Report the Fraud

This Blog Focuses on Monetary Fraud on the Government, How to Report it and be Rewarded for Your Efforts.

False Claims Act Poised to Recover $8 Billion in Fiscal 2012

So far 2011 has been a banner year for recoveries under the False Claims Act. Nearly $6 billion has been recovered to date including: 

Glaxo agreeing to pay $3 billion 

Abbott agreeing to pay $1.3 billion 

Merck agreeing to pay $950 million 

Oracle agreeing to pay $200 million 

Sandoz agreeing to pay $150 million 

Maxim agreeing to pay $150 million 

New York City agreeing to pay $70 million 

LHC Groups (home health) agreeing to pay $65 million.

Another $2 Billion is certainly possible.  Here’s a look at what’s ahead:
 Risperdal: Johnson & Johnson “tentatively agreed to settle a single misdemeanor criminal charge: related to Risperdal” this past August.  A formal civil and criminal settlement is likely to follow and likely to be in the $1 billion range.
 Agility/Public Warehouse: 
 This is a big FCA case related to the Iraq war.  Agility is a Kuwati-owned contractor that has now been excluded from doing business with the United States.  Settlement negotiations have been ongoing for sometime and are continuing.  Estimates are for a settlement in the range of $650 million.
 Ranbaxy: 
 This company had serious quality control and manufacturing problems at its pharmaceutical plant.  The Food and Drug Administration has accused Ranbaxy of “a pattern of systemic fraudulent conduct” over a period of years.  Ranbaxy is accused of fabricating data in drug applications, taking shortcuts in crucial quality control tests and violating a raft of manufacturing standards.  This case is believed to be a FCA whistleblower case though it has not been unsealed.  Settlement negotiations are primed to conclude now that Lipitor has lost its patent protection and Ranbaxy is a manufacturer of generic Lipitor.  It is time for this company to put its problems behind it and move on to greener pastures.  Speculation regarding a settlement amount gathers around $400 million.
There are certainly other FCA cases out there.  However, these cases alone could push fiscal 2012 over the $8 billion mark in total recoveries.  Whistleblowers be encouraged and keep bringing your information forward.
Don McKenna
Don@hwnn.com

Securities and Exchange Commission Wants to Pay Whistleblowers

The Securities and Exchange Commission Is Now Providing Financial Incentives for Whistleblowers to Come Forward.

This year the U.S. Securities and Exchange Commission created the Office of Whistleblower to encourage people with knowledge of large-scale securities fraud to come forward and report it.  For doing so, the whistleblower can receive a percentage of any recovery from the defendant, or penalties assessed against the defendant, by the SEC.

I have attended two CLE conferences where Steve McKesson, Chief of the SEC Whistleblower Office, stated that he wants to pay awards to whistleblowers as an incentive for more people to come forward.  Given the penalties levied against major investment firms like Goldman Sachs ($550 million), a whistleblower’s award can be very substantial.

To be eligible for an award, the whistleblower must voluntarily provide original information that leads to a fine, penalty or recovery against the defendant.  The whistleblower can make the report anonymously, but must hire counsel to do so. 

To learn more contact me or visit the SEC Office of Whistleblower website.

By: Don McKenna

Don@hwnn.com

$200 Billion Per Year in Medicare Fraud

Healthcare fraud is pervasive.  An October 2009 Reuters article estimated that $200 billion-per-year is stolen from the American Taxpayers by Medicare Fraud.  As budgets get squeezed and reimbursement rates decrease, many providers look for ways to “game the system” in order to increase or maintain revenues.  This gaming of the system, or “picking Uncle Sam’s pocket,” is theft of our tax dollars and it needs to be stopped.

Fortunately, Honest Abraham Lincoln authored the False Claims Act.   Today, the FCA serves as a powerful weapon for people with inside knowledge of fraud on the Government to report that fraud and receive an award for doing the right thing.  So how does someone with knowledge of Medicare fraud report it to the Government and receive an award?  The following is a simple checklist:

  • Gather information regarding the fraud and retain it – you will need it later.
  • Contact legal counsel with knowledge of the FCA.  The FCA requires that you have a lawyer to file a case and you will need experienced counsel throughout the process.  Most FCA lawyers will handle your case on a contingency basis and you should not need to come out of pocket.
  • Report the fraud internally within your company and keep a record of your report.  If you report the fraud electronically, print a hard copy and keep it.  This action will cover your backside and be of value later if your employer retaliates against you for being a whistleblower.
  • Disclose all of your information of the fraud to the Government before you file a lawsuit.
  • After you give all your information to the Government, file the lawsuit under seal.
  • Wait for the Department of Justice and HHS-OIG to investigate your allegations of fraud.
  • If the Government’s investigation finds merit to your allegations, you can receive an award of between 15 to 30 percent of the recovery.

By: Don McKenna

Don@hwnn.com