On October 7, 2014, the U.S. Department of Justice settled a case against DRS Technical Services, Inc. (“DRS”), a defense contractor, regarding allegations of fraudulent billing for $13.7 million.
Thanks to the efforts of two whistleblowers, or relators, the U.S. Department of Justice and eight states announced on October 10, 2014 that they had settled allegations of fraudulent billing against Extendicare Health Services, Inc. (“Extendicare) and its subsidiary Progressive Step Corporation (“ProStep”). The U.S. government and the several states involved in the investigation alleged that Extendicare billed both Medicare and Medicaid for nursing services that were so deficient as to be worthless to the government and the patients.
Pietragallo Gordon Alfano Bosick & Raspanti, LLP is pleased to announce the election of its newest partner, Pamela Coyle Brecht, in its downtown Philadelphia office. Ms. Brecht is an active member of the firm’s national Qui Tam Practice Group.
In early August, a federal jury found Gosselin World Wide Moving NV and its executive Mark Smet liable for submitting false claims in 2001 and 2002 to the U.S. government to the tune of $33.6 million, which, when trebled per the federal False Claims Act, rises to $100.8 million.
Shire Pharmaceuticals, LLC, a pharmaceuticals company based in Pennsylvania, recently signed a settlement agreement with the Department of Justice to resolve False Claims Act allegations related to its promotion practices of several drugs. Shire, which both manufactures and sells pharmaceuticals used in treating attention deficit hyperactivity disorder (ADHD), was facing allegations that it violated the False Claims Act beginning in 2004.
At a speech last week, IRS Commissioner John Koskinen announced changes aimed at creating better relations between whistleblowers and the IRS’s whistleblower program. The changes include a 70% increase in staff at the IRS whistleblower office – 31 new employees – to handle whistleblower filings. Mr. Koskinen’s remarks follow new whistleblower regulations designed to provide more information to whistleblowers with pending claims and pay more money to those with substantiated cases.
The Eighth Circuit had previously stated that one who files a lawsuit under the False Claims Act must provide examples of the allegedly fraudulent conduct. Last week, the court seemed to back away from this position in United States ex. rel. Thayer v.
The First Circuit Court of Appeals recently held that False Claims Act defendants can deduct portions of their civil settlement payments if the parties have not, in negotiating a settlement, agreed to the tax consequences and the payment is considered compensatory as opposed to punitive.
The New York Times published an article noting that, despite huge investments in preventing Medicare fraud—up to $600 million a year—fraud against the program persists to the tune of $60 billion, which is equivalent to 10% of Medicare’s cost. For example, last year, the federal government was only able to recover $4.3 billion.
U.S. Magistrate Judge Daniel G. Martin of the Northern District of Illinois recently issued an opinion that sanctioned a defense attorney for badgering a whistleblower during her deposition. The ruling serves as a reminder to potential whistleblowers of the difficulties in coming forward with evidence of fraud but also that the courts can be approached to ensure fairness in such litigation.
If you are aware of any person, corporation or entity that you think may be violating the Federal False Claims Act or a State False Claims Act, contact us today.