Wednesday, October 12, 2005
Michigan Legislature Approves Whistleblower Law to Stop Medicaid Fraud
Whistleblowers could sue a Medicaid provider on the state’s behalf to fight fraud under legislation approved Wednesday by the Michigan House. According to provisions in the bill, the state attorney general could intervene in the lawsuit, and the person filing suit could receive up to 30 percent of a settlement. The chamber voted 106-2 to send the bill to the Senate.
Fraud costs the state between 3 percent and 10 percent of its annual $8 billion Medicaid budget, which covers health care costs for more than 1.4 million low-income children, seniors, pregnant women and the disabled, according to testimony given to the House Judiciary Committee. The bill, pushed by Attorney General Mike Cox, would let any person file a civil suit in the state’s name to recover losses from Medicaid fraud. An employer would be barred from firing, demoting, suspending or threatening an employee because he or she had sued or cooperated in a fraud investigation.
The following link contains the enitre Associated Press story on the whistleblower bill from the Detroit Free Press.
Posted by Quitam Help Admin on 10/12 at 08:30 AM
Tuesday, October 11, 2005
Corporations to Pay $24.75 Million for Defrauding Amtrak
A group of engineering and construction corporations will pay the United States $24.75 million to settle allegations they violated the False Claims Act by overbilling Amtrak. Federal prosecutors alleged that the companies knowingly submitted inflated claims on Amtrak’s project to electrify the rail corridor between New Haven and Boston.
The corporations are: Balfour Beatty Construction; Massachusetts Electric Construction Company; their joint venture BBC-MEC; J. F. White Contracting Company; and Northeast Corridor Foundations, a joint venture between J.F. White and BBC-MEC.
The companies are alleged to have overcharged Amtrak for the installation of an overhead system used to deliver electricity to locomotives. Prosecutors alleged that the companies inflated claims regarding the foundations for the poles, the electrical power system, and for delay and disruption of the overall project. The full account of this false claims act story appeared in corporatecrimereporter.com.
Posted by Quitam Help Admin on 10/11 at 12:35 PM
Wednesday, October 05, 2005
Whistleblowers Win Settlement 16 Years After Suing
An article in the October issue of Chicago Lawyer tells of a qui tam lawsuit that resulted in a $134 million settlement in March 2005, 16 years after it was initiated by two defense contractor employees. The two men worked for Northrup Grumman Corp. and accused their employer of defrauding the Pentagon. The settlement is believed to be the largest false-claims settlement ever negotiated by the U.S. Attorney’s Office for the Northern District of Illinois.
Libby Sander, the author of the article, wrote: “[T]he case had all the elements of a white-collar crime thriller, and a bit of David and Goliath as well: A defense contractor developing top-secret weaponry at the close of the Cold War, allegations of massive accounting fraud and more than a decade of legal wrangling between two low-level employees and a powerful Fortune 500 company …”
Ms. Sander wrote: “Rex A. Robinson and James H. Holzrichter, the two plaintiffs, worked at Northrop’s Defense Systems Division in Rolling Meadows, where Robinson was a test engineer and Holzrichter an internal auditor.
“Between them, the two men allegedly observed double sets of accounting books; saw a flawed accounting system unable to track materials purchased from vendors and billed to the government; and overheard conversations of engineers claiming they “faked” tests of new technology and lied to the Pentagon about progress they had made on it, said Miller and Michael I. Behn, a former Futterman & Howard lawyer who was the other lead attorney on the case.
“Both Northrop employees went to their supervisors. “Robinson and Holzrichter were not marching-in-the-streets kind of guys,” Behn said. “They were both suburban dads. They were Vietnam-era vets living a suburban life. When they found this stuff, they didn’t immediately go to the government; they went to their boss.”
“After taking their observations higher and higher up the chain of command at the facility, both men ultimately hit a brick wall. Robinson was fired in 1988; Holzrichter was forced out a year later.
“Neither man ever recovered, attorneys said. Both were homeless for a period of time. Robinson died before the case was resolved, “penniless,” in a trailer “somewhere out West,” the attorneys said. And the best job Holzrichter was able to secure was a position supervising a newspaper delivery route.
“Of the $134 million, Holzrichter, along with Robinson’s estate (he is deceased), received a total of $ 12.4 million, or about 20 percent of the settlement claims.” (Editor’s note: there is no Web link available to the full account of this story.)
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Posted by Quitam Help Admin on 10/05 at 09:15 AM