Lt. Colonel James J. DeVage served 30 years in the United States Army, worked 17 years at the IRS, and suited up against HealthSouth, the largest U.S. operator of rehabilitation hospitals in the U.S., in one of the largest False Claims Act cases at the time. Jim was 83 years old when his case settled. He was a veteran of three wars on three continents, and a former HealthSouth patient. He was astounded, however, to receive a copy of his physical therapy bill and find that Medicare was being billed for services that had not been delivered. Mr. DeVage called HealthSouth to complain to no avail, and then he called Medicare, also to no avail. Later, while talking with a friend, Mr. DeVage learned about the False Claims Act. After talking with an attorney, Jim DeVage filed a lawsuit on behalf of the U.S. Government, and on December 30, 2004 HealthSouth settled that lawsuit and other charges as part of a $325 million agreement with the U.S. Government. Jim DeVage split a $12 million award with two other whistleblowers (DeWayne Manning and Michael Freeman), who helped win the case. For his extraordinary efforts to squeeze fraud out of the U.S. health care system, Taxpayers Against Fraud awarding Jim DeVage our first “Whistleblower of the Year” award in 2005. “Mr. DeVage is living proof that an individual can make a difference,” says Patrick Burns, Co-Executive Director of Taxpayers Against Fraud Education Fund. “Mr. DeVage’s only interest in pursuing his case was in getting the Government to pay attention and stop the fraud. One of the great strengths of the False Claims Act is that it is more than a tip line — it provides a procedure that ensures that the Government will consider the whistleblower’s evidence. Mr. DeVage brought the government substantial evidence of fraud, and what was remarkable was that he was not a corporate inside with access to insider information, but simply a patient and consumer who was willing to take action in pursuit of fiscal integrity. His is truly a David and Goliath story.”
When Dinesh Thakur was hired as Director and Global Head of Research Information and Portfolio Management at Ranbaxy Laboratories, he thought he would be heading up the research and quality control side of one of the top 10 generic drug companies in the world. What he found at Ranbaxy, however, was a company without serious manufacturing or quality control systems in place, and that was routinely switching out its own drugs in testing trials with competitor drugs in order to “prove” that the drugs being manufactured by Ranbaxy were just as good. From 2003-2005, Mr. Thakur tried to internally report his concerns to the Board of Directors at Ranbaxy, but his warnings fell on deaf ears. Finally, realizing that patient health and safety were in the swing, and that Ranbaxy could not clean itself up from within, Mr. Thakur filed a False Claims Act lawsuit with the U.S. Department of Justice. As a consequence of Mr. Thakur’s lawsuit, the FDA banned the importation of Ranbaxy drugs to the U.S. and completely revamped FDA overseas inspections protocols. In 2013, Ranbaxy agreed to pay $500 million to settle the FCA lawsuit initiated by Mr. Thakur which included, among allegations, the charge that Ranbaxy was selling adulterated anti-retroviral drugs to USAID as part of the Presidents Emergency Plan for AIDS Relief (PEPFAR).
Jim’s False Claims Act story started in the late 1980s, when he was working as an internal auditor at the Northrop’s Rolling Meadows, Illinois facility along with co-relator, Rex Robinson, who was a test engineer. Jim and Rex discovered that Northrop was recycling and scrapping large amounts of material used in the B-2 Stealth bomber and charging the government as if the material was actually being used, rather than resold and recycled. Northrop was also directly inflating the costs of materials and misrepresenting to the Government the amount of progress they were making in developing and building the bomber. Jim initially filed a qui tam suit in 1989, but the government declined the case in 1992. Despite this setback, and the added pressure of having to take any job possible to help support his family, (including delivering newspapers to make ends meet) Jim and his attorney pressed on, developing a portfolio of evidence so compelling that the Department of Justice finally intervened in the case in 2001. The case eventually settled in 2005 for $62 million.
