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SmithKline Beecham Clinical Laboratories, Inc. pays $334 million in a historic settlement

SmithKline Beecham Clinical Laboratories, Inc. paid the government more than $334 million to settle allegations that its clinical laboratory division defrauded Medicare, Medicaid, and other federally funded health insurance programs. This historic settlement was the result of a joint effort between the government and “whistleblowers,” including Robert J. Merena, a former employee of SmithKline’s National Billing System. The SmithKline settlement is one of the largest whistleblower assisted recoveries in the history of the United States.

Robert J. Merena, a resident of Berks County, Pennsylvania, was the first of three private citizens whose whistleblower claims led to the SmithKline settlement. Mr. Merena filed his suit “under seal” on November 12, 1993, in the United States District Court for the Eastern District of Pennsylvania. For nine years, Mr. Merena worked for SmithKline’s National Billing System, which was responsible for approximately three-fourths of SmithKline’s clinical laboratory billings nationwide. In the course of his job, Mr. Merena became aware of a number of questionable billing practices at SmithKline. Unable to resolve his concerns internally within SmithKline, Mr. Merena retained Marc S. Raspanti, Esquire and David M. Laigaie, Esquire. For three years after he filed his suit, Mr. Merena actively assisted the government’s investigation and spent hundreds of hours working with the government task force assembled in Philadelphia that investigated the allegations against SmithKline.

The value of Mr. Merena’s and two other relators’ assistance to the government became apparent in February 1998, when Senior Judge VanArtsdalen of the United States District Court for the Eastern District of Pennsylvania granted partial summary judgment in the amount of $9.7 million to Mr. Merena. This amount reflects 15% of an undisputed sum to which the government agreed Mr. Merena was entitled. In April 1998, after seven days of hearings, Judge VanArtsdalen ordered the government to pay Mr. Merena and two other relators an additional $42.3 million, recognizing that they substantially assisted the government in reaching its settlement with SmithKline. The total award, $52 million, is the largest whistleblower award to date.

For more information about the False Claims Act and whistleblower cases, we invite you to visit the False Claims Act Resource Center at www.falseclaimsact.com.

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Representing Whistleblowers

The lawyers in the national qui tam whistleblower practice of Pietragallo Gordon Alfano Bosick & Raspanti have proven, battle tested experience fighting for whistleblowers in federal and state false claims cases. The False Claims Act Practice Group, which includes four former federal and state prosecutors and two certified fraud examiners, has:

  • Recovered nearly $2 billion for federal and state taxpayers
  • More than 30 years combined experience representing whistleblowers
  • Fought some of the most complex cases brought under federal and state false claims acts
  • Litigated against some of the largest companies in the United States
  • Handled cases in federal and state courts across the United States

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