False Claims Act

Virginia-based Science Applications International Corporation (SAIC) has paid $11.75 million to resolve allegations that the company violated the False Claims Act by charging inflated prices against grant money provided by the U.S. government to train first responder personnel to prevent and respond to terrorist attacks, the U.S. Department of Justice announced last week.

SAIC received federal grant money through the New Mexico Institute of Mining and Technology to provide course management, development, and instruction to first responder personnel to prevent and respond to terrorist attacks involving explosive devices.  The United States alleged that SAIC’s cost proposals falsely represented that SAIC would use far more expensive personnel to carry out its efforts than it intended to use and actually did use, resulting in inflated charges to the United States.

The lawsuit was originally filed by Richard Priem, SAIC’s former project manager for the first responder training program, under the whistleblower provisions of the False Claims Act.  Under the False Claims Act, a private citizen with knowledge of fraud against the government can sue on behalf of the government and share in the recovery.  Priem’s share has not yet been determined.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

American Commercial Colleges Inc. (ACC), a Texas-based for-profit corporation, has agreed to pay the United States government up to $2.5 million, including interest, to resolve allegations that they knowingly submitted or caused the submission of false claims to federal student aid programs, the U.S. Department of Justice announced last week.

In order to be eligible for federal student aid programs authorized by Title IV of the Higher Education Act of 1965, for-profit colleges such as ACC must obtain no more than 90 percent of their annual revenues from Title IV student aid programs.  The other 10 percent of their revenue must come from other sources, such as student payments or private loans.  ACC allegedly violated the False Claims Act when it orchestrated certain short-term private student loans that ACC repaid with federal Title IV funds.  The short-term loans at issue in this case were not sought or obtained by students on their own; the United States contends ACC orchestrated the loans for the sole purpose of manipulating its 90/10 Rule calculations.

Under the terms of the settlement, ACC will pay the United States $1 million, plus interest, over five years, and could be obligated to pay an additional $1.5 million under the terms of the agreement.

The lawsuit was originally brought by Shawn Clark and Juan Delgado, former directors of ACC campuses in Odessa and Abilene, Texas, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud perpetrated against the government to sue on behalf of the government and share in the recovery.  Clark and Delgado will receive $170,000 of the $1 million fixed portion of the government’s recovery, and an additional $255,000 if ACC becomes obligated to pay the maximum $1.5 million contingent portion of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

ISTA Pharmaceuticals has pleaded guilty to federal felony charges of conspiracy to introduce a misbranded drug into interstate commerce and conspiracy to pay illegal remuneration in violation of the Federal Anti-Kickback Statute, the U.S. Department of Justice announced last week.  In addition to criminal fines and asset forfeiture, ISTA has also entered into a civil settlement for knowingly submitting or causing the submission of false claims to federal health care programs.

Under the Food, Drug and Cosmetic Act (FDCA), it is illegal for a drug company to introduce into interstate commerce any drug that the company intends will be used for purposes not approved by the Food and Drug Administration (FDA).  Xibrom is approved by the FDA to treat pain and inflammation following cataract surgery; however, some ISTA employees promoted Xibrom for unapproved new uses, including the use of Xibrom following Lasik and glaucoma surgeries, and for the treatment and prevention of cystoid macular edema.  Some ISTA employees were told by management not to write down certain interactions with physicians regarding unapproved new uses, and not to leave certain printed materials in physicians' offices relating to unapproved new uses, in order to avoid detection.

ISTA also pled guilty to a conspiracy to knowingly and willfully offer or pay remuneration to physicians to induce those physicians to prescribe Xibrom, in violation of the federal Anti-Kickback Statute.  Certain ISTA employees provided physicians with free Vitrase, another ISTA product, with the intent to induce such physicians to refer individuals to pharmacies for Xibrom.  ISTA also provided other illegal remuneration, including sponsoring an event for a non-profit group associated with a particular physician, a golf outing, a wine-tasting event, paid consulting or speaker arrangements, and honoraria for participation in advisory meetings which were intended to be marketing opportunities.  ISTA agreed to pay $18 million to the federal government under the terms of its plea agreement.

ISTA also agreed to pay $15 million to resolve civil allegations regarding its marketing of Xibrom, which caused false claims to be submitted to government health care programs.  The United States alleged that ISTA's violations of the Anti-Kickback Statute resulted in false claims being submitted to federal health care programs.

In addition to the above, ISTA’s parent company, Bausch+Lomb (B+L), has also agreed to enter into a corporate integrity agreement to prevent future violations.

The lawsuit was originally filed by two whistleblowers under the False Claims Act.  One of the whistleblowers, Keith Schenkel, was a former employee of ISTA.  The False Claims Act allows private citizens with knowledge of fraud to sue on behalf of the government and share in the recovery.  Schenkel will receive $2.5 million as his share of the civil settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

Texas-based U.S. Renal Care has agreed to pay $7.3 million to resolve allegations that their subsidiary, Dialysis Corporation of America (DCA), violated the False Claims Act by knowingly submitting false claims to the Medicare program for more medication than was actually administered to dialysis patients, the U.S. Department of Justice announced today.

Epogen is an intravenous medication that is used to treat anemia, a common condition afflicting patients with end-stage renal disease.  Epogen vials contain a small amount of medication in excess of the labeled amount, known as “overfill,” to compensate for medication that may remain in the vial after extraction and in the syringe upon administration.  The United States contends that DCA billed for 10‑11% overfill whenever it administered Epogen; however, the types of syringes DCA used did not allow DCA to withdraw and administer 10‑11% overfill every time it administered Epogen to patients.  Thus, DCA submitted false claims to Medicare that overstated the amount of Epogen that it was actually providing.

The lawsuit was originally filed by Laura Davis, a nurse at one of DCA’s facilities, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud to sue on behalf of the government and claim a share in the recovery.  Davis will receive $1,314,000 as part of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

New Jersey-based C.R. Bard has agreed to pay the U.S. government $48.26 million to resolve allegations that it knowingly caused false claims to be submitted to Medicare for brachytherapy seeds used to treat prostate cancer, the U.S. Department of Justice announced this week.

The United States alleged that from 1998 to 2006, Bard violated the Anti-Kickback Statute when the company provided illegal remuneration to customers and physicians to induce them to purchase Bard’s seeds, in the form of certain grants, guaranteed minimum rebates, conference fees, marketing assistance and/or free medical equipment.  Hospitals ultimately submitted bills to Medicare for these seeds, which the government alleged were rendered false by Bard’s illegal kickback activity. The government alleged that Bard was liable under the False Claims Act for causing the submission of those false claims.

The lawsuit was filed by Julie Darity, a former Bard manager for brachytherapy contracts administration, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud to sue on behalf of the government and share in the recovery.  Darity will receive a little over $10 million as her share of the civil settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.