Elin Baklid-Kunz had a solid and progressive 20-year career at Halifax Health Systems. After emigrating to the U.S. from Norway, she began as a Food and Nutrition Services Coordinator at Halifax while she worked towards her Masters of Business Administration at Stetson University. After completing her MBA in 1998, Mrs. Baklid-Kunz was promoted to a financial analyst position and then, in 2005, she was promoted to the Compliance Department. In 2008 Ms. Baklid-Kunz was made Director of Physician Services. While at the Halifax, Congress passed the Deficit Reduction Act of 2005, a law that mandated that, beginning January 1, 2007, companies doing more than $5 million worth of business with Medicare or Medicaid, must educate their employees about the False Claims Act. As the company’s compliance officer, Ms. Baklid-Kunz not only had to make herself familiar with the False Claims Act, she was also responsible for getting the word out to others. After accepting promotion to Director of Physician Services in 2009, Ms. Baklid-Kunz became concerned that contracts Halifax maintained with some physicians violated the Stark Law. She also encountered an internal audit that showed Halifax neurosurgeons were performing procedures at four times the national average, and that other surgeons at the Hospital were performing medically unnecessary surgeries. Ms. Baklid-Kunz raised her concerns with top management, but she was brushed off by her superiors who told her that “loyalty should be with Halifax and not with the government.” What to do? It was not an easy choice. Ms. Baklid-Kunz had invested 20 year of her life at Halifax, and her family in Norway was worried she could lose her job and career. On the other side of the coin, the fraud was massive, with scores of millions of dollars and patient health in the swing. In 2009 Ms. Bakid-Kunz filed a False Claims Act lawsuit, under seal, in the Northern District of Georgia. In 2011, after investigating her allegations, the U.S. Department of U.S. joined the part of her case that dealt with Stark Law violations. In March of 2014, on the eve of trial, Halifax settled the DoJ-joined part of the case for $85 million, with Ms. Bakid-Kunz and her legal teams receiving $20.8 million as a whistleblower award. After her win, Halifax paid Ms. Kunz a full year’s salary as part of a severance package.
David Kester was the whistleblower in one of the largest False Claims Act cases ever settled. As a salesman for Novartis, Mr. Kester realized his company had built a complex feed-back loop within its specialty pharmacy customer base, and that this feedback loop acted as a kind of illegal inducement to maximize billing. Rather than simply sell the best product at the best price, Novartis had crafted a kickback scheme that provided rebates to specialty pharmacies that sold the largest volume of expensive Novartis medications such as Exjade and Myfrotic. High-dollar incentives for high-volume sales worked to get specialty pharmacies to proactively increase patient refill rates by using nurses to call patients who, in turn, would use their authority to prey on patient fears and uncertainty. Novartis kept track of drug refills from each pharmacy, and assigning each score that determined how much patient referral business they would get from Novartis. David saw this for what it was; an illegal and immoral kickback scheme costing US taxpayers hundreds of millions of dollars. As Mr. Kester noted at the time his case was finally resolved: “Patients and their caretakers are already overwhelmed by their diseases, and any advice they receive from any clinician, including a pharmacy clinician, needs to be in the patient’s best interest and not tainted by outside influence.” Rather than walk away, David Kester stepped up and risked a career that had taken him a lifetime to build. He decided to blow the whistle. In the end, when the dust finally settled after years of investigation and litigation, the U.S. Government had recovered over $465 million from Novartis and two specialty pharmacies, and Mr. Kester had illuminated an entirely new problem area in the arena of prescription drugs sales to the Medicare and Medicaid programs.
In September of 2004, New Jersey’s Medicaid program informed Richard West, an intubated, wheelchair-bound veteran, debilitated by muscular dystrophy, that his home healthcare services were being suspended because he had exhausted his yearly Medicaid allowance. Not said: Mr. West had not received most of the services that his home health care provider, Maxim Healthcare, had billed to the state. From April 2003 through July 2004, Mr. West documented the discrepancies between the hours Maxim Healthcare billed and the hours they actually spent at his New Jersey home. In total, Mr. West showed that Maxim billed Medicaid for more than 700 hours of services not rendered. Mr. West alerted state and federal Medicaid officers, social workers, and Veteran Affairs officials about the fraud to no avail. On October 8, 2004, Mr. West filed a qui tam action in the U.S. District Court for the District of New Jersey. In September 2011, Maxim Healthcare agreed to pay $150 million to the federal government and the states to settle the widespread pattern of billing fraud that Mr. West’s False Claims Act case had uncovered more than 7 years earlier. For his tireless efforts in bringing this case to the attention of state and federal authorities, Mr. West received an award of $15.4 million. After the settlement, Mr. West told reporters: “Somebody decided to make a profit on my disability . . . This is your country. You see fraud you should turn them in. That’s part of being an American.” Despite the positive outcome in his case, Mr. West’s fight continues. In 2012, the Attorney General of New Jersey filed a $900,000 lien against Mr. West’s settlement award for the cost of past Medicaid benefits, and the State is now seeking to disqualify him from future Medicaid coverage because New Jersey Medicaid law says eligible patients cannot possess resources in excess of $2,000.
