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Governor David Paterson has signed into law a bill that will strengthen the New York False Claims Act and give the state greater opportunity to collect money that has been fraudulently withheld from defendants. Specifically, the bill provides a qui tam provision which will allow private citizens to sue defendants in the name of the government for tax law violations.  If a whistleblower is helpful in providing the government with information that leads to a recovery of lost tax revenue, he or she will be able to collect a portion of the recovery. Continue reading ›

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Charles J. Antonucci, Sr., former President and Chief Executive Officer of Park Avenue Bank is the first to be criminally charged for attempting to defraud the Troubled Asset Relief Program (“TARP”). The case was unsealed in March in the southern district court of Manhattan.

Agents of the Special Inspector General for TARP (“SIGTARP”) participated in the investigation, a enforcement agency resulting from the recently passed Financial Fraud Enforcement Task Force established in November 2009. Continue reading ›

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The private security firm Blackwater is the subject of a False Claims Act (FCA) lawsuit in the United States and the company’s founder was answering questions in Abu Dhabi on August 23rd.  Erik Prince, the company’s founder, moved to the United Arab Emirates this past month, and the plaintiff’s attorney had to travel to that country to get a deposition from Mr. Prince. Continue reading ›

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Dominion Oklahoma Texas Exploration and Production, Inc. (Dominion) and Marathon Oil have agreed to pay $2.2 and $4.6 million to the federal government to resolve allegations that the companies underpaid royalties on leases with the federal government and Native American Tribes.  Many oil companies drill for oil on lands owned by the federal government or Native American Tribes.  When they drill on this land, they operate under a lease with the government that requires the companies to pay royalties based on the amount of oil extracted.  According to the government, Dominion and Marathon Oil engaged in a systematic campaign to underpay these royalties. Continue reading ›

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For-profit universities have recently been the subject of a number of False Claims Act lawsuits.  Continuing this trend, Grand Canyon Education settled its False Claims Act suit for $5.2 million in August. The whistleblower, a former employee of the company, filed the qui tam action in August 2007. The case was unsealed in September 2008 and alleged unlawful recruitment and compensation practices. Continue reading ›

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Nelnet, a student lending company based in Lincoln, Nebraska, is scheduled to go to trial on a False Claims Act case next week.  The lawsuit alleges that the company defrauded the U.S. Department of Education, which subsidizes many student loans to make them more affordable to students.  The lawsuit seeks over $300 million from Nelnet.  Under the FCA’s treble damages provision, this education fraud case could result in a recovery approaching $1 billion.

The lawsuit specifically alleges that the company basically invented a loophole in the DOE’s student loan program to increase the amount of subsidies it received. Continue reading ›

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The Ninth Circuit became the latest in a handful of other Circuits to endorse the “implied certification theory” of the False Claims Act in a decision handed down on August 9th.  Liability under the FCA is most clear when a defendant falsely obtains money from the government by “expressly” certifying compliance with federal regulations.  However, the question of whether a defendant can be liable for “impliedly” certifying compliance with federal law – such as by simply submitting a claim for reimbursement from Medicare – is much more debatable. Continue reading ›

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The U.S. Food and Drug Administration (FDA) has issued a letter to drug maker Novartis warning it to cease its incomplete and misleading promotion of the leukemia fighting drug Tasigna on Facebook.  Novartis had been using Facebook’s “share button” to market the drug on the social website giant.  However, in violation of federal laws, the advertisements failed to include the risks associated with taking the drug.  Additionally, despite the fact that clinical trials have not shown the drug to be more effective than its competitors, the Facebook advertisement promoted the drug as superior to other products – again in violation of federal law. Continue reading ›

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The Department of Justice (DOJ) has settled a False Claims Act case against Minnesota based Center for Diagnostic Imaging which accused the company of Medicare fraud.  The radiologic imaging company has agreed to pay the U.S. government $1.2 million to settle part of the allegations in the lawsuit that related to Medicare billing procedures.  The DOJ alleged that the company “upcoded” the procedures it billed to Medicare, billing procedures as if they were different, more expensive procedures. Continue reading ›

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The Department of Justice (DOJ) is seeking to intervene in a qui tam lawsuit against St. Jude Medical Inc., a manufacturer of pacemakers and other heart devices.  The DOJ initially began its investigation in 2005, and this past December decided not to intervene in the case.  However, after talking to more witnesses and uncovering more documents, the DOJ now says it has “good cause” to intervene, according to a federal district court document filed in Boston on August 5th. Continue reading ›

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