According to the United States Attorney for the Northern District, David E. Nahmias, the government recovered $14.4 million from civil debtors in fiscal year 2007 (which ended on September 30, 2007).
Some of the larger collections were: the Morehouse Medical Associates, Inc. settlement ($1.525 million); the Northside Hospital qui tam settlement ($6.3 million) and the collection matter of United States v. David T. Kent ($500,000).
Relators were awarded $177 million for their work in stopping fraud against the United States government. Whistleblower relators get 15 to 25 percent of the proceeds if the United States intervenes, and up to 30 percent if the United States declines and the relator pursues the action alone.
Peter D. Keisler, Acting Attorney General and Assistant Attorney General for the Civil Division, said: “It also attests to the fortitude of whistleblowers who report fraud and the tireless efforts of the civil servants who investigate and prosecute these cases.”
Health care fraud accounted for the largest percentage of the judgments -- $1.54 billion. “This number includes both whistleblower claims and those initiated by the United States in independent fraud investigations.” The biggest recoveries were for fraud against the Department of Health and Human Services, largely under Medicare and Medicaid programs. The government also recovered for fraud against the Office of Personnel Management, which administers the Federal Employees Health Benefits Program, the Department of Defense for its TRICARE insurance program, the Department of Veterans Affairs, and others.
http://www.usdoj.gov/opa/pr/2007/November/07_civ_873.html
Bristol-Myers Squibb Co., Aventis Pharmaceuticals, Inc., Medco Health Solutions, Inc., Purdue Pharma L.P. and Purdue Frederick Co., and InterMune, Inc. paid more than $800 million of the $1.5 billion. State Medicaid programs also recovered $264 million for pharmaceutical fraud.
The government touted its “Department-wide effort” to stop fraud in the pharmaceutical industry. “Typical allegations involve illegal promotion of drugs or devices and causing the government to pay for uses that were neither found by the Food and Drug Administration to be safe and effective, nor supported by the medical literature, also known as “off-label” marketing; paying kickbacks to physicians, wholesalers, and pharmacies to induce drug or device purchases; establishing inflated drug prices knowing that federal health care programs use these prices to reimburse providers, then marketing the “spread” between the federal reimbursement and the provider’s lower cost to induce drug purchases; and failing to report the company’s true “best price” for a drug to reduce rebates owed to the Medicaid program.” http://www.usdoj.gov/opa/pr/2007/November/07_civ_873.html
Recoveries for other agencies:
Department of Defense: $48.4 million
General Services Administration:
Burlington Resources, Inc., a subsidiary of Conoco Phillips, paid $105.3 million based on claims that it had underpaid natural gas royalties to the Department of Interior. Oracle Corporation paid $98.5 million to resolve allegations that PeopleSoft, Inc. (acquired by Oracle in 2005) engaged in defective pricing of its software and services under the company’s multiple award schedule with GSA. Mellon Bank, N.A. paid $34.6 million to settle claims that it violated its contract with the Internal Revenue Service to process individual income tax returns and payments.
Trials:
The Department of Justice tried two whistleblower cases, and won both.
(1) $172 million judgment against Amerigroup, Illinois Inc. Whistleblowers alleged that Amerigroup’s HMO in Illinois illegally increased its profits by discriminating against pregnant women and individuals with pre-existing medical conditions when enrolling Medicaid-eligible applicants. Amerigroup is appealing.
(2) $90 million judgment against several companies for conspiring to rig bids on contracts financed by the U.S. Agency for International Development for the construction of wastewater treatment facilities in Cairo, Egypt.
http://www.usdoj.gov/opa/pr/2007/November/07_civ_873.html
