Whistleblower Lawyer Blog

The major new "health care" law that the President signed this week, the Patient Protection and Affordable Care Act (Public Law 111-148), includes increased efforts to combat health care fraud and abuse, especially fraud in the Medicare and Medicaid programs.

It was significant that, on the very same day that this law took effect, an outstanding group of government prosecutors and investigators brought to an efficient conclusion a $12 million recovery of funds in a qui tam whistleblower case alleging health care fraud in violation of the False Claims Act. The case was brought by our firm, Finch McCranie, LLP, the Simpson Firm, LLC, and James G. Gustino, P.A..

The next day, after a meeting in Washington with the Department of Justice on another False Claims Act case, I sat in on the Senate debate of amendments to the new health care law. Whatever differing views may exist about many of the new law's provisions, all taxpayers agree that stopping fraud in health care is an essential step to preserving scarce health care dollars.

We are proud to have been able to work with an excellent government team of lawyers and investigators in helping recover this $12 million for the American taxpayers. They are Renee Brooker and Eva Gunasekera of the Department of Justice, Ralph Hopkins of the U.S. Attorney’s Office for the Middle District of Florida, and Special Agent Robert Murphy of HHS-OIG.

A description of the case is below:

Melbourne Internal Medicine Associates (MIMA) of Brevard County, Florida, will pay $12 million to resolve a whistleblower lawsuit alleging hidden schemes to defraud Medicare and other federal programs in connection with radiation cancer treatment. This whistleblower case was successfully pursued by Finch McCranie, LLP and Simpson Law Firm, LLC, both of Atlanta.

After investigating the whistleblower’s claims, the U.S. Department of Justice joined the lawsuit and filed its own complaint alleging a sustained fraudulent course of conduct by the MIMA Cancer Center and its former Medical Director, Todd Scarbrough, MD. The government’s complaint contended that MIMA submitted millions of dollars of claims for radiation oncology services that were provided without required physician supervision, were never provided at all or were otherwise improper, and sought to hide the fraud through “sham” practices. The complaint also alleged that executives at MIMA were aware of a substantial number of the fraudulent billing practices.

“Health care fraud is incompatible with patient safety,” said Michael A. Sullivan, attorney with Finch McCranie, LLP, and author of the leading whistleblower blog www.whistleblowerlawyerblog.com. “These doctors were paid for personally supervising radiation treatments for cancer patients, but did not provide the supervision that they gave the appearance of providing. How would patients feel to learn that their doctor’s ‘supervision’ of a potentially dangerous radiation treatment was to set up an ‘autoreply’ to emailed images of the patients, which the doctor would not review at all, or would review too late to make adjustments before patients are irradiated? With growing concerns over how cancer patients can be overexposed to radiation even when physicians are supervising the procedures, how much harm can be caused when physicians fail to provide the personal supervision that they are paid to provide?”

Continue reading "New Health Care Law Arrives With Announcement of $12 Million Recovery in Qui Tam Whistleblower Case Under False Claims Act" »

Among the many 2009 changes to strengthen the False Claims Act is one whose impact is about to be experienced: greater use of "civil investigative demands" to gather evidence.

Civil investigative demands allow to government to require any person believed to have documents or information relevant to a False Claims Act investigation to do the following:

(A) to produce such documentary material for inspection and copying,

(B) to answer in writing written interrogatories with respect to such documentary material or information,

(C) to give oral testimony concerning such documentary material or information, or

(D) to furnish any combination of such material, answers, or testimony. (31 U.S.C. § 3733 (a)).

Until now, civil investigative demands were theoretically available, but seldom used, as they required authorization by the Attorney General. Now, as the 2009 amendments permit, the U.S. Attorney General has just delegated that authority to local U.S. Attorneys.

The result should be far greater use of these valuable investigative tools, which are now more available to the line prosecutors who investigate False Claims Act cases. Although reporting requirements apply, the change gives a leg up to aggressive investigators in gathering evidence.

Another significant 2009 change is that prosecutors are now authorized to share with qui tam relators or whistleblowers the information or documents obtained by CIDs, if they deem it necessary. This change will enhance the important "collaboration" between government counsel, the whistleblower, and the whistleblower's counsel that has proved extremely effective in prosecuting qui tam cases under the False Claims Act.

As time will tell, of all the 2009 amendments, this change may have the greatest impact on False Claims Act investigations. It should allow the government lawyers and investigators who actually work cases to take sworn testimony and require answers to interrogatories and document requests, before suit is commenced.

