False Claims Act Update & Alert |
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Taxpayers
Against Fraud Education Fund | Washington, D.C. | WWW.TAF.ORG |
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 GE
Case Out From Under SealA four-year federal investigation of General Electric's plant in Madisonville, Ky., including allegations that the company produced thousands of cracked engine blades for Apache and Blackhawk military helicopters, has partially come out from under seal. The suit alleges that GE employees hid documents that would have shown the plant coated over cracked engine blades that had been burned while being ground to specifications. Brett Flinn, the agent in charge of the Army's investigation field office in Dayton, Ohio, confirmed that a joint criminal and civil investigation of the plant is under way by several agencies, including the Justice and Transportation departments.>> To read more |
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 CMS
Extends Record KeepingTAF Education Fund has filed several comments on proposed rules implementing the Medicare Modernization Act. One set of comments addressed FCA issues relating to Prescription Drug Plan Sponsors and Retiree Health Plans, and another addressed issues relating to Medicare Advantage plans. We are happy to report CMS has adopted TAF-EF’s recommendation that Medicare Advantage organizations and Part D Plan sponsors retain records for 10 years from the last contracting period or audit, whichever is latest. Retiree Drug Plan Sponsors will be required to keep records for six years, and "longer than 6 years if it knows or should know that the records are the subject of an ongoing investigation, litigation, or negotiation involving civil, administrative, or criminal liability.” |
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 Grassley
& Cornyn Want ResultsIn a statement of support for Alberto Gonzales, Sen. Charles Grassley (R-IA), said he expects to see significant changes in the management of FCA cases: "I want to make one point clear: I expect results. I strongly encourage the new Attorney General not to allow the current bureaucrats at DOJ to derail such an effort. . . Many of the problems I see with DOJ’s FCA program can be traced back to careerists who lack a strategic vision .... and who don’t like whistleblowers ...." >> To read Grassley's letter to Gonzales >> To read Cornyn's letter to Gonzales |
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 DOJ
Files Brief in U. of Phoenix Implied Certification
CaseThe Department of Justice has filed an amicus curiae brief that asks the U.S. Ninth Circuit Court of Appeals to reverse the dismissal of a False Claims Act lawsuit against the University of Phoenix. The DOJ brief does not take a position on the merits of the fraud allegations, but does take issue with the district court's decision to dismiss the case on the grounds that the U. of Phoenix never made direct or implied "false certifications" in the course of receiving federal student-aid funds. >> To read more |
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 King
Pharma Settlement SoonA settlement is expected very soon in a lawsuit against King Pharmaceuticals regarding underpayments to Medicaid regarding Altace, Aplisol, Lorabid, Fluogen, and Levoxyl. The settlement deals with misreporting of prescription drug "best prices" and the payment of rebates under Medicaid, and is expected to be in the range of $135 million. Over $2.4 billion has been recovered from drug manufacturers engaged in fraud against the U.S. Government and the 50 states, and the Assistant Attorney General for the Civil Division reports that over 500 drugs are now under investigation. |
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 GM
Destroyer Case Goes to TrialGeneral Motors is proceeding to trial in Dayton, Ohio in a case involving allegations of fraud during the construction of the generators used in the Arleigh-Burke Class of destroyers made famous by the sinking of the U.S.S. Cole. The qui tam lawsuit was brought by Roger Sanders and Roger Thacker, two former employees of the assembler of the generator sets, General Tool Company. The relators allege that GM, through its Allison Engine subcontractors and others, failed to hire properly certified welders, failed to inspect thousands of welds, and violated Truth In Negotiation Act requirements. >> To read more about the case |
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 Accounting
Firm Liable for FraudCalifornia's First District Court of Appeals has ruled that the District Attorney and City Attorney of San Francisco have standing to bring a qui tam action under the California False Claims Act in order to obtain damages on behalf of the state. The Court further ruled that a title company withholding money due to the state had damaged the state by withholding the money, and that the accounting firm of PricewaterhouseCoopers could be held liable, under the California False Claims Act, because they had not flagged the very obvious problem. >> To read more |
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