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Taxpayers Against Fraud Education Fund is a nonprofit, public interest organization dedicated to combating fraud against the Federal Government through the promotion and use of the Federal False Claims Act and its qui tam provisions.

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Common
Types of Fraud:


 


Fast Facts
about the FCA
 


The Government Counts on Whistleblowers:  More than 80 percent of the False Claims Act cases that are now pursued by the U.S. Department of Justice are initiated by whistleblowers.
 


Cheaters Pay Whistleblower Awards:
Companies cheating the U.S. Government pay whistleblower rewards – not one dime comes from U.S. taxpayers.  The reason for this is that the False Claims Act calls for triple damages so that the Government can be made whole, not only by recouping the cost of whistleblower awards, but also by recovering the cost of investigations, prosecutions, and lost interest.
 


Big Cases Require Big Investments:
Big fraud cases prosecuted under the False Claims Act often require many years of litigation and investigation.  For example, the whistleblower in the first Columbia-HCA fraud case spent 13 years pursuing his False Claims Act lawsuit.  The law firm that spearheaded this case invested more than 85,000 hours in the case.  In the end, the various frauds perpetrated by Columbia-HCA returned over $1.5 billion to the U.S. Treasury.
 


Frivolous Lawsuits are Discouraged:  Because most False Claims Act lawyers work on a contingency basis, they only get paid if they win. This means that they are unlikely to invest time, money and energy building a case that they themselves do not feel will be productive.  In addition, under the False Claims Act, a complainant can be required to pay the defendants attorney’s fees if the court finds that the claim was frivolous or brought primarily for purposes of harassment.
 


The False Claims Act Provides Some Employment Protections: 
If an employee is fired, demoted, harassed, or otherwise discriminated against for filing a False Claims Act suit, the law provides for reinstatement, double back pay, and compensation for special damages, including litigation costs and reasonable attorneys’ fees.
 


Drug Company Frauds are Pervasive and Large: 
Over 180 pharmaceutical fraud cases, covering more than 500 drugs, are now under investigation by the U.S. Department of Justice under the False Claims Act. 

Settlement of just 16 drug manufacturing cases (all those resolved to date) has returned over $4 billion to the U.S. Government and the 50 states.

 


Routine Mistakes and  Errors are Not  Prosecuted Under the  False Claims Act:
The False Claims Act is not used to correct minor billing mistakes or errors, as these frauds are not systematic and rarely amount to truly large sums of money.   


 

Major Cases Under Watch:  


Nominal Pricing Fraud:
 FCA cases involving violations of the nominal pricing exception have been filed.  Possible cases involve statins, proton pump inhibitors, non-steroidal anti-inflammatory drugs, and others.

 

Iraq War Fraud:  Numerous large cases dealing with contractor fraud in Iraq are reported to be under investigation, but remain under seal.

 

Anti-Psychotic Drugs:  Investigations about the off-label marketing of Zyprexa, Risperdal and Seroquel are under way.   These three drugs represented combined sales of $12 billion in 2006. 
 

Average Wholesale Price Fraud:  The U.S. Government has joined three cases likely to go to trial this summer:  Abbott, Dey and Roxane Pharmaceuticals.  More than 50 other companies face similar charges in Boston.

 

University of Phoenix:  The Supreme Court has denied cert., and the defendants concede they face a billion dollars in liability.

 

Outlier Fraud:  Several large outlier fraud investigations against hospitals are under investigation.
 

Newsletters

 

June 26, 2008
n House Judiciary Moves on FCA
n No Way to Run a Country
n Foreign Assistance Fraud
n Pharma Cash on the Hill

June 17, 2008
n House Judiciary Moves on FCA
n CBS Features Walgreens Case
 n U.S. Bilked Out of $105 Million
 n IRS Losing $100 Billion a Year?
 n Adulterated Offshore Meds?

June 10, 2008
n Supreme Court Remands Allison Engine Case to 6th Circuit

June 4, 2008
 n Walgreens Pays $35 Million
 n Pasha Settles for $13 Million
 n A Yacht Named "Fringe Benefit"
 n Does South Florida Represent
20 Percent of Medicare Fraud?
 n DoJ Suits Up Against Kaplan
Massive IRS Whistleblower Case?

