The Department of Justice announced a settlement with nearly 500 hospitals related to the implantation of cardioverter defibrillators (ICD’s). The surgeries did not meet the appropriate medical conditions for Medicare coverage established in the National Coverage Determination (NCD). Medicare will generally exclude coverage for ICD procedures when a bypass or angioplasty has been performed within the last 90 days or within 40 days of a heart attack.
Continue reading

In what has to be one of the more bizarre cases of alleged Medicaid fraud, a Florida dentist has been accused of needlessly pulling children’s teeth as part of a Medicaid fraud scheme. The case has not yet been litigated; however, 58 notices of intent to sue by angry patients are known to exist. As an example of the level of anger and frustration, protests were held outside the offices of Dr. Howard Schneider in Jacksonville. A Medicaid fraud investigation has been opened by the Florida Attorney General’s Office.
Continue reading

Historically, IRS tax whistleblower cases have been both frustrating and unproductive. In a Bloomberg article in 2012, Michael Fitzgerald was quoted as saying a referral to the IRS of a whistleblower case is akin to being in “purgatory” since there had historically been little to no communication from the service. Well, that may all be changing now.
Continue reading

A False Claims Act, pending in The United States District Court for the District of New Jersey against Allied Dental Practices of New Jersey and a number of individual dentists, has been settled. The complaint alleges that local Dentists Edward Poller, Glenn Prager, Christopher Emma, Todd Prager, and Daniel DiCesare instructed employees to “delete” all credit balances for the patients in their 22 locations in New Jersey and Pennsylvania. This complaint is one of the first cases settled under the New Jersey False Claims Act and is believed to be the first “whistleblower” case involving a novel allegation under the New Jersey Unclaimed Property Act. The complaint alleges violation of the Federal and New Jersey False Claims Acts. The defendants have agreed to pay over $420,000.00 including payment for the State and Federal false claims ($200,000), a penalty to the New Jersey Unclaimed Property Office ($75,000), a wrongful discharge settlement ($87,500) and all attorney’s fees. It is not known whether insurance companies will also seek reimbursement.
Continue reading

We had always been of the opinion that the correct saying is “you are what you eat”, however, a recent False Claims Act case seems to infer that a food supply company has changed that old saying to “you are what you bill”.

A federal trial has been set for 2015 against a frozen meal delivery company that is being accused of Medicaid fraud. The complaint alleges nearly $900,000 in improper bills to Medicaid.

The company, Homestyle Direct, is accused of delivering meals to deceased clients, lying to clients about Medicaid requirements and, in some cases, delivering only desserts to the homebound clients and billing Medicaid for a full meal. Medicaid does not reimburse for desserts that don’t meet nutritional requirements.

The allegations in this case bring to the forefront the many different ways that Medicare and Medicaid can be defrauded. In this case, like so many others, the information is usually brought to the government’s attention by an individual with direct knowledge referred to as a “whistleblower”.

The federal False Claims Act, like many state False Claims Acts, provide rewards to the whistleblower for providing information to the federal or state government. The reward can range between 15% and 30% depending on the quality of the information.

If you or someone you know has witnessed fraud against the state or federal government, you should contact a qualified whistleblower attorney.

The names are as American as apple pie — J.C. Penney’s, Belk’s, Nordstrom’s and Lord & Taylor. The clothes sold in these stores that were manufactured by Dana Kay and Danny & Nicole and its affiliate companies, however, were made overseas and imported to the U.S. under false pretenses. Now Dana Kay and affiliates have agreed to pay the federal government $10,000,000 to settle a False Claims Act case in which they are alleged to have fraudulently valued their imports in order to avoid millions of dollars in tariffs. This is the largest Customs Fraud case ever settled in New York.
Continue reading

1. Shut up and get a good lawyer, fast. You can complain about the fraud internally, but we all know how that usually ends. Once you identify a fraud, immediately contact a lawyer to ask for guidance, including what documents and corroborating evidence that you can take with you. Do NOT ever take originals. You don’t want the real crooks to flex their muscle and convince authorities that your “theft” should negate their fraud. It’s also possible that as soon as you start thinking about the impropriety, people at the company know who you are. That means you could be escorted out of the building before you can grab your kids’ pictures off your desk.

2. Make sure you have a case. FCA, IRS and SEC cases are not based on rumor or hunches, but evidence. You have to prove fraud and the government is not paying awards for generalized tips, but for specific evidence. You are supposed to be doing the government’s work for it. Don’t assume that you will be able to prove your case by having your lawyer or the government subpoena documents from the defendant after the case is filed. Think about what you personally know right now. As the great philosopher Tommy Boy said, “I can get a good look at a T-bone by sticking my head up a bull’s ass, but I’d rather take a butcher’s word for it.” The government wants the butcher, but come prepared with meat in hand.

3. Welcome hard questions and difficult truths. Don’t blame a lawyer for questioning your case – convince them it has the necessary merit. If you have found a good lawyer and you can’t convince them, then maybe you don’t have a case. My first(successful) case involved a novel theory – fraud that was obvious to me but not something that the Department of Justice had pursued before. My attorneys dug deep into the facts of my case and did a lot of legal research before they felt comfortable it was viable. Initial skepticism can save years of wasted time if the facts and/or law don’t work in your favor.

4. Get an honest lawyer who’s had some success in the whistleblower arena. Before divulging any specific details to a prospective lawyer, make sure they run a conflict’s check first to ensure they don’t have an ulterior agenda. For example, they could already represent a client that has a similar case and could be trying to suck information out of you. If a lawyer purports to have recovered billions of dollars in whistleblower claims, ask them how much their relators’ shares have been. There are some great lawyers who represent whistleblowers, including some who are less well known but nonetheless very capable. Asking other whistleblowers who they recommend and then talking to the lawyers is always a good way to approach a potential attorney-client relationship. The key, however, is to find an attorney with good judgment quickly.

Also, don’t pay someone an hourly fee to represent you on a whistleblower case (unless they are only representing you in an employment case). The real whistleblower lawyers all work on a contingency fee basis — meaning you pay nothing unless you win. The only lawyers I ever heard of who charge an hourly rate are ones who don’t know what they are doing — or ones who think you don’t have a case but are happy to take your money.

5. Prepare for the long haul. Most defendants don’t settle easily, and they never fear press as much as you think they will. Many lawyers have told me that every whistleblower they talk to says “the company will settle this quickly to avoid the press.” They never do.
Continue reading