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		Ronald Reagan (1911-2004) on the FCA President Reagan was a strong supporter of the False Claims Act. On Feburary 6, 1986 he sent a post-State of the Union message to Congress noting: "Our Administration will continue to investigate and prosecute fraud and other economic, or 'white collar,' crimes. Congress can support improved enforcement in this area by completing action on anti-fraud legislative proposals introduced last year. These include the ... False Claims Act Amendments." TAF Education Fund on Prescription Drug Fraud The Taxpayers Against Fraud Education Fund released a study of the seven federal False Claims Act cases settled with the U.S. Department of Justice since 2001 in which pharmaceutical manufacturers paid a total of $1.6 billion to resolve allegations of Medicare and Medicaid drug pricing and marketing fraud. Sen. Charles Grassley (R-IA) noted that: "[The TAFEF Study] underscores how important it is to make sure that investigations and lawsuits under the False Claims Act are not harmed by the early destruction of drug pricing data by manufacturers.  I've urged the government to revise the regulation proposed in August that would let these kinds of documents be destroyed after just three years." For the full story and report, see >> TAF Press Release, November 6, 2003 NEC Settles San Francisco E-Rate Fraud Case for $20.5 Million NEC (Nippon Electronic Corp.) and four smaller companies settled the largest criminal and civil case yet dealing with the E-Rate program, a $4.45 billion federal program established to give schools and libraries discounts of up to 90 percent on telecommunications and Internet services. The program is partly financed by a service fee tacked on to consumer telephone bills, but is managed by a nonprofit organization whose board of directors is headed by executives from companies such as Verizon and AT&T. The whistleblower in the San Francisco case was the City of San Francisco itself, in the person of Arlene Ackerman, superintendent of the San Francisco Unified School District, and George Cothran, an investigator for the City Attorney’s office. NEC and the other companies were engaged in backroom deals, bribes and kickbacks to ensure they would win the school contracts to supply the necessary services and computer hardware, such as routers and switches. In addition, the equipment was sold at wildy inflated prices and much of it was far in excess of what was actually needed. Similar frauds are under investigation all over the U.S., and Cothran found corruption on the part of NEC in the other areas surrounding Detroit, Chicago and Milwaukee, as well as in Arkansas, Mississippi and South Carolina.>> For more information Pfizer Settles Neurontin for $430 Million Pfizer has settled the Neurontin drug case for a total of $430 million, of which $152 million will settle the False Claims Act aspects of the case, and an additional $240 million represents criminal penalties.  Another $38 million will go to state consumer-protection agencies. Settlement of the federal False Claims Act case does not end Pfizer's troubles, as the company has recently come under investigation for the pricing and marketing of human growth hormone Genotropin, the arthritis medication Bextra, and the cholesterol drug Lipitor. The whistleblower in the Neurontin case was Dr. David Franklin, a former Warner-Lambert medical liaison who filed his case in 1996, charging that Warner-Lambert (later bought by Pfizer) had an aggressive and complex scheme to illegally promote Neurontin for at least 11 off-label uses. While off-label use of a drug is permitted and common, the promotion of a drug for off-label use is illegal. Pfizer/Warner-Lambert was promoting Neurontin as being good for everything from anxiety to pain reduction, from ADHD to depression. In addition Pfizer/Warner-Lambert is alleged to have made kickbacks and payments to doctors to in the form of trips to Puerto Rico, Florida, and elsewhere, as well as paying doctors to "author" medical journal articles that were actually written by a medical marketing firm. Last year alone, Neurontin sales approached $2.3 billion. Pfizer has admitted in court papers that more than 78 percent of Neurontin prescriptions written in 2000 were written for unapproved uses. Noted Jim Moorman, President of Taxpayers Against Fraud: "What's wrong here is not off-label use of a drug but systematic lying to the government and bribery of doctors by a drug manufacturer that was willing to break the law in order to make billions in increased profits.  The marketing plan for Neurontin was based on payola and fraudulent misrepresentations to doctors and patients, and it was plainly illegal." >> For more information Whistleblowers Join With Sen. Grassley On the eve of the largest expansion of Medicare in history, eight whistleblowers that helped recover over $3 billion for the American people joined with Senate Finance Committee Chairman Charles Grassley (R-IA) to call for increased efforts to combat heath care fraud. >> To read rest of story Worldcom Settles for $27 million MCI has agreed to pay $27 million to settle claims that it defrauded the U.S. General Services Administration by charging the government excessive fees for telephone service between 1999 and 2004. The settlement was approved by the U.S. Bankruptcy Court which is presiding over the financial restructuring of WorldCom Inc., of which MCI was a part. MCI. MCI emerged from bankruptcy earlier this month after shedding more than $35 billion in debt. "This settlement illustrates the Justice Department's determination to recover funds that are owed to the United States," said Peter Keisler, assistant attorney general for the civil division. >> To read rest of story Schering-Plough Pays Texas $27 Million Schering-Plough has agreed to settle a Texas False Claims Act case for $27 million. The case involved the intentional misreporting of the true price of generic albuterol, an asthma inhalant. The drug was sold by Warrick Laboratories, a wholly-owned subsidiary of Schering-Plough. This is the first of several state-base False Claims Act cases against Schering-Plough, and a Federal False Claims Act case is likely to be under seal and waiting in the wings, as the U.S. Attorney's Office in Boston has subpoenaed documents and is expanding its investigation. The allegations that led to this settlement were first brought to the attention of the Texas Attorney