May 28, 2008
 n Medtronic Settles for $75 Million
 n National City Mortgage
to Pay $4.6 Million
n NJ Medicaid Watchdog?
 n Schering-Plough "Relationships"
         
May 20, 2008
 n Biovail To Pay $25 Million
 n Lockheed Martin Space Systems to Pay $10.5 Million
n IIF Data Solutions to Pay $8.9 Million
 n Join Taxpayers Against Fraud
 n Baptist Health South to Pay $7.675 Million
 n Zimmer to Pay Docs to Get Out of Kickback Scheme
 n Tariff FCA Case Settled
 n CSC to Pay $1.37 Million
May 11, 2008
 n McKesson to Pay $13.25 Million
 n CoxHealth Floats a Number
 n Magical Millions
 n Wackenhut Under the Glass

 May 2, 2008
 n UMDNJ Docs Sued for Kickbacks
 n GSA's Lurita Doan Loses Job
 n Are Fraud Files a Trade Secret?
 n Savannah Hospital Pays $5 Million
n Cancer Doc Imports for Resale
n "Undercover" by John Schilling
 n New York's Medicaid Work Plan

April 22, 2008
 n HHS Say "Tell Us More"
n It Takes a Village to Detect Fraud
n Positively Not Overnight
n Fraud Loophole Eliminated

April 15, 2007
n Radiologist to Pay $7 Million
n NC Dental Chain Pays $10 Million
n Heartland Dental Pays $3 Million
n OMB has Some Explaining to Do
n Entrepreneur of the Year?
n Ista Off-Label Investigation
n Fast Fact: Inflation-adjusing FCA Penalties

April 3, 2008
False Claims Act Amendments
Voted Out Senate Judiciary Committee
March 31, 2008
 n Abilify Maker to Pay $4 Million
n HealthEssentials Not Likely to Pay Back Stolen Millions
n AWP Class Action Certified
n Derived Off-label Liability?  
n Psychiatrist to Pay $1.1 Million

 March 19, 2008
 n CVS Pays $37 Million For Drug Switching
n InterMune CEO Charged
n Pfizer Sales Manager Indicted
n Mounting Zyprexa Liability
 n Michigan Money on the Table

March 13, 2008
n Former Pfizer Manager Indicted for Obstruction
n Yale-New Haven Hospital Settles
n WellCare Hires a Fixer
n Precursor to an AWP Settlement?
n Besler to Pay $2.8 Million

March 6, 2008
n Allison Engine at Supreme Court
n Senate Judiciary Hearing on FCA
n Cathedral to Pay $5.3 Million

February 25, 2008
n Allison Engine to Supreme Court
n $215 Million Alabama Jury Award  (non-FCA)
n Quest Reserves $241 Million
n Betting the House
n Wisconsin Passes State FCA

 February 15, 2008
 n Alabama Takes on Pharma Fraud
n Amgen Subpoenaed for Enbrel
 n A Free-Fraud Zone?
n Counting False Claims Act Cases
 n Fight Fraud:  Remove The Cap

February 8, 2008
n Merck Settles for $650 Million
 n Alabama AWP Trial to Start
n "Undercover" by John Schilling
 n Finally A Treatment
n Lilly Sued Over Zyprexa as Settlement Rumors Swirl

January 30, 2008
n Big Dig False Claims Act Case
n Rhode Island False Claims Act Signed Into Law
n Feds Join NJ Outlier Cases
n Passion for Payola is Called . . .
n Washington Defines Success

January 23, 2008
n Supreme Court Gets Briefs in Allison Engine Case
n New Jersey False Claims Act Signed Into Law
n Louisiana Hospital to Pay $1.9 Million for Heart Fraud
n Apollo to Pay $282 Million
n Illinois Expands Its FCA
n Pharma Trinkets to Cameroon

January 10, 2008
n Washington D.C. To Require Pharma Rep Sales Licenses  
n Fraud-fighting Without Teeth
n Orthofix in the Crosshairs
n Dey and Takeda Pay $6.75 Million

