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A Government Accountability Office (GAO) report has announced that a study of 15 for-profit colleges shows that these colleges misled students to encourage enrollment, and that students were encouraged to commit fraud when applying for financial aid.  The magnitude of the cost of such fraud on taxpayers is not known, but the Department of Education lends $20 billion annually in student loans.

GAO investigators posed as applicants and met with various officials at 15 unidentified for-profit colleges and universities. Continue reading ›

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A qui tam action under the False Claims Act brought in South Carolina would not be particularly interesting except for one small fact: the case is actually going to trial.  In fact, the case is going to trial for the second time, after a jury found that Tuomey Healthcare System violated the Stark Law, but did not violate the False Claims Act.  The judge later decided that deposition testimony of Tuomey’s CFO should have been allowed into evidence and the case is scheduled for a retrial. Continue reading ›

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With the passage of the Dodd-Frank Act (AKA the Financial Reform Bill), the SEC now has more power to reward whistleblowers who report securities law violations with substantial payments.  The first of these rewards came on July 23rd when Karen and Glen Kaiser of Connecticut received $1 million for their assistance in proving insider trading allegations against Pequot Capital Management, one of its employees, and a former Microsoft employee. Continue reading ›

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Panalpina Inc., a Swiss-based contracting company, has agreed to settle a False Claims Act and Anti-Kickback case with the government which alleged that the company illegally paid kickbacks to another military contractor to secure subcontracting work.  Panalpina allegedly paid kickbacks to Kellogg Brown and Root, Inc., a logistics firm under contract with the U.S. Army to provide logistic support in Iraq and other areas.  Panalpina will pay the government $375,000 to settle these allegations. Continue reading ›

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Morganti Group, Inc. of Danbury, Connecticut has agreed to settle a False Claims Act case with the federal government for $800,000 which accused the construction company of submitting false claims for payment to the U.S. government in connection with two foreign assistance projects.  Morganti submitted false documents to the United States Agency for International Development (USAID) while bidding for two projects in Jordan: the Greater Amman Water Project in 2000, and the Aqaba Water Project in 2002. Continue reading ›

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The National Whistleblowers Center (NWC) recently wrote a letter to Attorney General Eric Holder urging the Department of Justice (DOJ) to use the False Claims Act (FCA) to recover the most money possible for losses sustained after the Deepwater Horizon oil rig explosion.  The NWC told Mr. Holder: “When false claims impact the welfare of the entire Gulf Region, the False Claims Act is the appropriate and best legal instrument to enforce true accountability.” Continue reading ›

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Sacramento, CA – A student and three former employees have filed a California False Claims Act case against Universal Health Services, one of the nation’s largest health care management companies and owner of a Sacramento special education school called Creekside Academy.  The lawsuit alleges that the private, for-profit school system falsified records, charged the state for absent students, understaffed classrooms, and employed uncertified teachers while receiving public education dollars. Continue reading ›

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A federal jury in New York has found Cornell University’s Weill Medical Center and former faculty member Wilfred van Gorp guilty of violating the False Claims Act (FCA) by defrauding the National Institute of Health (NIH) in a research grant application.  Weill Medical Center and Dr. van Gorp applied to NIH for a research grant to train fellows in neuropsychology for a career in HIV/AIDS research.  The jury found the defendants guilty of violating the False Claims Act by misrepresenting material information in progress reports which were falsified in order to convince NIH to continue the funding.

Although the research grant was supposed to train fellows for a career in HIV/AIDS research, the defendants apparently required the fellows to treat many private pay-for-service patients with other medical issues. Continue reading ›

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Teva Pharmaceuticals has agreed to pay $78 million to settle Medicaid fraud allegations in Florida and Texas.  Teva owes the state of Florida $27 million due to alleged violations of the Florida False Claims Act.  Teva allegedly reported inflated drug prices to Florida’s Medicaid Program, which caused Florida to overpay Teva in reimbursement payments.  The Medicaid program reimburses pharmacies for drugs based on the prices reported by drug manufacturers like Teva, and by illegally inflating the prices of its drugs, the company cost each State millions of dollars.  Competitor company Ven-a-Care reportedly provided the State Attorney General with information about Teva’s illegal practices. Continue reading ›

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A multi-state agreement was reached between 49 states, the District of Columbia, and Alpharma Inc. on June 8 to settle allegations of kickbacks and off-label promotion of its drug, Kadian. A whistleblower receiving $5.33 million of the total $42.5 million settlement initially filed the lawsuit in 2006 under the False Claims Act.

Between January 2000 and December 2008, Alpharma allegedly paid kickbacks to doctors to encourage them to prescribe Kadian or both approved and off-label uses. Continue reading ›

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