 Drug Lobbyists
Thick as Ticks
USA Today's Jim Drinkard reports
that: "Since 1998, drug
companies have spent $758 million on lobbying — more than any other
industry. In Washington, the industry has 1,274 lobbyists — more
than two for every member of Congress. 'They are powerful,'
says Sen. Chuck Grassley, R-Iowa, chairman of the Senate Finance
Committee. 'You can hardly swing a cat by the tail in that town
without hitting a pharmaceutical lobbyist.'" >>
To read more
|
 PharMerica
Fraud
PharMerica has agreed to pay the Federal Government
$5.98 million to
settle a False Claims Act lawsuit alleging violations of the
Medicare anti-kickback statute in connection with PharMerica's
purchase of a Virginia long-term care pharmacy. The pharmacy was
open for a single day before being sold and closed. |
 Follow
The Money
Newsweek
reports that former CPA senior adviser Franklin Willis is
worried that the DoJ's reluctance to prosecute fraud in Iraq may
turn Iraq into a "free-fraud zone." Transparency International
notes that just $4.1 billion of the $18.7 billion appropriated
by Congress for Iraq has been spent so far, and that "If urgent
steps are not taken, Iraq... will become the biggest corruption
scandal in history." Sen. Charles Grassley adds that if the
government decides the False Claims Act doesn't apply to Iraq,
"any recovery for fraud, waste and abuse of taxpayer dollars...
would be prohibited." >>
To read more |
 TAF
& NELA File Supreme Court Amicus
Taxpayers Against Fraud and
the National Employment Lawyers Association have filed an
amicus curiae brief in support of the respondents in
Graham County Soil & Water Conservation District v. U.S. ex rel.
Wilson. The case deals with Statute of Limitations for
FCA Retaliation Claims. >>
To
read more
|
 Rolling
Bombs on the Road?
The U.S. Government and
its contractors -- including the Defense
Department, the Energy Department and the Tennessee
Valley Authority -- operate hundreds of truck trailers
with cylinders that transport such pressurized gases
such as hydrogen, oxygen, helium, air, methane, hydrogen
chloride and nitrogen. One of the companies that
was supposed to pressure test those cylinders to make
sure they were safe did not even have the equipment to
do the job! Nonetheless, the Texas company billed
the Government millions of dollars and was only found
out because a whistleblower came forward. The
case against
Western
Sales and Testing of Amarillo, BKC Industries of North
Carolina, and Portersville Sales and Testing of
Pennsylvania was settled for $3 million,
though
annual payments, based
on false claims, to Western Sales and other firms ranged
from $12 million to $48 million. >>
To read
more
|
 FL
Sues Tenet for $1 Billion Under RICO; DoJ False Claims Act Case
Unresolved
Florida has sued Tenet Healthcare
under the state's Racketeer Influenced Corrupt
Organizations Act, claiming the company illegally
boosted "outlier" claims to Medicare,
thereby stealing money from publicly supported
hospitals. Florida Attorney General Charles Crist notes that "Tenet
has reached the pinnacle of corporate wrongdoing,
with ongoing criminal activity spanning at least
14 years." The DoJ
started an investigating into Tenet's outlier
frauds two years ago, but the case remains
unresolved. >> To read more
|
 Forbes
on the False Claims Act
"If the Senate ... is really determined to
ferret out fraud, it should follow the False
Claims Act model." >> To read more
|
 Defective
Mice May Nullify Research
A leading
supplier of genetically pure laboratory mice and
rats has agreed to pay the federal government
$7.2 million for knowingly selling genetically
contaminated stock. The mice were among the most
commonly used research rodents in the world, and
sold for over $7 apiece. Vast amounts of health
care research may now have be tossed out as a
consequence, resulting in untold millions of
dollars of lost research and time. This is
the third time in the last 10 years that Harlan,
Sprague, Dawley Inc. has had to pay costs or
damages for research compromised by genetic
deficiencies in their widely used rats and mice.
>> To read more
|
 Tenet
Case To Be Retried
DoJ
prosecutors say they will retry Tenet Healthcare,
the second-largest U.S. hospital chain in the
U.S., following a hung jury on criminal charges
that Tenet's Dan Diego unit paid doctors for
referrals. U.S. District Judge James Lorenz
in San Diego has scheduled the retrial for March
29. >> To read more
|
 Burying
the Story?
