Whistleblower News From The Inside — October 19, 2015
By the C|C Whistleblower Lawyer Team
United States Resolves $237 Million False Claims Act Judgment against South Carolina Hospital that Made Illegal Payments to Referring Physicians — The Department of Justice announced today that it has resolved a $237 million judgment, secured after a trial in 2013, against Tuomey Healthcare System for illegally billing the Medicare program for services referred by physicians with whom the hospital had improper financial relationships. Under the terms of the settlement agreement, the United States will receive $72.4 million and Tuomey, based in Sumter, South Carolina, will be sold to Palmetto Health, a multi-hospital healthcare system based in Columbia, South Carolina. DOJ
Estate and Trusts of Former Owner and President of Bank that Received TARP Funds to pay $11 million in Settlement — The United States alleged that in 2009 the late Layton B. Stuart, on behalf of One Financial and its subsidiary One Bank & Trust N.A., applied for a TARP investment. According to the United States, Stuart knowingly made false statements about the financial condition of One Financial and One Bank and about the intended use of the TARP funds. The schemes involved Stuart’s diversion of One Bank funds for personal use, including Stuart’s purchase of luxury vehicles for his wife and children. Within two weeks of receiving the TARP funds, Stuart allegedly diverted $2.185 million into his personal accounts. Stuart was terminated from One Bank in September 2012. DOJ
Valeant Probe Reprises Federal Focus on Drug Pricing — Valeant Pharmaceuticals International, Inc., stated last week that it had received subpoenas from U.S. attorneys’ offices in Manhattan and Boston seeking materials on a range of matters, including the financial aid it gives patients to pay for out-of-pocket costs as well as the pricing of its drugs. The company said it plans to cooperate with the investigation. WSJ
Kellogg Brown & Root Ordered to Pay for Accepting Kickbacks — A Texas federal judge ordered military contractor KBR to pay a $108,000 civil penalty, finding the company liable for accepting gifts and gratuities from a subcontractor seeking favorable treatment on a military logistics contract for Iraq and Afghanistan. FBI
Operators of Medical Equipment Supply Company Convicted in $1.5 Million Medicare Fraud Scheme — A federal jury in Los Angeles convicted the former owner and the former operator of a durable medical equipment supply company of health care fraud charges in connection with a $1.5 million Medicare fraud scheme. According to the trial evidence, the defendants paid illegal kickbacks to patient recruiters in exchange for patient referrals. The evidence further showed that the defendants paid kickbacks to physicians for fraudulent prescriptions – primarily for expensive, medically unnecessary power wheelchairs – which the defendants then used to support fraudulent bills to Medicare. DOJ
Daily Fantasy Sports Companies Face Investigations — As Nevada issued a case and desist order barring fantasy sports companies DraftKings and FanDuel from operating in that state, the fantasy sports industry faced further investigations from regulators around the country, including from the federal government, into the leaking of information and the nature of their operations. NY Daily News
Viacom and Cablevision settle lawsuit over channel bundles — Viacom Inc. and New York cable giant Cablevision Systems Corp. have settled a long-running antitrust lawsuit that was intended to shine a light on programmers’ demands that all of their channels be included in pay-TV packages. The two companies announced Friday afternoon that they had resolved the matter and were entering into “mutually beneficial business arrangements.” LA Times
French Prosecutors Probe Dominique Strauss-Kahn’s Failed Firm — French prosecutors are probing a failed financial services firm formerly co-led by Dominique Strauss-Kahn, the latest in a line of legal struggles that have dogged the former head of the International Monetary Fund. The investigation is attempting to shed light on events that led to the partnership being declared insolvent in November 2014 leaving dozens of creditors trying to recoup their losses. WSJ
Podiatrist, others indicted for health care fraud — A Chicago podiatrist, his wife, and the CEO of his health care company were indicted Friday on charges that they falsified paperwork and pressured podiatrists to provide unneeded services in long-term health facilities in Missouri. According to the indictment, the defendants would use an electronic medical record system to automatically insert diseases and symptoms patients didn’t have into their medical records. They used these records to bill Medicare, claiming that the patients needed the services. St. Louis Today