Monthly Archives: November 2013

SEC Issues Annual Report on Dodd-Frank Whistleblower Program for Fiscal Year 2012


November 30, 2012
SEC.gov

The first Annual Report on the Dodd-Frank Whistleblower Program shows that the SEC received 3,001 tips, complaints, and referrals from whistleblowers across the country and abroad in fiscal year 2012 (October 1, 2011 through September 30, 2012). The most common complaint categories related to corporate disclosures and financial statements (18.2%), offering fraud (15.5%) and manipulation (15.2%).  There were 143 enforcement judgments and orders issued during fiscal year 2012 that potentially qualify as eligible for a whistleblower award.

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Vantage Oncology LLC to Pay More Than $2.08 Million for Submitting False Medicare Claims

Written November 22, 2013 by Robert Lu

On Thursday, November 21, 2013, the Justice Department announced that Vantage Oncology LLC (Vantage) has agreed to pay the government more than $2.08 million to settle allegations that it submitted false claims to Medicare for radiation oncology services performed at its Illinois centers from 2007 through June 2012. Vantage owns and manages radiation oncology centers in multiple states, including two centers in Illinois.

The government alleged that Vantage double billed and overbilled Medicare for certain procedures, billed for services that lacked supporting documentation and improperly billed for radiation treatment provided to patients without proper physician supervision.

The settlement resolves a whistleblower lawsuit filed by former Vantage employee Suleiman Refaei under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. Refaei will receive $354,450.

The case is captioned United States ex rel. Suleiman Refaei v. Vantage Oncology, et al., Case No. 1:10-cv-833 (S.D. Ohio).

Robbins Geller Rudman & Dowd LLP Announces $48 Million Civil Settlement Resolving Whistleblower Lawsuits Between the Department of Justice and Ensign Group over Medicare Billing Fraud


November 20, 2013 — Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) today announced a $48 million settlement between Ensign Group, a California-based nursing home operator, and the U.S. Department of Justice, which resolves claims in two whistleblower lawsuits filed by former Ensign therapists, including one represented by Robbins Geller.  The whistleblower actions alleged that for more than a decade, from 1999 through 2011, Ensign Group and its subsidiaries submitted inflated bills to Medicare for services that either were unnecessary or never performed.  Both actions were filed in 2006 in federal court in Los Angeles, California: United States ex rel. Carol Sanchez v.

Ensign Group Inc., No. SACV 06-0643 CJC (ANx) (C.D. Cal.), and United States ex rel. Gloria Patterson v. Ensign Group Inc., No. SACV 06-6956 CJC (ANx) (C.D. Cal.).

Ms. Sanchez was represented by Robbins Geller attorney John Stoia, of counsel.  According to United States Attorney André Birotte Jr., the settlement is “one of the largest of its kind in United States history,” involving “a company that regularly bilked Medicare by submitting inflated bills.”

The whistleblower lawsuits were filed under the qui tam provisions of the False Claims Act, which entitles a private person to bring a lawsuit on behalf of the United States where the private person has information that the named defendant has knowingly violated the False Claims Act. Under the False Claims Act, the private person, also known as a “whistleblower,” is entitled to a share of the government’s recovery.

The settlement covered alleged fraud by Ensign Group and six of Ensign’s operating subsidiaries:  (1) Atlantic Memorial Healthcare Associates, Inc. d/b/a Atlantic Memorial Healthcare Center of Long Beach, California; (2) Ensign Panorama LLC d/b/a Panorama Gardens Nursing & Rehabilitation of Panorama City, California; (3) Ensign Whittier West LLC d/b/a/ The Orchard Post Acute Center of Whittier, California; (4) HB Healthcare Associates LLC d/b/a Sea Cliff Healthcare Center of Huntington Beach, California; (5) Southland Management LLC d/b/a Southland Care Center of Norwalk, California; and (6) Victoria Ventura Healthcare LLC d/b/a Victoria Care Center of Ventura, California.

Baptist Health Systems Settles False Claims Act Lawsuit for Over $3.6 Million

Written by Robert Lu

On November 18, 2013, the U.S. Attorney’s Office for the Western District of Texas announced that Baptist Health Systems has agreed to pay over $3.6 million to resolve allegations that it violated the False Claims act by submitting false claims for reimbursement under the Medicare program.   In June 2013, Tenet Healthcare Corp. had agreed to acquire Baptist Health Systems’ parent-company, Nashville-based Vanguard Health Systems, in a deal valued at more than $4 billion.

The lawsuit against Baptist Health Systems was filed by a whistleblower under the qui tam provisions of the False Claims Act, and alleged that Baptist Health Systems improperly filed certain Medicare claims that failed to disclose the patient in question was receiving treatment under another insurance policy.  Under the law, a healthcare provider (like Baptist) is required to disclose to Medicare that a patient has other insurance when it submits its claims to Medicare for reimbursement.  The settlement announced on November 18 resolves allegations of false claims submitted from 2003 to 2007.

