US
qui tam
Europe
Australia 1
Australia 2
Canada
Asia
related
Guides:
Secrecy
Censorship
Governance
related
Profiles:
Human
Rights
Aust
Constitution
& Cyberspace
Defamation
|
qui tam
This page highlights some US qui tam whistleblowing
cases.
It
supplements the discussion
of whistle-blowing and secrecy.
 Alderson,
HCA and Medicare fraud
US hospital financial officer Jim Alderson gained over
US$20 million under the 1986 False Claims Act
after the federal government recovered US$1.7 billion
from HCA, formerly Columbia/HCA. Alderson became a whistleblower
after he was fired from his accounting job over disquiet
regarding the company keeping two sets of records for
Medicare reimbursements.
Maxwell
and Kerr-McGee
In 2005 Bobby Maxwell filed a qui tam federal
court suit against Kerr-McGee Corporation. He had won
public commendation from superiors as a leading Interior
Department auditor, dealing with royalty payments for
extraction of oil and gas from public land. Maxwell alleged
that major producers had short-changed the government;
his job was eliminated in a reorganisation a week after
a federal judge in Denver unsealed his claims that royalty
payments had been evaded.
In 2006 the Department's inspector general provided a
scathing report to Congress, commenting that its royalty
data is often inaccurate, officials are overreliant on
statements by oil companies rather than actual records
and that less than 10% of oil and gas leases are being
reviewed. That report undermined claims by senior Interior
officials that the department is aggressively pursuing
underpayments and outright cheating by companies.
In April 2007 a federal judge in Denver overturned a jury's
verdict in favor of Maxwell, ruling that he was not eligible
to sue Kerr-McGee as a private citizen because he had
gathered most of his evidence while on the job. The judge
did not question the jury's verdict that Maxwell had uncovered
cheating by Kerr-McGee but indicated that Maxwell failed
a crucial technical requirement under the False Claims
Act. Maxwell is expected to appeal, in a case likely to
go to the Supreme Court.
Miller
and Halbert
In 2007 three companies associated with US civil engineering
czar Bill Harbert were found
guilty by a jury of rigging bids for US-funded water and
sewer system contracts in Egypt during the 1980s, being
hit with a U$34.34 million in damages (tripled under the
False Claims Act for an award of US$103 million).
The litigation was brought on the evidence of whistleblower
Richard Miller, a former executive with a contractor that
was involved in the bid rigging scheme. Miller stands
to collect between 15% and 30% of the damages.
Marchese
and Cell Therapeutics
In 2007 former pharmaceutical sales representative James
Marchese was awarded US$1.6 million after blowing the
whistle on a drug marketing fraud, despite efforts by
the federal Justice Department to prevent him receiving
the money.
Judge Pechman of the Federal District Court in Seattle
criticised Marchese for not alerting federal authorities
more quickly, noting that after he was passed over for
a promotion he wrote an angry letter to his superiors
at Cell Therapeutics, taking credit for the very actions
that he later identified as causing harm to cancer patients.
In 2002, after another falling-out with his superiors,
he went to the Food & Drug Administration. In 2007
the company agreed to pay US$10.5 million to settle charges
that it had defrauded Medicare in connection with sales
of the Trisenox cancer drug.
Marchese argued that he should receive 25% of that settlement,
maintaining that the government would not have had a case
without him. Judge Pechman awarded him the minimum 15%,,
noting that he "provided the government with evidence
of fraudulent activity that the government would not otherwise
have discovered".
Lisitza
and Walgreen
In 2008 pharmacy chain Walgreen agreed to pay US$35 million
to settle a federal whistleblower suit featuring claims
that it grossly overcharged Medicaid for prescriptions.
The setkement would be shared by the whistleblower, the
federal government, 42 states and Puerto Rico. Pharmacist
Bernard Lisitza, the whistleblower, was expected to receive
around US$5 million.
Walgreen denied any wrongdoing, commenting that it reached
the agreement merely "to avoid the expense and uncertainty
of litigation and to resolve all of the government's claims".
Omnicare agreed in 2006 to pay US$49.5 million; CVS Caremark
agreed in 2008 to a US$36.7 million settlement.
scale
Some sense of federal and state government use of qui
tam is provided by the following settlements -
- US$840m
settlement with HCA (2000) resolves eleven out of thirty
consolidated qui tam suits alleging fraudulent cost
reporting and improper kickbacks. HCA subsequently agreed
to pay a further US$625m to settle additional qui tam
suits alleging fraud regarding cost reports to Medicare,
kickbacks to doctors and false claims arising from operation
of the hospital chain's wound care centers.
- US$182m
settlement with Roche Biomedical Laboratories (1996)
regarding allegedly unnecessary clinical tests sold
to doctors and billed to Medicare and Medicaid
- US$325m
settlement with SmithKline Beecham (1997) regarding
allegedly unnecessary clinical tests sold to doctors
and billed to Medicare and Medicaid
- US$559m
settlement with TAP Pharmaceuticals (2001) regarding
alleged conspiracy with doctors to bill Medicare for
drug samples, kickbacks to providers and inflated pricing
of prostrate cancer drug Lupron. TAP paid a further
US$290m in criminal fines and a civil payment to fifty
states of US$25m
- US$170m
from nursing home operator Beverly Enterprises (2000)
regarding alleged false billings to Medicare
- US$76m
from General American Life Insurance (2001) regarding
alleged improper approval of claims for federal Medicare
funds
- US$85m
settlement with hospital management chain Quorum Health
Group (2001) regarding allegations of non-reimbursable
costs in annual cost reports and use of secret set of
cost report reserves identifying improper claims in
case scheme was discovered
- US$385m
civil settlement and US$110m criminal fines paid by
Fresenius Medical Care regarding five qui tam lawsuits
alleging wrongdoing by kidney dialysis subsidiary
- US$54m
settlement with Boeing (2000) to resolve allegations
that it placed defective transmission gears in army
helicopters
- US$40m
settlement by Salomon Smith Barney (2000) in bond-pricing
dispute.
next page
(European whistleblowing cases)
|
|
blaw