We have written previously about how the "Troubled Asset Relief Program" (TARP) that began with the financial meltdown in 2008 would undoubtedly beget fraud that may be actionable under the False Claims Act. The qui tam provisions of the False Claims Act, the country's major whistleblower law, allow whistleblowers ("relators") who report fraud or false claims to share in the government's recovery of damages.

Yesterday, the first TARP fraud criminal charges appeared. Federal prosecutors in New York's Southern District announced the arrest of Charles J. Antonucci, Sr., former President and Chief Executive Officer of The Park Avenue Bank.

The criminal complaint filed on March 13, as summarized by prosecutors, alleges "self-dealing, bank bribery, embezzlement of bank funds, and fraud, among others. ANTONUCCI also was alleged to have attempted to fraudulently obtain more than $11 million worth of taxpayer rescue funds from the Troubled Asset Relief Program, or TARP. ANTONUCCI is the first defendant ever charged with attempting to defraud TARP. Additionally, ANTONUCCI was alleged to have used The Park Avenue Bank in a scheme to defraud two pastors of a Florida congregation out of more than $100,000 set aside to build a new church."

Antonucci likely will not be the last former bank executive to have to surrender his passport and post bond. If it were not for the dearth of restrictions on permissible uses of TARP funds--which has provoked outrage as TARP recipients paid large bonuses--more TARP cases for "misuse" of TARP funds would have appeared by now. (We received many calls from potential TARP whistleblowers interested in bringing cases under the False Claims Act).

Nonetheless, Antonucci's case alleges some of the more traditional types of fraud that will be prosecuted as they undoubtedly surface in the TARP program, especially as more TARP whistleblowers come forward.

With the billions used to fund TARP, those TARP whistleblowers may be motivated by the prospect of receiving 15-25% of money that the government recovers when the whistleblowers use the qui tam provisions of the False Claims Act to pursue TARP fraud.

The government's full announcement is reprinted below.

Continue reading "Bank CEO's Alleged TARP Fraud Results in First Reported Criminal Charges For Misuse of TARP Funds" »

As if the nation's expenditures to rebuild Iraq were not enough, fraud that steals taxpayer dollars continues to infect the Iraq reconstruction program. This fraud often results in qui tam whistleblower cases under the False Claims Act, which allows those reporting the fraud to receive a a share of the government's recovery of money.

Today's New York Times piece by James Glanz reports on the more than 50 new fraud investigations in the past six months alone in the Iraq reconstruction effort.

The Office of the Special Inspector General for Iraq Reconstruction is responsible for these investigations. "Chaos, weak oversight and wide use of cash payments in the reconstruction program in Iraq allowed many more Americans who took bribes or stole money to get off scot-free," in Mr. Glanz's words.

Fortunately, 2009 changes to strengthen the False Claims Act, the country's primary whistleblower law, will allow whistleblowers reporting fraud to do so more effectively so that they may share in the dollars recovered.

Continue reading "Iraq Reconstruction Fraud Continues to Fuel Investigations by Office of the Special Inspector General for Iraq Reconstruction" »

One of the most interesting and challenging issues in representing IRS whistleblowers is how this promising new IRS Whistleblower Program can co-exist with the limits Congress has imposed on disclosure of taxpayer information--which includes what the IRS does in pursuing claims brought by whistleblowers.

I wanted to pass along that Michelle M. Kwon, Assistant Professor of Law at Texas Tech Law School, has written a law review article about this subject. It discusses recommendations for allowing information to be shared more with whistleblowers by "relaxing" the restrictions of section 6103, "Confidentiality and disclosure of returns and return information."

As Professor Kwon writes:

There is a tension between protecting taxpayer privacy and effectively administering the enhanced IRS whistleblower program. Section 6103 generally would prohibit the IRS from disclosing to the whistleblower the status of the whistleblower’s claim, including whether the taxpayer is, has been, or will be under audit as a result of the whistleblower’s information, why a claim is rejected or denied, or the basis of any eventual award. Furthermore, when Congress enhanced the whistleblower law in 2006, it contemplated that the IRS may seek additional assistance from the whistleblower, presumably to help build a case against the delinquent taxpayer. The ability of the whistleblower to assist the IRS may be hampered, however, to the extent that Section 6103 prohibits the IRS from sharing confidential tax information with the whistleblower. Finally, the new law gives whistleblowers the right to appeal IRS award determinations to the Tax Court. But there are questions about how meaningful that appeal right can be given the restrictions imposed by Section 6103.

Issues concerning how section 6103 will impact IRS whistleblowers are among those to be addressed at the 2010 IRS Whistleblower Boot Camp, which will build on the successes of last year's inaugural IRS Whistleblower Boot Camp.