Articles Posted in New Jersey False Claims Act-Whistleblower Lawyer

Although the year has not ended, there have been a number of significant False Claims Act settlements. In fact, the nine largest settlements this year total over $700 million. What’s really shocking is the connection to the state of New Jersey in the largest of the settlements.

To answer the above question, the largest three whistleblower cases this year all have connections to New Jersey and, further, four out of the top five settlements had a connection to New Jersey as well.

The largest settlement this year involved Ranbaxy, Inc., based in Princeton New Jersey. The settlement was $500 million. The second largest settlement involved New Jersey based C.R. Bard. The Bard settlement exceeded $48 million. Coming in “third place” was Par Pharmaceuticals based in Woodcliff Lake, New Jersey. Par settled for $45 million.

In following the settlements, by size, a plastic surgeon from Florida came in fourth place settling for $26.1 million.

In fifth place was CH2M Hill, with offices in Parsippany and Paterson, New Jersey. Hill settled for $18.5 million.

The False Claims Act provides for a payment to the individual that provides the first information to the United States government involving fraud. Although there are specific requirements, the person reporting the information to the government must have unique information that the government did not previously possess. In all of the above cases, the individual or individuals that reported the information to the federal government received rewards in excess of 15% of the amount recovered by the United States government. Needless to say, these rewards represent a strong incentive to report the fraud beyond the obvious motive of “doing the right thing”.
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Recently, there have been a number of articles on the New Jersey School Construction Corporation. The original “SCC” was charged with building schools in areas of need. However, many years later we are left to wonder about the success of the program. Pundits say that hundreds of millions of dollars have been spent, with no real accounting. Supporters feel that schools have been completed in areas that might not have been otherwise helped.

The original “SCC” was abolished in 2007 and replaced by the School Construction Authority.

Governor Christie recently stopped payments on a Burlington County high school. The reason; the $27 million project was $17 million over budget. Where does all the money go? Some goes to acquiring property. However, in Gloucester City $13 million was spent acquiring 70 properties and no school has been built. In Camden, 34 properties were acquired and no school there either.

UPCODING AND OTHER HOSPITAL FRAUD

Over the past couple of weeks, the Federal Courts have passed on a spate of fraud allegations against hospitals. In the past, New Jersey hospitals have been hit with similar claims and, in fact, some New Jersey hospitals have settled with the Federal Government for these allegations of fraud. The claims allege what amounts to improper or inflated billing practices. The terms of art for inflated billing is “upcoding”. Upcoding is basically where the hospital bills for a procedure which may have been more intricate and provides for a larger reimbursement from the Federal Government. The “upcoding” refers to a different billing “code” that the Federal Government assigns to certain procedures. By submitting a claim for a more difficult or intricate procedure, the hospital is reimbursed a larger amount of money. Although there are variants on this upcoding issue, a qualified fraud attorney can explain the intricacies.

“Upcoding” can occur in hospitals as well as physician’s offices, nursing homes or, for that matter, dental offices and counselors’ offices. The upcoding can come in the form of billing for a more difficult procedure but it can also come in the form of billing for a longer procedure. For example, a false claim was brought against a counselor for billing for one-hour sessions when in fact the sessions were only lasting 45 minutes. After the fraud was reported, the investigators engaged in some simple math. The accumulation of the hours billed by the professional far exceeded that which was possible.

Kid Brand announced the termination of two executives because of problems involving underpayment of customs duty on furniture. The New Jersey company appears to owe as much as $7 million to U.S. Customs.
The allegation against the company, and subsidiary LaLobi, relates to duty that should have been paid on furniture manufactured in China. The duty is owed because of what is referred to as “anti-dumping” provisions. “Dumping” is a practice where a manufacturer sells a product at or below the actual production cost. The Customs Service imposes the duty to “level the playing field” for U.S. manufacturers.
It has not yet been disclosed how the information came to the attention of Custom officials. However, if the information was brought to the officials’ attention by a “whistleblower” the Federal Government will be paying a “relator fee” of up to 30%. It is unusual for the government to pay the full 30%. Rewards of 15-20% are not unusual. If a relator is involved a reward of around $1.4 million can be expected.

A telecommunications company paid $16.5 Million for improper billing practices. Avaya, a New Jersey-based company, billed governmental agencies for telephone equipment that either didn’t work or had been replaced. A concerned individual brought the improper conduct to light. Under the Federal Whistleblower Statute, the individual will be paid for providing the information. Although it has yet to be announced, the amount paid to the person disclosing the information will exceed $ 3 million. If you know of improper billing practices like this, call us.