“It was never about the money,” said David McIntosh, former M.K. Battery sales representative turned whistleblower, “It was about doing the right thing and protecting the people who protect us.” In 2006, McIntosh internally reported changes in the manufacturing process of acid sealed batteries used in Army Humvee turrets, which effectively cut the lifespan of the batteries in half. For 14 months, McIntosh waited while executives at M.K. Battery sat on their hands. When they did nothing, McIntosh filed a complaint directly with the Department of Defense (DoD). M.K. Battery reacted swiftly. Within three weeks of submitting the complaint, McIntosh was terminated from his position, and isolated within the industry. McIntosh and his attorneys filed a qui tam action against M.K. Battery in 2007 alleging the battery manufacturer knowingly withheld vital information from the Army about the lifespan of the batteries. Additionally, the complaint alleged M.K. Battery fired McIntosh in retaliation for contacting DoD. For six years, McIntosh struggled to find employment in the battery sales business. “I don’t know if I was blackballed,” McIntosh told Minneapolis’ Star Tribune, “but it felt like it.” In September 2014, M.K. Battery settled for $5.5 million, McIntosh’s received $990,000 for blowing the whistle. “I believe strongly that the lives of American servicemen and women were put at risk by the switch in batteries,” said McIntosh at the time of the settlement. “It is a relief to finally resolve this issue and know that the substitute batteries are no longer being used.” McIntosh is now gearing up for the second part of the suit, the wrongful termination part. “We are not interested in settling that case,” McIntosh’s attorney Clayton Halunen said. “He wants to tell his story publicly at trial.” Trail is tentatively set for spring 2015. In the interim, we can only applaud.
Prior to starting Hunter Laboratories in 2005, Chris Riedel had been founder and CEO of three profitable health care companies. His business philosophy then, and now, is simple: offer innovative products and services at fair market prices. When Mr. Riedel entered the California laboratory business, however, what he found was shocking: a deeply entrenched culture of corruption, kickbacks, and price gouging which was siphoning hundreds of millions of dollars from California’s Medicaid program. Mr. Riedel was left with three options: join the fraud himself, close up shop and go home, or utilize the False Claims Act to try to clean-up the industry. In 2005, Mr. Riedel filed seven qui tam cases under California’s False Claim Act alleging that Quest Diagnostics, LabCorp, Health Line Clinical Labs, Westcliff Medical Labs, Physicians Immunodiagnostic Laboratory, Whitefield Medical Laboratory, and Seacliff Diagnostics Medical Group had all participated in a broad pattern of fraud where each routinely overcharged California Medicaid, while discounting services to doctors for non-Medicaid patient referrals. The California Attorney General’s office joined the seven cases in 2008. In 2011, Quest Diagnostic settled for $241 million (the largest settlement under the California False Claim Act) and LabCorp settled for $49.5 million. Five other cases are still pending. Today, Hunter Laboratories is now an industry leader in heart disease, stroke, and dementia testing.
Jill Osiecki, a former sales representative at Amgen Inc., was a principle whistleblower in a 2004 False Claims Act suit against Amgen that alleged the drug manufacturer paid kickbacks and participated in off-label marketing of the drugs Aranesp, Enbrel, and Neulastra. Ms. Osiecki alerted government officials about Amgen’s fraudulent practices, and played an influential role in building the case against Amgen by wearing a wire to thirteen sales representative meetings. Amgen settled the case in December of 2012 for $762 million. Her complete story can be found here.
Dr. Tom Cantor is President and founder of Scantibodies Laboratory, Inc., a small family owned company that manufactures assay components that enable the production of sensitive and accurate diagnostic tests for a wide variety of medical conditions. In 2001, Scantibodies had a minor stake in the parathyroid hormone test (PHT) market dominated by Nicholas Diagnostic’s (NID) (a subsidiary of Quest Diagnostic) product, Advantage Intact Parathyroid Hormone Assays. Dr. Cantor discovered that NID’s tests were generating faulty and abnormal results that led to patients being over prescribed expensive and potentially harmful Vitamin D medications. Dr. Cantor alerted NID officials; the company took no action. He then mounted a domestic and international outreach campaign to alert healthcare providers to NID’s faulty PHT tests; the industry took no action. In 2004, Dr. Cantor filed a qui tam lawsuit alleging that Quest and NID’s faulty medical tests were causing healthcare providers to bill Medicare and other federal healthcare programs for unnecessary and harmful vitamin D drugs to treat inaccurately diagnosed diseases. Quest settled the case in 2009 for $302 million, of which Dr. Cantor received $45 million. After the settlement, Dr. Cantor told reporters, “the money part was never the motivation . . . It was always about patients. It broke my heart and was shocking what a company would do for money.” In the spirit of furthering service to patients, Dr. Cantor used his $45 million award to fund research to treat drug resistant infection like HIV and hepatitis.
