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Posts Tagged ‘Department of Justice’

Arkansas Orders J&J to Pay $1.1 Billion over Risperdal Marketing

Wednesday, April 11th, 2012

Wednesday, April 11, 2012-  An Arkansas judge ordered Johnson & Johnson to pay $1.1 billion after a jury found that the company’s Risperdal marketing campaign violated the state’s consumer-protection laws.  Specifically, the jury found that J&J downplayed and hid risks- diabetes and weight gain- associated with taking its antipsychotic drug.

Circuit Judge Tim Fox determined that J&J and its subsidiary, Janssen Pharmaceuticals Inc., committed nearly 240,000 violations of the state’s Medicaid fraud law — or one for each Risperdal prescription issued to state Medicaid patients over a 3 1 / 2-year period.  Each violation carried a $5,000 fine, the state’s mandatory minimum amount, bringing the total to more than $1.1 billion.

Judge Fox issued an additional $11 million fine for more than 4,500 violations under the state’s deceptive practices act.

Arkansas Attorney General Dustin McDaniel issued a statement, claiming that today’s verdict “sends a clear signal that big drug companies like Johnson & Johnson and Janssen Pharmaceuticals cannot lie to the [FDA], patients and doctors in order to defraud Arkansas taxpayers of our Medicaid dollars.”

Arkansas is one of several states who have sued J&J over its marketing of Risperdal, yet the Arkansas penalty is the largest to date against J&J.  In 2010, jurors in Louisiana ordered the drug manufacturer to pay almost $258 million to state officials for making misleading claims about the drug’s safety.  Less than a year later, in June 2011, a South Carolina judge upheld a $327 million civil penalty against the company.  Most recently, in January 2012, Texas reached a $158 settlement with the company, which did not admit fault in connection with the settlement.

Shortly after the verdict, Janssen issued a statement indicating its intent to appeal the verdict, which would be heard by the Arkansas Supreme Court.

The United Stated continues to investigate the sales practices of J&J and Janssen related to Risperdal, including allegations that the company marketed the drug for unapproved uses.  “Johnson & Johnson needs to wake up and realize they are playing a losing game.  They should be running, not walking, to the settlement table,” said Patrick Burns of Taxpayers against Fraud. “[The Department of Justice] offered a global settlement for $1.8 billion last month.  I am not sure that deal is going to stay on the table after this.”

If you have knowledge of 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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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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Blowing the Whistle on Foreign Corrupt Practices Act Violations

Tuesday, July 26th, 2011

The Securities and Exchange Commission (SEC) whistleblower program provides for rewards for individuals who provide the government with information about violations of the Foreign Corrupt Practices Act (FCPA) of 1977.

The FCPA was enacted in 1977 in an effort to end the practice of multinational corporations obtaining business abroad by bribing foreign officials.  The Act covers any U.S. company or citizen doing business abroad.  It covers foreign companies — and their directors, officers, stockholders, employees and agents — with reporting and registration requirements under the Securities and Exchange Acts as well as any foreign person or company acting within the United States.

The FCPA makes it unlawful to bribe a foreign government official to obtain or retain business.  The Act prohibits U.S. companies and individuals from paying money or any other sort of inducement, including an offer or promise to pay money or anything of value, to a foreign official with the intent to influence a decision or action affecting that company’s business.

A foreign official is defined as “any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.”

The Department of Justice (DOJ) is the chief enforcement agency, with a coordinate role played by the SEC. The DOJ is responsible for all criminal enforcement and for civil enforcement of the anti-bribery provisions with respect to domestic concerns and foreign companies and nationals. The SEC, on the other hand, is responsible for civil enforcement of the anti-bribery provisions with respect to issuers.

The FCPA provides for criminal and civil penalties. The criminal penalties include fines on officers, directors, stockholders, employees and agents of up to $250,000 and up to five (5) years in prison. Meanwhile, corporations and other business entities can face criminal fines of up to $2 million, or alternatively twice the amount of ill-gotten profits. The civil fines under the FCPA include $10,000 against any violating company and individual. Moreover, the SEC may also require a disgorgement of profits.

In the past few years, prosecutions under the FCPA have dramatically increased. The SEC has established an enforcement unit, targeting violations of the FCPA by U.S. issuers. The DOJ has similarly assigned prosecutors and FBI agents exclusively to the FCPA. The federal authorities have also instituted more aggressive investigative tactics in their pursuit of FCPA violations.

The DOJ and the SEC recently settled with Johnson & Johnson (J&J) for $71 million. J&J agreed to pay $21.4 million in criminal penalties as part of a deferred prosecution agreement. J&J additionally settled a related matter filed by the SEC agreeing to more than $48.6 million in disgorgement of profits and pre-judgment interest. The $71 million aggregate settlement by J&J registers as just the 10th largest FCPA-related settlement since 2008.

The top nine FCPA related settlements are as follows: (1) Siemens for $800 million in 2008; (2) KBR/ Halliburton for $579 million in 2009; (3) BAE for $400 million in 2010; (4) Snamprogetti Netherlands B.V. for $365 million in 2010; (5) Technip S.A. for $338 million in 2010; (6) JGC Corp. for $218.8 million in 2011; (7) Daimler AG for $185 million in 2010; (8) Alcatel-Lucent for $137 million in 2010; and (9) Panalpina for $81.8 million in 2010.

If you have knowledge of an FCPA violation or other securities law violations and would like to discuss the possibility of a whistleblower award under the SEC or CFTC whistleblower programs, 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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FY 2010 A Positive One for Combating Health Care Fraud

Wednesday, March 9th, 2011

In response to a formal inquiry by Senators Charles Grassley (R-IA) and Patrick Leahy (D-VT), on January 24, 2011, the Department of Justice (“DOJ”) and Health and Human Services (“HHS”) issued a joint response detailing the nature and scope of False Claims Act cases both under seal and resolved by the Department of Justice as of January 4, 2011.

According to the response letter, as of January 4, 2011, there were 1,341 qui tam cases under investigation, 885 of which allege some form of health care fraud.  Of those 885 cases, 867 actually involve Medicare or Medicaid.  Although, there have been no intervention decisions as to any of the aforementioned cases, the sheer volume of cases pending appears to suggest that Americans are becoming less tolerant of fraud and more willing to step forward.

Impressively, over the course of the last five years, the Civil Division of the Department of Justice, in connection with United States Attorneys’ offices, has obtained 541 settlements and judgments in qui tam actions totaling approximately $9.6 billion.  Further, since the beginning of the 2011 fiscal year alone, the Civil Division has obtained 19 settlements and judgments totaling more than $1.2 billion.

In addition to the civil fines and penalties, the joint response also addresses DOJ’s tendency to favor parallel civil and criminal proceedings when it is in the best interest of the United States.  By way of example, the response points to the area of pharmaceutical fraud which, since January 2009, has resulted in the recovery of more than $3 billion in criminal fines, forfeitures, restitution, and disgorgement, as well as 26 convictions.

While there is always room for improvement, ultimately, FY 2010 rendered impressive statistics in the ongoing effort to combat health care fraud, including a 16% increase over FY 2009 in the number of defendants charged.

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