Omission or commission? That's a
question often asked when it comes to DoJ's
failure to publicize False Claims Act cases. DoJ
does not maintain an annual list of recoveries by
case, much less settlement agreements or
complaints. Relators and their counsel are rarely
mentioned. Is press silence a negotiating point
during settlement negotiations? That's a question
Corporate Crime Reporter asked one
Assistant U.S. Attorney handling the $49.2 million
Novartis settlement. The answer:
“That’s not something I can comment
on.” >> To read more
|
 DoJ:
Between Iraq and a Fraud Case?
When
a 9-month old company without guns, accountants
or guards got a large contract to guard the
Baghdad airport, eyebrows should have been
raised. When that same company went from a $1
million portfolio to a $100 million portfolio
over the course of 13 months, accountants should
have been called. Now the U.S. military has
banned Custer Battles from future contracts, and
a False Claims Act case has been filed, but the
U.S. Department of Justice is having having a
hard time figuring out if they are going to be
players in the case. Custer Battles' defense
attorney argues that if fraud occurred, it was not fraud
against the U.S. Government, but fraud
against the Coalition Provisional Authority which
was operating as the Government of Iraq. But, as
George Washington University professor Steven L. Schooner notes,
"It's not a very attractive
position to say, 'If you stole U.S. money, you're
liable. But if you stole Iraqi money, the U.S.
government just doesn't care,'" especially
when the people in charge were U.S. Government
officials signing U.S. Government forms and
paying out American cash in U.S. Treasury-sealed
packets to U.S.-based contractors.
. . Sen. Charles E. Grassley
(R-Iowa) has sent a letter to Attorney General
Alberto R. Gonzales about the Custer Battles
case, noting that "If the [False Claims Act]
is found not to apply to any contract entered
into by the CPA, any recovery for fraud, waste
and abuse of taxpayer dollars under the [act]
would be prohibited." Grassley warned
Gonzales of "the potential danger that a
negative precedent in this matter would
create."
. . In an unrelated
development, NBC News reports that four former
Custer Battles employees say they watched as innocent
Iraqi civilians were fired upon, and one crushed
by a truck, during Custer Battles operations in
Iraq. The Army is looking into the allegations.
>>
To
read the Custer-Battles complaint
>> To
read an internal Custer-Battles memo
that says Custer Battles' own documents "are
prima facie evidence of a course of conduct
consistent with criminal activity and
intent."
>>
To
read more about
the story
|
 OPI
to Pay Nearly $50 Million
OPI, a subsidiary of Novartis, has
agreed to pay nearly $50 million in criminal and
civil fines to settle claims it violated
Medicare's anti-kickback rules. OPI was nailed as part of
an 18-month sting, dubbed "Operation
Headwaters," in which the Feds set up a fake
company buying medical goods. OPI will pay a
criminal fine of $4.5 million and a civil penalty
of $44.6 million. Operation Headwater cases have
brought in more than $670 million in fines. >> To read
|
 Friends of TAF
Education Fund
Without help from our friends in the
relators’ bar, and grateful whistleblowers,
the TAF Education Fund could not continue to
perform the important work of supporting
whistleblowers and educating the public about the
False Claims Act. It is therefore with deep
appreciation that we thank our contributors for
their generosity, support, and leadership in
2004. >> Click here
|
 Repeal
Medicaid Best Price?
The Bush Administration has said it
wants to "amend" the Medicare drug
rebate formula by getting rid of current best
price requirement, but the vague language from
the White House seems to acknowledge that the
real purpose is to allow "private purchasers
to negotiate lower drug prices" without
giving Medicaid the same benefit. Notes TAF
President Jim Moorman, "The notion that the
Federal Government -- the largest purchaser of
prescription drugs in the country -- should pay
more than Wal-mart is absurd, but that will be
the result, and at a time when we need to control
Medicaid costs." >> To read the White House / OMB
budget language
|
 Medicare
Billed for Faith Hill
HealthSouth Corp. billed Medicare
for performances by Faith Hill, Reba McIntire,
Alabama, K.C. and the Sunshine Band, and Amy
Grant. Expensive entertainment was a regular
feature of HealthSouth annual meetings held in
Orlando every year. The cost of entertainment was
lumped into "home
office cost statements," submitted to
Medicare for payment. >> To read more
|
 FY
2003 HCFAC Report Published
The Department of Health and Human Services has
released the FY 2003 Health Care Fraud and Abuse
Control Program report. Among the highlights:
n The Federal government
won or negotiated more than $1.8 billion in
judgments and settlements in health care fraud
matters.
