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Allergen Pleads Guilty to Misbranding Charges of Botox

2010-09-01T19:28:57-05:00

The Department of Justice announced that Allergen Inc. will pay $600 million to resolve a federal probe of how it has marketed Botox, the injectable wrinkle smoother. The company will plead guilty to a single misdemeanor that it misbranded the drug during the period of 2000-2005, making claims for uses not then approved as safe and effective by the FDA. These included “off label” treatments of headaches, pain, spasticity, and juvenile cerebral palsy. At the time, Botox had only been approved for treating various muscle contractions, crossed eyes, and excessive sweating. The DOJ accused Allergan of promoting Botox for therapeutic uses not approved by the FDA, paying kickbacks to encourage doctors to prescribe it and teaching them how to bill for off-label uses. The resolution includes a criminal fine and forfeiture totaling $375 million. As part of the civil settlement, Allergan has agreed to pay an additional $225 million to the federal government and the states to resolve claims that its unlawful marketing practices caused false claims to be submitted to government health care programs. As part of today’s resolution, the five whistleblowers who brought the charges to the government’s attention will receive $37.8 million from the federal share of the settlement amount. Click to read an article about this, “Allergan to pay $600 million to settle Botox probe.”

Hewlett-Packard Settles Whistleblower Lawsuit for $55 Million

2010-09-01T14:51:31-05:00

The Justice Department announced that technology giant Hewlett-Packard will pay $55 million to settle claims that it paid kickbacks to systems integrators who recommended agencies buy HP products. In addition, the claim also resolves claims that HP’s 2002 contract with the GSA was defectively priced. HP is one of a growing number of companies who are settling with the government or facing charges of violating the False Claims Act. They are the fourth of five companies to settle in allegations made by whistleblowers Norman Rille and Neal Roberts, who are entitled to a share of the recovery monies. Rille and Roberts claimed that IBM, CSC, PWC, and Accenture received “influencer fees” for promoting HP products; only Accenture has not yet settled. Click to read the entire article, “HP settles whistleblower lawsuit for $55 million.”

Student Loan Company Nelnet Pays $55-Million Settlement

2010-09-01T12:39:28-05:00

Nebraska-based Nelnet will pay the federal government a settlement of $55 million to resolve a quitam lawsuit brought against it and other educational lenders. The lenders, who include the nation’s largest student-loan company, Sallie Mae, are accused of defrauding taxpayers of more than a billion dollars in student-loan subsidies. The lawsuit was brought by Jon H. Oberg, a former Education Department researcher, on behalf of the federal government. Seven years ago he discovered that Nelnet and other lenders were exploiting a loophole in a program that guaranteed a 9.5 percent return on certain loans. This guarantee was made in the 1980s when Congress provided nonprofit lenders this rate of return as protection against a down economy. However, despite Congress having eliminating that guarantee in 1993, many loan companies claimed that government regulations allowed them to continue to receive the 9.5 percent return in a practice known as “recycling” - using the returns backed by the old loans to make new ones. Click here to read the full article, “Nelnet to Pay $55-Million to Resolve Whistle-Blower Lawsuit.”

Source of Navigation Equipment Violates Trade Agreements Act; $695,063 Quitam Settlement Reached

2010-08-31T16:29:23-05:00

The US Department of Justice and Furuno USA Inc. reached a $695,063 settlement in a quitam lawsuit over the purchase of electronic navigation equipment. The navigation equipment was purchased by the US Coast Guard, US Navy and the General Services Administration. The equipment was manufactured in China, even after Furuno USA was advised by the government that the Trade Agreements Act prohibited its manufacture in that country. Of the $695,063 settlement, $158,864 will be paid to the private whistleblower who alerted the U.S. that the equipment was Chinese. Click here to read the full article, “US reach $695,000 settlement with Furuno USA in dispute over navigation equipment.”

Teva Pharmaceutical Settles Medicaid Fraud Claim

2010-08-09T17:30:07-05:00

Israeli-based generic drug company Teva Pharmaceuticals agreed to pay $27 million to resolve Medicaid fraud claims. The settlement addresses allegations that the company set and reported inflated prices for medications dispensed in Florida pharmacies, who then received reimbursement by the state Medicaid program.

Florida Attorney General Bill McCollum claimed that by reporting inflated prices, Teva caused Medicaid to overpay millions of dollars. The Florida Agency for Health Care Administration, which administers the Medicaid program, will receive more than $7.1 million; the remaining funds will be remitted to the federal government and to the whistleblower, Ven-A-Care of the Florida Keys.

Click here to read the full article, “Teva settles Medicaid fraud claim for $27M.”