December 27, 2007
n Fraud Costs Us More Than an Arm and a Leg
n SBA Fraud Unprosecuted
n $26 Million Hospital Settlement
n CMHS to Pay $1.5 Million
n Orange County to Pay $7 Million
n Illinois Attorney General Refiles on MRI Operators
n Sioux Kevlar Case

 December 18, 2007
n Relator Wins Over DoJ Protest
n HealthSouth Pays $14.9 Million
 n Law and Odor at Wellcare
n Blue Cross and Blue Shield
Does Payola Politics in RI
n More Tricky Knee Subpoenas

December 10, 2007
n $42 Million Sand Theft
n Ambulance Co. to Pay $6 Million
 n Iraq:  Money Without Meter
n Asphalt Co. Settles FCA Case for $8.2 Million
n NJ Hospital to Pay $7.5 Million
n Cigarette Importation FCA
n Harris Hosp. Pays $1.9 Million

December 5, 2007
n Merck Settlement Expected to Top $670 Million
n $25 Million TVA Coal Settlement
n $25 Million Wheelchair Fraud
OK Doctors to Pay
n $1.5 Million

November 28, 2007
n Sleep Center Billing Fraud
 n Cheating Death and Medicare
n DoJ's Monitoring Contracts
 n The High Price of Whistleblowing
 n Federal Whistleblower Odds
November 20, 2007
n DoJ Joins Suit Against Lockheed
 n The Biggest FCA Case Ever?
 n Peter Rost Gets a Second Chance
 n Second Stryker Settlement:  $16.5 Million

November 14, 2007
n Off-Label Narcotic Lollipops
n $28 Million Air Cargo Fraud
n DaVita Investigation in Nevada
n CMS and the Right to Steal

November 08, 2007
 n CMS Overpaid $4 Billion
n Willful Injury from Price Fraud
n AZ Hospital Pays $5.8 Million
n More Inquiries at Omnicare
n A Mother's Vengeance
n A Thieving Fraud Inspector
 n Adolescent Health Fraud

October 31, 2007
n Hexcel to Pay $15 Million
n Novation Out from Under Seal
 n The WellCare Raid
n Supreme Court Look at Presentment
 n Quest Braces to Pay
 n Dianon to Pay $1.5 Million
n Investigation Into Universal Health Services Expands

 October 23, 2007
n Phony Drug Tests
 n Rigsby Sisters Win "First to File"
n Grassley to Seek Reelection

October 17, 2007
n Let's-Make-a-Deal Meals
 n No Gifts, No Entrance
n Barr Settles for $2 Million
n Iowa Sues 79 Drug Makers
October 3, 2007
n Bristol-Myers Squibb To Pay $515 Million
n Artificial Hip and Knee Co.'s To Settle for $310 Million
September 26, 2007
n Needed:  More Resources
n Keisler Stays on as Acting AG
n The Gold is in Community Mental Health Centers
n HIV Drug Fraud Rampant in FL
n Tenet Lawyer Now Defendant
n DoD Whistleblower Protections

 September 19, 2007
n FCA Amendments Introduced
n Aventis to Pay $190 Million
n TAF Conference & Awards
n First New York FCA Case
n Massive Medicare Theft
n NY Focuses on Home Heath
n Tenet Lawyer Sued Under FCA

September 12, 2007
n FCA Corrections Act of 2007 is introduced with bipartisan support from Senate leadership

September 4, 2007
n Infusion Therapy Fraud
 n Home Health Fraud in NY
n Missing Weapons in Iraq
n Louisiana Revises State FCA

August 21, 2007
n IBM and PWC Pay $5.2 Million
n Nursing Home Violations
n Screwed for a Washer
n Worthless Education Loans?
n Univ. of Phoenix Loses Again
n PhRMA Public Relations

August 14, 2007
n Crane Settles for $7.6 Million
 n D.C. Migrant Farm Workers?
n Mortgage Fraud Hits the Fan
n Suit Against Iasis Unsealed
n Parkway to Pay $1 Million
n Teradata Data Warehousing Under Investigation

August 7, 2007
n A Fraud We Need Like a Hole in the Head
n Katrina Suit Out from Under
n Register Docs on the Take?