After closing his own “mom and pop” pharmacy, Bernie Lisitza went to play in the big leagues and landed a job with Omnicare — the nation’s largest pharmacy for nursing homes. However, Omnicare was doing something no mom or pop ever would. In complete disregard of medical advice, the pharmacy routinely switched Medicaid patients’ medicines for more expensive prescriptions. Mr. Lisitza went to his superiors to discuss the fact that profits were prioritized over patients, and was fired for his concern. Undaunted, Mr. Lisitza began to temp at other local pharmacies. Unfortunately, he encountered similar fraudulent practices at CVS and Walgreens. Fed up with the deception, Mr. Lisitza filed qui tam lawsuits against all three companies and, in the end, recovered more than $121.2 million for U.S. taxpayers — $50 million from Omnicare, $37 million from CVS, $35 million from Walgreens. Mr. Lisitze is not yet done. Two other cases, one against Par Pharmaceuticals, Alphapharm and Genpharm (joined by DoJ and several states), and a second filed against Johnson & Johnson for kickbacks paid to Omnicare (joined by DoJ and several states), are still outstanding and waiting final resolution.
When the dust finally settled on the qui tam cases filed by Blair Hamrick and Greg Thorpe, their lawyers summarized the facts as succinctly as possible: this was the “most expensive failed corporate internal investigation” ever, with GlaxoSmithKline paying out $3 billion ($1 billion to settle charges made by Mr. Hamrick and Mr. Thorpe) for illegal marketing of a wide range of prescription drugs. Rather than stop the fraud when reported internally to the highest reaches of GlaxoSmithKline, the company calculated that the fraud was likely to be more profitable than the sanctions. In the end, GSK fired Mr. Hamrick and Mr. Thorpe, and the company continued the fraud for another 10 years with a broad scheme of kickbacks, off-label marketing, and medical misrepresentation used to market Advair, Wellbutrin, Paxil, Lamictal, Zofran, Imitrex, Lotronex, Flovent and Valtrex.
After working for Merk for 11 years, H. Dean Steinke was promoted to Michigan’s district sales manager for the company. As district sales manager, Mr. Steinke quickly became aware of illegal marketing practices that the company was using to sell Zocor, Vioxx, and other drugs. At the core of the scam were 92 percent discounts on the price of long term use drugs sold to hospitals. With the drugs provided for almost free, patients ended up leaving the hospital with prescriptions for more expensive drugs that were no better than their competitors – a kind of kickback, as well as a violation of the Medicaid Best Price rule that was costing Medicare and Medicaid vast sums of money. Steinke reported his concerns internally to Merck, but was ignored. After filing a False Claims Act case, Mr. Steinke’s position was vindicated when Merck and the U.S. Department of Justice settled his case, and another filed by a second whistleblower, for a total of $650 million. Mr. Steinke’s award for helping the federal government collect $400 million, was $68 million.
James Alderson was the first of more than two dozen whistleblowers to file cases against Columbia-HCA and its affiliates. Mr. Alderson was the Chief Financial Officer of the Quorum Health Group in Whitefish, Montana when it was acquired by Columbia-HCA. From the moment of acquisition, Columbia-HCA was clear that it had a different way of doing accounting — one that involved two sets of books. Nine days after calling those accounting practices into question, Mr. Alderson was fired. It was while working on a wrongful termination lawsuit that Mr. Alderson began investigating Columbia-HCA’s accounting practices. Mr. Alderson eventually filed a whistleblower lawsuit against Quorum for its Medicare billing practices – a lawsuit that was eventually settled for $95.5 million and which led to other whistleblower lawsuits against Columbia-HCA. These other lawsuits eventually resulted in two other settlements of $840 million and $631 million respectively. In awarding him his whistleblower’s share in the Quorum case, Judge Steven Merryday noted that Mr. Alderson “tenaciously pursued this case at substantial personal, financial and professional cost” to himself.