New Laws Provide Substantial Rewards to Whistleblowers for Reporting Fraud on Wall Street

2010-08-09T17:25:49-05:00

The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law last month contains new laws rewarding whistleblowers who report securities and commodities fraud. The rewards can range anywhere from 10% to 30% of any sanctions exceeding $1 million (including penalties, disgorgement and restitution) arising from a judicial or administrative action brought under the securities laws or Commodity Exchange Act. Whistleblowers may file for an award anonymously, provided they are represented by counsel, but the person must reveal their identity to the Commission in order to receive an award.

The Act requires the Commission to preserve the confidentiality of information provided by whistleblowers and their identity. The Act also allows whistleblowers to bring an action for retaliation by employers for either reporting fraud to the Commission or assisting an investigation conducted by the Commission. The employee may sue for reinstatement, back pay and attorneys’ fees.

Click here to read the full article, “Tip-off law set to spark bounty hunts.”

Advanced BioNutrition Pays $934,000 to Settle Whistleblower Allegations

2010-07-16T19:43:49-05:00

Advanced BioNutrition Corporation ("BioNutrition"), a Columbia biotech company, and its chief executive officer, David Kyle, paid the U.S. government $934,000 to resolve allegations that its officials submitted inaccurate grant progress reports to government research funds and thereby violated the False Claims Act.

In 2005, BioNutrition was awarded the first phase of a National Science Foundation Small Business Innovation Research grant to develop probiotic bacteria encapsulating technology. In 2006 the company was awarded the second phase of funding based on another proposal which detailed results obtained during its first phase of research. Allegedly, BioNutrition misrepresented and omitted critical information about its initial research results, and made further misrepresentations in final reports about its progress during the second phase of work.

In addition to the monetary component of the settlement, the company has agreed to a five-year Compliance Integrity Agreement, and Mr. Kyle agreed to be excluded from all federal procurement programs for five years.

The settlement resolves a qui tam lawsuit brought by whistleblower Albert Cunniff, Jr. Mr. Cunniff will receive $105,275 out of the recovery.

Click here to read the full article, “Columbia biotech pays $934,000 to settle false claims suit"

Benchmark Rehabilitation Reaches Settlement with Tennessee Attorney General

2010-07-16T19:42:24-05:00

Benchmark Rehabilitation Partners LLC ("Benchmark") reached a $1.8 million settlement agreement with Tennessee Attorney General Robert Cooper to resolve allegations that it improperly billed the Medicare, TennCare and Medicaid programs.

According to the state and federal government, Benchmark submitted claims to Medicaid for therapeutic exercise services from 2001-2006. However, records show that patients actually underwent aquatic therapy during this time which is restricted by Medicaid reimbursement rules.

In submitting claims for physical therapy services that were not considered reimbursable under the Medicaid program regulations, the business allegedly violated the federal False Claims Act and the Tennessee Medicaid False Claims Act. Benchmark, however, denies any wrongdoing.

Under terms of the settlement, the state will receive $190,977 and the federal government will receive $1,625,489.

Click here to read the full article, “Feds, Cooper Join Forces for Settlement"

University of Chicago Hospital Pays $7 Million to Settle Whistleblower Case

2010-07-06T17:13:23-05:00

The University of Chicago Medical Center has agreed to pay $7 million to resolve allegations that it overcrowded its neonatal intensive care unit ("NICU"), thereby exposing infants to a risk of infection.

The medical center said that it exceeded capacity in order to help as many infants as possible, that no babies were harmed, and that the practice ended in 2005. However, Illinois Attorney General Lisa Madigan filed a case in 2006 claiming that the hospital’s practice of “double bunking” put newborns at risk of infection and violated health regulation.

Of the settlement, $5.1 million will go to neighborhood clinics that provide health services for poor expectant mothers in Chicago’s South Side and $500,000 will go to the Centers for Medicare and Medicaid.

Ms. Madigan’s office was notified about this situation by two former nurses at the medical center. The whistleblowers will share $1.4 million of the settlement.

Click here to read the full article, “University of Chicago hospital pays $7M to settle suit over NICU crowding"

Northrop Grumman to Pay $12.5 Million in False Claims Settlement; Whistleblower Awarded $2.4 Million

2010-06-30T20:14:28-05:00

Northrop Grumman Corp. agreed to pay the federal government $12.5 million to settle allegations that the company caused false claims to be submitted to the government.

Allegedly, Northrop Grumman’s Navigation Systems Division failed to test electronic components it supplied for military airplane, helicopter and submarine navigation systems to ensure that the parts would function at the extreme temperatures required for military and space uses.

This case was filed under the qui tam provisions of the federal False Claims Act by whistleblower Allen Davis, a former quality assurance manager at Northrop Grumman’s Navigation Systems Division facility in Salt Lake City. Mr. Davis will receive $2.4 million out of the settlement.

Click here to read the full article, “Northrop Settles Gov’t Lawsuit for $12.5M"