The False Claims Act provides that a whistleblower will receive a portion of the settlement for bringing the problem to the attention of the government.  In this case, Norma Rivera, the whistleblower, received $661,500 as her share of the settlement.  In addition to paying $3,675,000 to the government, Baptist Health Systems paid Rivera’s attorneys’ fees and expenses.

Robbins Geller Rudman & Dowd LLP Represents Whistleblower in $48 Million Settlement with California Nursing Home Operator over Medicare Fraud

Written by Janine Arno

Robbins Geller Rudman & Dowd LLP represented a key whistleblower behind a $48 million settlement announced yesterday between Ensign Group, a California-based nursing home operator, and the U.S. Department of Justice.  The settlement resolves two whistleblower lawsuits filed by former Ensign therapists under the qui tam provisions of the False Claims Act.  The actions alleged that the Ensign Group submitted false Medicare claims for more than a decade, from 1999 through 2011.
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SEC Issues Annual Report on Dodd-Frank Whistleblower Program for Fiscal Year 2013

Written by Janine Arno

The second Annual Report on the Dodd-Frank Whistleblower Program shows that the SEC received 3,328 tips, complaints and referrals across the country and abroad in fiscal year 2013 (up 8% from 2012 where 3,001 in tips, complaints and referrals were received).  The most common complaint categories reported by whistleblowers in 2013 were Corporate Disclosures and Financials (17.2 percent), Offering Fraud (17.1 percent), and Market Manipulation (16.2 percent).   The whistleblower submissions were received from 55 foreign countries, with the United Kingdom leading in submissions for the most tips outside of the United States.

During fiscal year 2013, the SEC made nearly $15 million in award payments to whistleblowers under the SEC’s whistleblower program.    Since the inception of the SEC’s whistleblower program in August 2011, the SEC has granted awards to six whistleblowers and assures more awards are coming and at a faster pace.

The SEC Whistleblower Program provides for mandatory rewards to individuals who offer original information to the SEC that leads to an SEC enforcement action resulting in sanctions of more than $1 million.  The award size to whistleblowers ranges from 10 to 30 percent of the amount collected by the SEC (and in related actions). The law also includes provisions to protect the anonymity of the whistleblower if represented by counsel, and provisions to safeguard whistleblowers from retaliation.

California Jury Finds Pipe Manufacturer Liable in False Claims Act Case

Written November 16, 2013 by Robert Lu

On Thursday, November 14, 2013, a federal jury in California found J-M Manufacturing Inc.  knowingly manufactured and sold substandard PVC pipes to both federal and state government entities for water and sewage systems across the country from 1996 to 2006.  The unanimous verdict reached Thursday comes seven years after whistleblower John Hendrix alleged J-M, which is now called JM Eagle, violated the False Claims Act by selling products with shorter life spans than promised.
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CA Technologies Agrees to $11 Million Settlement in Whistleblower Overbilling Lawsuit

Written November 13, 2013 by Janine Arno

CA Technologies, online cialis a New York based Fortune 500 computer giant, agreed yesterday to pay $11 million to settle whistleblower allegations that it violated the federal False Claims Act and similar state and local statutes by improperly overcharging numerous public agencies on software renewal contracts.  Specifically, the action alleged that from 2011 through 2009, CA Technologies overcharged government customers when they renewed annual software maintenance protection plans, beginning to charge for the renewal plans immediately, though the prior years’ service plan hadn’t yet expired, resulting in double billing.

Out of the $11 million, the federal government will receive $8 million and the remainder will be divided among the District of Columbia and eight states:  California, Florida, Hawaii, Illinois, Massachusetts, New York, Nevada and Virginia.

The allegations settled were first asserted by a former technology sales specialist employee for CA Technologies in a whistleblower qui tam lawsuit filed on July 18, 2006, in the US District Court for the Eastern District of New York.  The whistleblower will receive approximately $2 million for her participation, according to court documents.

Supreme Court Considers Whistleblower Protections Under Sarbanes-Oxley Act

Written November 12, 2013 by Robert Lu

On Tuesday, November 12, 2013, the U.S. Supreme Court revisited the Enron Corp. collapse as the nine justices debated the scope of whistleblower protections in a key provision of the Sarbanes-Oxley Act, which was passed in 2002 in response to the Enron accounting scandal fraud that led to the company’s failure a year earlier.

The provision at issue at the Supreme Court protects people who expose the kind of corporate misdeeds that arose at Enron. But there is a dispute over whether that protection under the Sarbanes-Oxley Act covers only employees of publicly traded companies or also applies to contractors hired by the companies. The dispute pits business groups against President Barack Obama’s administration, which is seeking a broad interpretation of the whistleblower provision.

At oral argument on Tuesday, Justice Department lawyer, Nicole Saharsky, arguing on behalf of the administration, said that “[t]he statute protects an employee of a contractor from retaliation. That’s what the text says. That’s what Congress intended to cover, these accountants, lawyers and outside auditors who were so central to the fall of Enron.”

A decision by the Supreme Court is expected by spring 2014.

The case is Lawson v FMR, 12-3.  A copy of the transcript can be accessed here.