General by Ven-A-Care of the Florida Keys Inc, whom TAF gave a "golden whistle" award to in April (see story above). Noted Texas Attorney General Greg Abbott, “Ven-A-Care has been instrumental in leading us to this orchestrated wrongdoing that has wasted taxpayer money for many years. I encourage more whistleblowers to step forward so we may bring the full measure of this law to bear on those who defraud the health care system.” >> For more information U. of Wash. Settles Case for $35 Million The University of Washington has settled a Medicare and Medicaid overbilling case with the Federal Government for $35 million, ending a four-year investigation. The case arose because the University failed to heed federal warnings or implement bill reforms even after being warned repeatedly to do so. Among the frauds: Charging for hundreds of operations that were "retroactively" billed to Medicare, charging Medicare and Medicaid for bedside procedures by doctors who weren't at bedsides, and charging for surgical procedures that were done in the absence of surgeons. In addition to the False Claims Act charges, criminal convictions were won against Dr. Richard Winn, the former head of neurosurgery, and Dr. William Couser, the former chief of nephrology. The U. of Washington settlement is the largest teaching hospital settlement to date (the previous record was the U. of PA at $30 million), and the second False Claims Act settlement for the U. of Washington (the previous violation was for $3.6 million and was paid in 1999). Tenet Health Care Pays $22.5 Million The Tenet Healthcare hospital chain has settled a False Claims Act case for $22.5 million, and agreed to pay an additional $8.25 million to settle charges that it submitted bills to get inflated payments for Medicare patients. >> To read rest of story Medco Pays $29 million with FCA Issues Unaddressed Medco Health Solutions, the nation's largest pharmacy benefits management company and mail-order pharmacy, has agreed to start telling patients, doctors and employers about the vast sums of money it has collected in rebates and received from drug manufacturers for promoting their products, while paying $29 million to settle consumer complaint cases in 20 states. >> To read rest of story Campbell and Getnick Join Board The TAF Education Fund recently added Albert Campbell and Neil Getnick to its Board of Directors. Mr. Campbell was the whistleblower in the Lockheed-Martin "Low Altitude Navigation and Targeting Infrared for Night" or "LANTIRN" system case in which Lockheed routinely double-billed the U.S. and foreign governments for the same parts. After a lengthy investigation by the Defense Criminal Investigative Service (DCIS), Lockheed settled the case with the U.S. Government for $37.9 million.  Mr. Campbell now owns and manages a thriving real estate business.  Mr. Getnick is a lawyer with Getnick & Getnick in New York, whose firm has filed qui tam whistleblower cases that have resulted in recoveries of close to $400 million for the U.S. Government, including the largest ever Medicaid fraud recovery (Bayer II). Faking Compliance While Practicing Fraud? Highmark, Inc., a Pennsylvania-based nonprofit corporation that is the nation's ninth largest health insurer, is a three-time loser with the False Claims Act, and a fourth loss may be on the horizon. Among the charges: violating Medicare Secondary Payer regulations -- the same charge the company faced in a 1995 FCA case. For the full story, see >> Highmark FCA Westlaw's New False Claims Act Book West has just published a new 1000-page treatise on the False Claims Act. Authored by Claire M. Sylvia, a former editor of the Harvard Law Review and currently a Deputy City Attorney in San Francisco, this treatise provides a discussion of all aspects of the False Claims Act, including procedure in qui tam actions, jurisdiction, pleadings, discovery, and other pretrial issues, interim remedies, settlement, and dismissal. State false claims laws are also discussed. >> To order your copy Litigation Reserves nSchering-Plough has set aside $500 million in anticipation of payouts dealing with government questions about the company's marketing, sales and clinical trial practices covering asthma inhalant albuterol. nBristol-Myers has set aside $250 million in litigation reserves, comprised of $150 million in relation to wholesaler inventory issues, and $100 million in relation to pharmaceutical pricing and sales and marketing practices. The Rush to Shred the Evidence When the prescription drug industry was caught ripping off Medicaid, they were forced to pay hundreds of millions of dollars in damages. Under the guise of "paper work reduction," however, oblivious CMS officials came up with a proposal to cut liabilities in half: allow companies to destroy drug-pricing data except for the last three years. Taxpayers Against Fraud vigorously opposed this proposal (along with Sen. Grassley), and right now it looks like we're winning. To read our comments on the rules, see >> Rebate Comments TAF Files Brief on First-to-File The TAF Education Fund has filed a brief asking the Ninth Circuit to reinstate Dr. Patrick Campbell’s qui tam action against Redding Medical Center, a Tenet Healthcare hospital. In the case, the Ninth Circuit is being asked to interpret the False Claims Act’s "first-to-file bar" where two qui tam complaints making similar allegations were filed after the fraud was publicly disclosed in the media. >> To read the TAF Education Fund brief TAF and AARP File Illinois FCA Brief The TAF Education Fund and AARP have filed a join amicus curiae brief asking the Illinois Supreme Court to uphold the constitutionality of the Illinois False Claims Act. The TAF/AARP brief argues that the trial court erred by extending the Illinois Supreme Court’s decision in Lyons v. Ryan, to invalidate the qui tam provisions of the Illinois Whistleblower Reward & Protection Act. To read the brief >> click here To read the reply brief >> click here Recovering America's Stolen Millions Giant Killers describes in novelistic detail how the False Claims Act was revitalized and how courageous whistleblowers faced personal hardship to recover billions of dollars stolen from American taxpayers. This excellent and informative read is available from your local bookstore or Amazon.com beginning in February 2004. "Reading more like a thriller than a tome on the law, this book provides a valuable, and fascinating, public service." - Cokie Roberts