Whistleblower Case

March 2, 2021

Hedge fund manager Thomas E. Sandell has paid $105 million to resolve claims first brought by a whistleblower under the New York False Claims Act alleging that Sandell evaded tens of millions in state and local taxes by falsely claiming that $450 million in management and performance fees he recognized in 2017 were not earned for services performed in New York, despite the fact that his fund, Sandell Asset Management Corporation, operated in New York and represented to the SEC that New York City was its principal place of business.  In his effort to evade NY taxes, Sandell moved to London for a period of time, opened an office in Florida, and managed SAMC expenses through a shell company that he also owned and controlled, all while continuing to perform the investment services that generated the fee income in New York.  When Sandell’s accountant informed him that he would have to pay NY state taxes, he terminated them and retained a firm that took his preferred position.  The whistleblower will receive an award of $22.05 million, which is 21% of the government’s recovery. NY

February 25, 2021

Texas Center for Orthopedic and Spinal Disorders and its owner, osteopath Mark Kuper, have agreed to a judgment of $11.2 million to resolve claims arising from their fraudulent billing of government healthcare programs.  Kuper also pleaded guilty to healthcare fraud, and was sentenced to 10 years in prison.  Defendants admitted that they submitted claims for services that were never rendered, including claims for one-on-one physical therapy pursuant to an individualized plan of care, when patients were actually attending group sessions with an athletic trainer, and claims for 60-minute psychotherapy sessions when patients actually spoke with unqualified individuals for just 15-20 minutes.  In addition, Kuper permitted his wife to use his credentials to issue prescriptions for controlled substances.  The civil investigation was initiated by a qui tam complaint filed by Richard Brown, who will receive 17% of the government’s recovery.  USAO ND TX

February 4, 2021

Durable medical equipment company Regency, Inc., has agreed to a $20.3 million civil settlement to resolve allegations that, together with its principal Kelly Wolfe, it violated the False Claims Act by creating dozens of front companies to submit over $400 million in false claims to government healthcare programs for the sale of DME that was not medically necessary.  Defendants were alleged to have paid unlawful kickbacks to doctors and falsely claimed that those doctors provided telehealth services to the beneficiaries, when in most cases the doctors had no interaction at all with the beneficiaries.  Wolfe also pleaded guilty to conspiracy to commit healthcare fraud and will be sentenced at a later date.  Former Regency employee Condra Albright will receive 23% of the civil recovery as a whistleblower reward.  DOJ; USAO MD FL

January 22, 2021

The estate of Dr. Patrick T. Hunter has agreed to pay more than $1.7 million to resolve allegations that the urologist, who passed away in 2019, submitted false claims to Medicare and TRICARE for medically unnecessary procedures and received improper payments for them from the Orlando Center for Outpatient Surgery.  Between 2010 and 2016, Dr. Hunter allegedly performed the lithotripsy procedures, which break up kidney stones, on patients who either did not have kidney stones or were not medically indicated for them.  For initiating the successful qui tam suit, whistleblower Scott Thompson will receive a relator’s share of $385,000.  USAO MDFL