply rewarded for his trouble.

Would you be that brave, if you knew of fraud against the government? Would you take a stand, even though the risks were so great? I’d like to think that I would, but I’m not sure if I have the guts to be one of the Bobby Maxwell’s of this world.

If you or someone you know has witnessed fraud against the government, and you would like more information about how you can help stop these activities which costs taxpayers millions of dollars per year, please contact us for more information.

- Robert P. Christensen

www.rpcmnlaw.com