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New York Whistleblower And Commercial Litigation Blog

Drug maker settles illegal charity copay claims for $360 million

As drug prices rise in the U.S., some have expressed concerns that charitable payment of drug copays could be contributing to price inflation. This is because, although most patient assistance groups of this type are charities, pharmaceutical companies routinely donate to the groups.

These donations are encouraged where legal, but they can only be made when the charity is independent from the pharmaceutical company. If the drug companies were to pay patients' copays directly they would be in clear violation of the Anti-Kickback Statute, which prohibits offering or paying, directly or indirectly, anything of value to induce Medicare patients to buy a particular drug manufactured by that company. Since indirect inducements are prohibited, payment of copays by charities must be done independently from the drug maker.

Vascular Access Centers accused of false billing, kickback scheme

Vascular Access Centers L.P., along with 23 subsidiaries and related corporations, has been accused of Medicare fraud, violating the False Claims Act, and violating the Anti-Kickback Statute and have agreed to pay at least $3,825 million to resolve the allegations. If certain contingencies arise, additional payments up to $18,360,794 could be triggered.

The allegations originated from two whistleblower lawsuits under the False Claims Act, which allows private individuals to file lawsuits on behalf of the government in cases of fraud, waste and abuse in federal contracting. In successful cases, the whistleblowers receive a percentage of any money recovered as a reward for their service. In this case, the two whistleblowers will share a minimum of $612,000.

Whistleblower’s Medicare accusation may go to Supreme Court

One of the country’s largest home health providers has asked the U.S. Supreme Court consider a recent decision that says the company defrauded Medicare to the tune of $35 million.

Marjorie Prather was a registered nurse hired by Tennessee-based Brookdale Senior Living Communities. Prather was hired to review thousands of backlogged Medicare claims.

Northrop Grumman settles False Claims Act case for $27.45 million

The Justice Department has accused defense contracting giant Northrop Grumman Systems Corporation (NGSC) of overbilling for employee hours on two Air Force battlefield communications contracts. It has now agreed to pay $25.8 million to settle those claims without admitting responsibility. When added to previous repayments, the company will have paid $27.45 million to reimburse the government. In addition, it has agreed to forfeit $4.2 million to resolve criminal allegations brought by the U.S. Attorney's Office for the Southern District of California.

According to the DOJ, NGSC entered into two contracts with the U.S. Air Force to provide battlefield communications services: The Dynamic Re-tasking Capability contract and the Battlefield Airborne Communications Node contract. Between July 1, 2010, and Dec. 31, 2013, the DOJ alleges, the company billed the Air Force for the labor of certain individuals stationed in the Middle East. Unfortunately, they did not actually work the hours claimed.

Critics of Facebook create safe space for whistleblowers

A group known as “Freedom From Facebook” is launching a new advertisement campaign that will ask whistleblowers inside Facebook to share concerns about the company. Freedom From Facebook is comprised of a group of nonprofits that share fears about Facebook’s growing power and the lack of user privacy.

The advertisement campaign will include a link to a confidential website hosted by the group. From there, Facebook employees will be able to share concerns about the company and its leadership anonymously. The group hopes it will provide a “safe space” for Facebook employees.

DOJ accuses Navy contractor of lying about radioactivity tests

The Hunters Point Naval Shipyard in San Francisco is being redeveloped into housing and commercial space. Between 1946 and 1969, however, the former Navy shipyard was involved in activities that created significant amounts of radioactive waste. First, the facility was the location of top-secret nuclear tests. Second, it was where ships were decontaminated after returning from hydrogen bomb tests. Cleaning up the radioactive waste is expected to cost at least $1 billion.

A Navy contractor called Tetra Tech EC Inc. was paid over $250 million to perform radiological testing and remediation on a 400-acre site slated to be redeveloped into over 10,000 homes.

Mortgage lender to pay $13.2M for violating FHA lending standards

Between Jan. 1, 2006 and Dec. 31, 2011, the Justice Department says, a Miami-based mortgage originator called the Universal American Mortgage Company LLC (UAMC) knowingly originated mortgages under the Federal Housing Administration mortgage insurance program that did not qualify with that program's lending requirements. These defective loans violated the False Claims Act because the FHA mortgage insurance program is left on the hook when its insured mortgages go into foreclosure.

UAMC is what's called a "direct endorsement lender" or "DEL" for the FHA insurance program, which is managed by the Department of Housing and Urban Development. DELs are given the authority to originate, underwrite and endorse FSA-insured mortgages with no direct FHA oversight.

What whistleblowers can do about retaliation

Retaliation is one of the most significant concerns whistleblowers have when coming forward to report unethical behavior. Even though there are means of protection, employees may still harbor anxieties of being punished. They worry about their career, family and future.

It is against the law for an employer to retaliate against an employee, but that does not always stop them from doing so. However, there are actions that whistleblowers can take to protect themselves. 

Whistleblowers have protections, but can still face challenges

Whistleblowers serve a key role in our society. By bringing corporate wrongdoing to light, they open the door for justice to be served and for companies to go onto a better path. Whistleblowers can help with putting a stop to Medicare/Medicaid fraud and other types of fraud against the government.

Now, there are many worries that workers may have when blowing the whistle on wrongdoing they have discovered. One is fear of how their employer will react.

Military contractor settles claim it knowingly used cheap steel

A military contractor that manufactures helicopter landing systems for U.S. Navy destroyers has recently settled a claim that it knowingly substituted cheaper steel than the Navy contract specified but still billed for the contract amount. This violated the federal False Claims Act, according to the Justice Department. Indal Technologies, Inc., a division of the Curtiss-Wright Corporation, has agreed to pay $3.5 million to resolve the allegations.

Since the 1970s, Indal has been manufacturing the Recovery, Assist, Secure and Traverse (RAST) system, which allows helicopters to land on Arleigh-Burke-class Navy destroyers. When helicopters land on destroyers, it is often during high winds or rough seas. Therefore, once the helicopter lands, it is locked onto a trolley that moves it along a series of steel track plates to a shipboard hangar. According to the Navy's contract, these track plates must be made of HY100 steel, which is a stronger, corrosion-resistant steel.

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