Weekly Newsletter | July 2, 2020 | Subscribe
COVID-19 Related Fraud
----------------------------------------------------------------------------------- Dept. of Justice: Seattle Doctor Charged with COVID Relief Fraud A doctor was taken into custody on allegations that he fraudulently sought $3 million in Paycheck Protection Program loans. He has been charged with one count of wire fraud and one count of bank fraud after allegedly misrepresenting the number of employees and payroll expenses in a number of applications and allegedly concealing his own criminal history.
Lexology: Why the Civil False Claims Act is Important Under the CARES Act Under the Civil False Claims Act, government may pursue legal action if misuse of federal funds or property is suspected included payments made to businesses under the CARES Act. Past disaster relief case laws showed that the government can and will act, civilly and criminally, against illegal conduct and will do so for years following the misconduct.
JD Supra: Healthcare Fraud in a Public Health Emergency This article discusses the False Claims Act’s role in protecting government healthcare dollars during the COVID-19 pandemic.
Case Settlements & Opinions
Novartis Agrees to Pay $678 Million to Settle Allegations of Illegal Kickbacks Involving Several of the Company's Cardiovascular Drugs Both the United States' and the whistleblower's complaints alleged that Novartis had fraudulently billed Medicare, Medicaid, TRICARE, and other federal and state-funded health care programs. As part of the scheme, Novartis allegedly spent millions of dollars on incentive programs to doctors who steered patients toward drugs from Novartis' CV Division in exchange for illegal kickbacks. The whistleblower, Oswald Bilotta, was represented by McEldrew Young Purtell, Attorneys-at-Law and Shepherd, Finkelman, Miller & Shah, LLP.
Dept. of Justice: “Compound King” and Wife Sentenced in $21 Million Health Care Fraud Scheme A Houston pharmacist and his wife were sentenced for their roles in a $21.8 million health care fraud scheme. The self-proclaimed “Compound King” was sentenced to 10 years in prison for conspiracy to pay and receive kickbacks, to commit health care fraud, and to launder money. He was charged with eleven counts of health care fraud and three counts of wire fraud while his wife was charged with one count to conspiracy to pay kickbacks and was sentence to 30 days of home confinement.
PRNewswire: Constantine Cannon Announces $57 Million Whistleblower Settlement In a press release, Constantine Cannon announces a $57 million whistleblower settlement with VNSNY, the largest not-for-profit home health care agency. The whistleblower alleged that VNSNY failed to provide its patients with critical nursing, therapy visits, and services that their doctors prescribed under the patient Plans of Care. According to the whistleblower’s complaint, VNSNY was maximizing their Medicare and Medicaid reimbursement while endangering patients’ welfare.
Law360: Virus, Regs Highlight Need for Model State Whistleblower Law The North American Securities Administrators Association (NASAA) announced its proposal for a model state act to reward and protect whistleblowers who report wrongful securities practices to the applicable state securities. If adopted in one or more states, it would give whistleblowers a financial incentive to report securities misconduct at the applicable state levels.
Lexology: Fourth Circuit Dismisses False Claims Act Complaint The complaint alleged that two hospitals submitted fraudulent cost reports that did not comply with the “Related-Party Rule.” However, the complaint was dismissed with prejudice after finding that the relator failed to meet certain pleading requirements in his fraud and retaliation claim.
Dept. of Justice: Ambulance Company Owners Sentenced for Roles in Medicare Fraud Scheme Two owners of Guam Medical Transport (GMT) was sentenced to prison for their roles in a health care fraud scheme and a money laundering scheme that resulted in the U.S. losing an estimate of $10.8 million, the largest single Medicare ambulance fraud cases prosecuted by Dept. of Justice. The defendants engaged in conspiracies to defraud Medicare and TRICARE by submitting claims for reimbursement for medically unnecessary ambulance services.
National Law Review: Nursing Home’s Rehabilitative Services Chain Settles False Claims Allegations for $10 Million Saber Healthcare Group, LLC and other entities agreed to pay the U.S. government $10 million to resolve false claim allegations. The whistleblower’s complaint alleges that Saber knowingly and improperly established general goals that all patients be provided with “Ultra High,” Medicare’s most expensive level of therapy, regardless of the patients’ therapeutic needs.
JD Supra: Business is Victorious in Unclaimed Gift Card False Claims Case The Delaware Supreme Court sided with Overstock.com in a False Claims suit that alleged that the retailer failed to remit unclaimed gift card funds to the state. Previously, the jury found Overstock.com liable for about $7.3 million; however, the Delaware Supreme Court, interpreting the FCA statute in effect for the years at issue, determined that the trial judge improperly instructed the jury that the knowing failure to file unclaimed property reports was the making of a false statement as required to succeed on an FCA claim.
Dept. of Justice: A Fifth Pharmaceutical Company Charged with Ongoing Criminal Antitrust Investigation Glenmark Pharmaceutical Inc. was charged for conspiring to fix prices for generic drugs. The charge alleges that Glenmark conspired with other drug companies to increase and maintain prices of pravastatin and other generic drugs beginning in or around May 2013 and continuing until at least in or around December 2015. The alleged gain to the conspirators and the loss to the victims was around $200 million.