n The were 1,277 civil
matters health care cases pending in FY 2003, and
231 civil cases filed.
n Over $269 million was
paid out to relators for their assistance in
health care fraud recoveries. >> For more information
|
 FIU to Pay $11.5
Million
Florida
International University (FIU) has agreed to pay
$11.5 million to settle allegations that it
mischarged costs and overbilled under several
contracts and grants with the Department of
Energy. The contracts and grants dealt with
testing and developing environmental
technologies. >> To read press release
|
 FY
2005 Recoveries Start with a Bang
Over $730,000,000 in False Claims
settlements and judgments were won in the first
three months of Fiscal Year 2005 with scores of
millions more levied in criminal sanctions.
Notes Jim Moorman, President of
Taxpayers Against Fraud: "The False Claims
Act remains the most important tool taxpayers
have to recover the billions of dollars stolen
from the government through fraud every
year." To read summaries of the top 10 cases
of first quarter FY 2005 >> click
here.
The Top Ten Cases of the First Quarter of
2005
| Company |
Paid
for FCA charges |
Type
of Fraud |
| Gambro |
$325.5
million |
Medicare |
| HealthSouth |
$325
million |
Medicare |
| PolyMedica |
$35
million |
Medicare |
| Gold
Banc |
$16
million |
Banking |
| Inter-Tel
Technologies |
$7.0
million |
E-Rate
/ School |
| UnitedHealthcare |
$3.5
million |
Medicare |
| McKesson
Corp |
$3.4
million |
Medicare |
| Diebold
|
$2.6
million |
Voting
machine |
| Loma
Linda University |
$2.2
million |
Medicare |
| Maxwell
Manor |
$1.6
million
|
Medicaid/Medicare
|
|
 New
Chicago False Claims Act
Rocked by recent scandals, the Chicago
City Council has adopted a municipal False Claims
Act to empowers citizens to file taxpayer
lawsuits against those who defraud City
government. Under the ordinance, whistleblowers
can recoup up to triple damages for the City,
while wininng up to a 30 percent relator's
share. The Chicago ordinance is based on the
federal False Claims Act >> To
read the law|
|
 Calif.
Requires Pharma. Compliance California
Governor Arnold Schwarzenegger has signed into
law S.B. 1765, which requires pharmaceutical
companies to implement a "comprehensive
compliance program" by July 1, 2005. The law
converts formerly suggested standards of practice
(HHS OIG and PhRMA), into legally binding
standards, but enforcement and penalties are
unaddressed. >> To
read the new law
|
 TAP
to Pay $150 M More
TAP Pharmaceutical Products Inc. has
agreed to pay $150 million to settle insurance
company and patient lawsuits related to the
pricing and marketing of its prostate-cancer drug
Lupron. TAP paid a record $885 million in 2001,
and pleaded guilty to a criminal charge. With the
new payout, TAP's Lupron settlements now total
more than $1 billion. >>
To
read more
|
 Bill
Would Require Fraud Reports
A bill (S. 3018) has been introduced by
Sen. Grassley that would "direct the
Inspector General of the Dept. of Justice to
submit semi-annual reports regarding settlements
relating to false claims and fraud against the
Federal Government." Items to be reported on
include the amount of actual damages estimated to
have been sustained.
>> Read
the legislation
>> Read
Sen. Grassley's statement
|
 Faked
Research Kills
DoJ
has reached a settlement with the University of
Pennsylvania over a gene therapy study that ended
with the death of an Arizona teenager. U. of
Penn. researchers lied to the federal agencies
about tests that showed toxicities in test
subjects. Jesse Gelsinger died as a result. The
DoJ settlement is described as "a model
enforcement action" because it includes
ndividual researchers as well as research
institutions. >> To read the DoJ press release on
the settlement (PDF)
|
 Settlements
and CIAs
nTAF
has collected a sampling of recent False Claims
Act settlements. >> Click
here
nCorporate
Integrity Agreements (CIAs) and settlement
agreements with integrity provisions are now on
line with the Office of the Inspector General of
HHS >> Click
here
|