 July 31, 2007
 n $50 Million Big Dig Concrete Settlement
 n University Pays $5.3 million
 n The (Ortho)fix Is In
 n Augustine's Personal Responsibility
 n Keeping an Eye on PSC's



 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 
 

 


 

 

 

 

 

 

 
 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 


 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

 




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TAF E-News E-News Index Search Site

 

House Judiciary Committee
Reports Out FCA Bill
The House Judiciary Committee has reported out, by voice vote, H.R. 4854, the False Claims Act Correction Act of 2007.  The bill, introduced on December 19, 2007, would clarify and strengthen the False Claims Act which has been weakened by  recent court decisions.

Ranbaxy Under Investigation
Ranbaxy, one of the largest drug companies in the world, is under investigation for making weak or adulterated HIV drugs given to thousands of AIDS patients in Africa and billed to the U.S. Government under the President's Emergency Plan for AIDS Relief program (PEPFAR).  Ranbaxy is also being investigated for lying about its Zocor formulation sold in the U.S. >> To read more

TX Joins Lawsuit Against Four Drug Companies
Texas has recently joined lawsuits against four generic drug manufacturers that falsely reported inflated drug prices to the Texas Medicaid program.  The drug companies are Watson/Schein Pharmaceuticals Inc. of California; Alpharma Inc. of New Jersey; Par Pharmaceutical Inc. of New Jersey; and Barr Pharmaceuticals Inc. of New York.  The Texas False Claims Act legal action was initiated by Ven-a-Care of the Florida Keys Inc. which has previously initiated Medicare and Medicaid fraud actions that have returned over $850 million to the American people.   >> To read more

Supreme Court Remands Allison Engine Case
The Supreme Court ruled unanimously that the False Claims Act applies to subcontractors and other indirect recipients of federal funds, but that the subcontractor must intend the government to rely on a fraudulent claim in order to get paid.  The Supreme Court sent the Allison Engine case back to the 6th U.S. Circuit Court of Appeals in Cincinnati to apply the standard it laid out.  >> To read the opinion (PDF)

Walgreens Pays $35 Million
Walgreens is the third national pharmacy chain to settle drug switching allegations exposed by a whistleblowing pharmacist whose actions have helped return more than $120 million to federal and state governments.  Current charges involve Walgreens switching dosage forms in filling generic Prozac, Zantac and Eldepryl prescriptions paid for by Medicaid. >> To read more
Pasha Settles for $13 Million
The Pasha Group has agreed to pay $13 million to settle FCA charges alleging the company engaged in bid-rigging in connection with furniture shipments for the Dept. of Defense.  Five other companies are implicated.  >> To read more

 
Medtronic/ Kyphon Settle for $75 Million
Medtronic Spine, formerly known as Kyphon Inc., has agreed to pay $75 million to settle a False Claims Act lawsuit which exposed the company's sales and pricing strategy which was designed to further fraud against Medicare.  The case was filed by whistleblowers Craig Patrick and Chuck Bate, who will receive $14.9 million of the settlement as an award for helping uncover and prosecute the fraud on behalf of the American government and its taxpayers.  >> To read more

Biovail To Pay $25 Million
 Biovail Corporation says it will pay $25 million to settle criminal allegations related to kickbacks paid to doctors in order to induce them to prescribe Cardizem.  The probe began after reports in The Wall Street Journal and Barron's revealed Biovail was paying doctors up to $1,000 each to write prescriptions for Cardizem LA and write reports on the drug -- a kind of Phase IV marketing scam. >> To read more

Lockheed Martin Space
Systems to Pay $10.5 Million
Lockheed Martin Space Systems has agreed to pay $10.5 million to settle a case alleging the company submitted false invoices in order to receive early progress payments.  The fraud is connected to a multi-billion dollar contract for the Titan IV space launch program.  >> To read more

