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Archive for February, 2012

Federal Government Recovers $4.1 Billion in Healthcare Fraud Judgments Last Year

Monday, February 27th, 2012

Federal authorities say they recovered $4.1 billion in healthcare fraud judgments last year.  The amount represents the highest annual amount ever recovered from individuals and companies who attempted to defraud seniors and taxpayers or who sought payments to which they were not entitled.  “These efforts reflect a strong, ongoing commitment to fiscal accountability and to helping the American people at a time when budgets are tight,” U.S. Attorney General Eric Holder said in a statement.

Of the $4.1 billion recovered, approximately $2.4 billion was recovered through civil health care fraud cases brought under the False Claims Act (FCA).  The False Claims Act remains one of the government’s most powerful weapons in its fight against healthcare fraud.  Since January 2009, the DOJ has used the False Claims Act to recover more than $6.6 billion in federal healthcare dollars.  Cases brought under the FCA that contributed to the $2.4 billion recover included unlawful pricing schemes by pharmaceutical manufacturers, illegal marketing of medical devices and pharmaceutical products for uses not approved by the FDA, Medicare fraud by hospitals and other institutional providers, and violations of laws against self-referrals and kickbacks.

These results signify the continued efforts by the government to identify and punish fraud perpetrators who are abusing this country’s healthcare system, and costing American taxpayers billions of dollars.  “Fighting fraud is one of our top priorities and we have recovered an unprecedented number of taxpayer dollars,” Department of Health and Human Services Secretary Kathleen Sebelius said in a statement.  “Our efforts strengthen the integrity of our health care programs, and meet the president’s call for a return to American values that ensure everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules.”

The $4.1 billion stolen or otherwise improperly obtained from federal health care programs was recovered and returned to the Medicare Trust Funds, the Treasury and others in FY 2011.

For more information, view the Department of Justice’s full press release at http://www.fbi.gov/news/pressrel/press-releases/health-care-fraud-prevention-and-enforcement-efforts-result-in-record-breaking-recoveries-totaling-nearly-4.1-billion.

If you have knowledge of Medicare or Medicaid fraud and would like to discuss the possibility of a whistleblower award under the False Claims Act, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.

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SEC WHISTLEBLOWER PROGRAM ISSUES FIRST ANNUAL REPORT

Tuesday, February 21st, 2012

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), amended the Securities Exchange Act of 1934 (the “Exchange Act”) by, among other things, adding a provision to provide for a whistleblower program under the Securities and Exchange Commission (“SEC”).  Specifically, § 21F directed the Commission to make monetary awards to eligible individuals who voluntarily provide original information that leads to successful Commission enforcement actions resulting in the imposition of monetary sanctions over $1,000,000, and certain related successful actions.  Awards are required to be made in the amount of 10% to 30% of the monetary sanctions collected, and are to be paid from the Commission’s Investor Protection Fund (the “Fund”).  On August 12, 2011, the Final Rules implementing the processes and procedures for the whistleblower program became effective.

In November 2011, the SEC Office of the Whistleblower issued its first annual report (available here) detailing its success during a shortened fiscal year 2011.  Notably, according to the annual report, in the seven weeks after the law took effect in August, the SEC received an impressive 334 tips with market manipulation, corporate disclosures, and offering fraud standing out as the most common complaint categories.  Further, submissions came from individuals in 37 states as well as several foreign countries.

While the program is still in its infancy, the responsiveness of its agents and staff, as well as the leadership of Director Sean McKessey, suggests that it will only gain momentum in 2012.

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Budget Requests Indicate Continued Commitment to Reducing Fraud

Monday, February 20th, 2012

Earlier this week, U.S. Attorney General Eric Holder announced that President Obama’s FY 2013 Budget proposal calls for $27.1 billion for the Department of Justice.  The request includes program increases for critical administration priorities, including $55 million to investigate and prosecute financial and mortgage crimes, which remains among the DOJ’s key priorities.

The budget request illustrates the DOJ’s continued commitment to investigating and prosecuting financial fraud, by seeking to strengthen the department’s ability to pursue large-scale fraud investigations.  The increased resources will support the DOJ’s investigation and prosecution of various forms of financial fraud, including securities and commodities fraud, investment scams, and mortgage foreclosure schemes.

The proposed program increase of $55 million for financial and mortgage fraud initiatives is designed to complement ongoing efforts to identify and eradicate various forms of fraud, including healthcare fraud.  The Department of Health and Human Service has requested, from the FY 2013 Budget, an additional $71.7 million to target healthcare fraud.  This increase will strengthen and expand the DOJ and Medicare Fraud Strike Forces, support the expansion of civil litigation efforts in areas such as pharmaceutical fraud and off-label marketing, and provide additional resources to eliminate abuse and substandard care in public health care facilities and long-term care facilities funded by Medicare and Medicaid.

For more information, view the Financial and Mortgage Fraud Fact Sheet and the Health Care Fraud Fact Sheet at http://www.justice.gov/jmd/2013factsheets/

If you have knowledge of Mortgage or Healthcare fraud and would like to discuss the possibility of a whistleblower award under the False Claims Act, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.

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WHISTLEBLOWER CASES FILED PRO SE RISK DISMISSAL

Friday, February 17th, 2012

The United States District Court for the District of Nevada recently held that qui tam relators cannot proceed with a case brought pursuant to the False Claims Act (“FCA”) without representation of counsel when the United States declines to intervene in the case.  The opinion can be found at Malone v. Ohama Housing Auth., 2011 WL 1435257 (D. Neb. April 14, 2011).  In Malone, the court recognized that the FCA is silent on whether a whistleblower can proceed pro se; however, the court relied controlling precedent within the Court of Appeals for the Eight Circuit, United States v. Onan, 190 F.2d 1, 6-7 (8th Cir. 1951), in making its ruling.  In Onan, the Eight Circuit held:

[W]e do not think that Congress could have intended to authorize a layman to carry on such suit as attorney for the United States but must have had in mind that such a suit would be carried on in accordance with the established procedure which requires that only one licensed to practice law may conduct proceedings in court for anyone other than himself…it is unthinkable that Congress by this Act intended to license laymen to practice law. The practice of law is affected with a public interest and an attorney at law as distinguished from a layman, has both public and private obligations, being sworn to act with all good fidelity toward both his client and the court.

Id.

The Malone court went on to state that the Eight Circuit’s ruling in Onan, supra, has been adopted in numerous other federal court courts, including the Second, Seventh, Ninth, Eleventh, and D.C. Circuits.  Malone, 2011 WL 1435257 at * 1(citing Jones v. Jindal, No. 10-7124, 2011 WL 588062, at *1 (D.C. Cir. Feb. 10, 2011); Meidinger v. Healthcare Indus. Oligopoly, 391 F. App’x 777, 780 (11th Cir. 2010); United States ex rel. Mergent Servs. v. Flaherty, 540 F.3d 89, 93-94 (2d Cir. 2008); Timson v. Sampson, 518 F.3d 870, 873-74 (11th Cir. 2008); Stoner v. Santa Clara County Office of Educ., 502 F.3d 1116, 1126-28 (9th Cir. 2007); United States ex rel. Lu v. Ou, 368 F.3d 773, 775-76 (7th Cir. 2005), overruled on other grounds, 129 S.Ct. 2230 (2009)). 

While the Malone court left open the possibility that a relator who is also an attorney may proceed without counsel, in that case, because the relator was a non-attorney, the court dismissed the whistleblowers lawsuit.  Malone, 2011 WL 1435257 at * 2.

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