False Claims Act Update & Alert


Taxpayers Against Fraud Education Fund | Washington, D.C. | WWW.TAF.ORG          
November 20, 2012


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Five More Banks Move to Settle Case
Alleging Mortgage Fraud Against Veterans

Six banks have agreed to settle a whistleblower lawsuit filed in 2006 by Victor Bibby and Brian Donnelly alleging that the banks, along with two others, cheated military veterans and taxpayers out of hundreds of millions of dollars by hiding illegal fees in veterans’ home mortgage refinancing.  The settlement for $
161.7 million leaves two remaining banks -- Wells Fargo and Mortgage Investors Corporation -- still on the hook, and the two banks represent 80 percent of all claims. The five banks which have recently agreed to settle are Countrywide Home Loans, Inc. ($45 million), PNC Bank ($38 million), First Tennessee Bank ($16 million), SunTrust Mortgage ($10.2 million), and CitiMortgage ($7.5 million). In March, JP Morgan Chase agreed to pay $45 million to settle claims against it. >> Read more



Pfizer's Wyeth Unit to Pay $55 million
Pfizer's Wyeth subsidiary has said it has an “agreement in principle” with DoJ to pay $55 million plus interest to settle a criminal investigation related to off-label marketing of the heartburn drug Protonix.  This appears to be the criminal part of a civil False Claims Act case where potential corporate liability is in the $2 billion range. >> To read the FCA complaint

Slaughterhouse Settles FCA Case
Hallmark Meat Packing Co. has agreed to settle a False Claims Act case brought by the Humane Society of the U.S. alleging the company dragged "downer" cows to the slaughterhouse to be mixed into the beef used in the school lunch program. As a result of video evidence supplied by HSUS, over $150 million worth of beef was recalled.  Hallmark will pay $300,000 over 5 years (this is an "ability to pay" case) and the Humane Society will be paid a relator share of no more than 25%. >> To read more

DoJ Dismisses and Joins Cases Against KBR
DoJ has voluntarily dismissed a case against KBR that alleged
the company violated the False Claims Act by unlawfully billing for private security contractors under the Iraq war LOGCAP III contract. The same week DoJ declined this case, DoJ joined another case against KBR, alleging the company knowingly passed on improper charges submitted by a subcontractor (First Kuwaiti Trading Company) for costs associated with delivering and installing trailers used in Iraq.

Massive Fraud in Skilled Nursing Facilities
The inspector general of the Department of Health and Human Services says 25% of all Medicare claims submitted by skilled nursing facilities have "errors" and that the majority of these "errors" are, in fact, upcoding for expensive therapy that is not medically necessary. The cost to U.S. taxpayers:
$1.5 billion in 2009 alone.