IIF to Pay $8.9 Million
IIF Data Solutions has agreed to pay $8.9 million to settle a False Claims Act lawsuit related to bill padding in connection to defense work.  >> To read more

Join Taxpayers Against Fraud
Taxpayers Against Fraud Education Fund is a 400-member strong organization of False Claims Act plaintiffs lawyers.  If you are a qui tam lawyer, and are not a member of TAF, you are missing out on the latest legal opinions, settlements, and practitioner strategies.  >> Join today

Baptist Health South
to Pay $7.675 Million
Baptists Health South has agreed to pay $7.65 million to settle claims it violated the False Claims Act and the Stark Statute by making excessive payments to an oncology group that was a source of patient referrals to two of its hospitals. >> To read more

McKesson to Pay $13.25 Million
McKesson Corp, has agreed to pay $13.25 million to settle charges it did not report to the DEA the sale of suspicious amounts of controlled substances sold to pharmacies in Florida, Colorado, Texas, Utah, California and Maryland. >> To read more

CoxHealth Floats a Number
CoxHealth Systems says it may be close to reaching a $60 million settlement with the U.S. Department of Justice on charges the company upcoded and billed for services never performed. However, the company admits negotiations are far from over. >> To read more

False Claims Act Amendments, S. 2041,
Voted Out of Senate Judiciary Committee
Senate Bill 2041, the False Claims Act Corrections Act of 200, has received overwhelming bipartisan support from the Senate Judiciary Committee, which has reported it out to the full Senate for consideration.
     "This is common sense legislation that we expect to sail through the House and Senate," said Jeb White, President of Taxpayers Against Fraud.  "This bill has broad bi-partisan support. It's hard to be opposed to building a better rat trap to catch corporate cheats, chiselers, and con artists."
     Proponents of S. 2041, note that the new bill clarifies the existing scope of False Claims Act liability, while closing a small number of loopholes that have allowed companies to steal taxpayer dollars with impunity. Specifically, S.2041 would:

  • Clarify that False Claims Act liability protects all federal funds;

  • Solely vest the Government with the power to dismiss whistleblower-filed False Claims Act lawsuits that are based on public allegations;

  • Remove the confusion over the statute of limitations period by adopting a straightforward 10-year period;

  • Explicitly clarifies that the False Claims Act applies to those who discover an overpayment and decide to pocket the funds;

  • Provide strengthened employment protection for whistleblowers.
     S. 2041, and its analog in the U.S. House of Representatives, is supported by leadership in both parties, including Sen. Charles Grassley (R-IA), Senator Richard Durbin D-IL), Senator Patrick Leahy (D-VT), and Senator Arlen Specter (R-PA). >>  Click here to see TAF's advertisement in Roll Call in support of the bill (PDF)
 

CVS Pays $37 Million For Drug Switching
CVS Corporation, America’s largest pharmacy chain, has agreed to pay $37 million to settle charges it illegally overcharged Medicaid up to 400 percent by switching generic Zantac (ranitidine) prescriptions from tablets to higher priced capsules.  >> To read more

Merck Settles for $650 Million
Merck has settled two False Claims Act cases involving nominal pricing fraud related to the marketing of three of its top-selling long-term use drugs, Zocor, Vioxx and Pepcid.  The marketing scheme involved Merck offering 92% discounts to hospitals and clinics provided they filled their prescription needs with Merck product.  The marketing gambit was that once patients left the hospital, it was expected they would continue to use the same drugs, with Medicare, Medicaid and private insurance paying the full price. Discounts tied to sales performance are considered a kickback and best-price violation under Medicare and Medicaid rules.  >> To read more | Feb. 8, 2008

Allison Engine to Supreme Court
The Supreme Court will hear oral arguments in the Allison Engine case this week. Amicus curiae briefs have been filed by the Solicitor General's Office , Sen. Charles Grassley and Taxpayers Against Fraud . The amici build off the arguments raised in the Relator-Respondents' brief and offer the Court a number of policy considerations for rejecting the so-called Totten  "presentment requirement."  On the opposite side of the fence, representing the company charged with defrauding America's taxpayers, is this brief which asks the Court to reverse the Sixth Circuit's decision . To read more about the case . | Feb. 25, 2008

$215 Million Alabama Jury Award Sends Message on Average Wholesale Price Fraud
AstraZeneca was hit with a $215 million judgment in Alabama over Medicaid drug pricing fraud.  The jury said AstraZeneca must pay $40 million in compensatory damages and $175 million in punitive damages for alleged false and misleading reporting of drug prices reimbursed by the Alabama State Medicaid Agency.  Remember, this is just one drug company in one state. If we scale up the compensatory award alone, based on population, AstraZeneca seems to face a potential liability of $2.4 billion for Average Wholesale Price and Medicaid Best Price violations.  AlstraZeneca is just one of more than 75 drug companies in line to face similar charges in Alabama. Though the Alabama litigation is not a False Claims Act case, more than 60 companies face similar charges, under the federal False Claims Act, up in Boston.  These companies include: Abbott, Roxane, Dey, Boehringer Ingelheim, Amgen, Armour Pharmaceutical; Aventis Pharmaceuticals, Baxter Healthcare, Bedford Laboratories; Ben Venue Laboratories, Braun of America, C.H. Boehringer Sohn, Centocorps Inc., Forest Pharmaceuticals, Grundstucksverwaltung GMBH & Co., EMD, Geneva Pharmaceuticals, GlaxoSmithKline, Glaxo Wellcome, Burroughs Wellcome, Hoechst Marion Roussell, Hoffman-LaRoche, Hospria Inc., Immunex, Ivax Pharmaceuticals, Janssen Pharmaceutical Products, Johnson & Johnson, Lipha, McGaw, Merck, Mylan Laboratories, Mylan Pharmaceuticals, Novartis, Ortho Biotech Products, Pfizer, Pharmacia, Pharma Investment, PurePac Pharmaceutical, Roche Laboratories, Roxane Laboratories, Sandoz, Sicor, Gensia Pharmaceuticals, Schering-Plough Corp., SmithKline Beecham Corp., GlaxoSmithKline, Teva Pharmaceuticals, Warrick Pharmaceuticals, and Z.L.B. Behring, among others. 

Quest Reserves $241 Million
Quest Diagnostics has increased its litigation reserves to $241 million, noting that this amount "represents the minimum expected probable loss" due to False Claims Act litigation related to the government investigation of NID, a test-kit manufacturing subsidiary closed in 2006.  Settlement talks with the U.S. Government are ongoing.  >> To read more

New Jersey False Claims Act Signed Into Law
It's not often that both the New Jersey Senate and Assembly give a unanimous vote in support of a piece of legislation, but that's what happened with the New Jersey False Claims Act, which has now been signed into law by Governor John Corzine.  >> For a complete list of state FCA's | Jan. 23, 2008

HealthSouth Pays $14.9 Million
HealthSouth and two doctors have agreed to pay $14.9 million ($14.2 million to be paid by the company and $700,000 to be paid by the two doctors) to settle charges the company was submitting false claims to Medicare and paying illegal kickbacks to referring physicians.  The settlement results from disclosures made by HealthSouth in 2004 and 2005 to the U.S. Attorney for the Northern District of Alabama.  >> To read more | Dec. 18, 2007

Law and Odor at Wellcare
Wellcare made its General Counsel its Compliance Officer -- the same mistake Tenet did.  That's not the only similarly says Melissa Davis at The Street:  both companies also had big FBI raids, and both bragged about their compliance programs which, in hindsight, appear to have been gossamer thin.  Davis also notes that a whistleblower that filed a case one day after the FBI raid is a certified fraud examiner who supervised WellCare's special investigations unit. >> To read more | Dec. 18, 2007

Relator Wins Over DoJ Protest
Jim Marchese, the former Cell Therapeutics sales rep that was seeking a relator's award for helping the government win a $10.5 million FCA recovery, has won a $1.6 million award despite the DoJ's objections. The Judge agreed that Marchese did not immediately report the fraud, but said he did not initiate or plan the activity, and so was eligible for a 15 percent award. >> To read the opinion of judge Marsha Pechman