When the prescription drug industry tried to bribe Joe Gerstein, they picked the wrong man. Dr. Gerstein, a former medical director of the Tuft’s University health plan, was offered a $40,000 unrestricted research grant by TAP pharmaceuticals if he would keep their prostate cancer drug, Lupron, on the HMO’s list of preferred drugs. Unfortunately for TAP, Dr. Gerstein was a longtime opponent of the “shams, scams and schemes” that permeated the health care industry, and he wrote regular newsletter articles exposing the corruption. Outraged by TAP’s attempts to bribe him, Dr. Gerstein went to the FBI and even wore a wire so the bribe offer could be taped. The government still took no action, however, so Dr. Gerstein filed a False Claims Act suit to try to stop the corruption. In the end TAP Pharmaceuticals settled his case, and another related whistleblower lawsuit, for a total of $875 million. At the time, this was the largest health care fraud settlement in history. Dr. Gerstein split his portion of the whistleblower reward with Tufts and used much of the rest to fund a foundation devoted to improving science-literacy in Roxbury, Massachusetts.
National Medical Care approached the four partners at Ven-A-Care with a carrot and a stick: they could fold up shop and join with NMC, or NMC would drive them out of the supplemental nutrition business in Key West, Florida. The Ven-A-Care partners declined the offer and NMC did indeed drive them out of business. But something was not quite right, and the four partners began looking into the way NMC was doing business. What they found was that NMC was paying kickbacks to doctors, prescribing medicines and services that were not needed, and billing Medicare and Medicaid exorbitant sums far in excess of what the supplements actually cost. The Ven-A-Care partners went to the Federal Government, but the government was not very interested. Stymied by government inaction, Ven-A-Care filed a False Claim Act case. The case against NMC was eventually settled for $486 million, but it was not the first or last case pursued by Ven-A-Care. Since January of 2001, Ven-a-Care has helped return over $2.5 billion more dollars back to the federal government and the states in a series of drug pricing cases alleging widespread manipulation of “Average Wholesale Price” (AWP).
Robert Merena is one of three people that filed separate whistleblower lawsuits against SmithKline Beecham Clinical Laboratories which resulted in a combined $325 million settlement. Mr. Merena was a billing system employee for SmithKline and he noticed that the company was routinely bundling tests so that the government was billed for services not ordered by physicians, and then unbundling those tests when bills were calculated. The result was that Medicare was paying many times more than it should have been. In determining his whistleblower reward, Judge Donald W. VanArtsdalen noted that “it is difficult to conceive of any case where an ‘original source’ could have been of greater help” to the government.
Brett Roby blew the whistle on Boeing’s knowing use of defective parts that were installed in Chinook heavy-lift transport helicopters used by the U.S. Army. Due to defects in the casting of the metal used in the gears, several helicopters crashed, and 15 soldiers and 2 Boeing engineers were killed. Mr. Roby was a former quality-control engineer at SPECO, the contractor making the defective gears using a Boeing-patented alloy. Though SPECO and Boeing were told about the defects, both companies ignored repeated warnings. “My primary goal in this litigation was to ensure the safety of the men and women who fly in these aircraft,” said Mr. Roby. Boeing settled the case for $54 million plus attorney fees, and the U.S. Army replaced the defective gears in the helicopter rotors.
John Schilling, a former reimbursement specialist for Columbia/HCA who worked in the company’s Fort Myers, Florida office, was one of the principal whistleblowers that resulted in the largest False Claims Act fraud settlement in history, involving 30 US Attorneys, 22 FBI field offices, and inspectors general from HHS, OPM, and the Department of Defense. Mr. Schilling provided the government a laundry list of frauds perpetrated by Columbia-HCA and also filed a False Claim Act case against KPMG-Peat Marwick, which had advised six hospitals owned by a Columbia-HCA predecessor to set up reserve funds in case the inflated costs they were reporting were discovered in a Medicare audit. KPMG settled their False Claims Act case for $9 million, while Columbia-HCA eventually settled a wide swath of fraud allegations, leveled by 30 different whistleblowers, for a combined total of $1.362 billion plus an additional $108 million in criminal fines.
Sal Barbera is a former hospital CEO in both the proprietary and non-profit sector in Florida, Nevada, Louisiana, and Kentucky. In 1997, Mr. Barbera filed a qui tam action alleging that Tenet Healthcare Corporation had entered into a number of prohibited financial relationships that led to millions of dollars in improperly billed Medicare referrals. The resulting 2004 settlement for $22.5 million was, at that time, the largest False Claims Act recovery the United States had ever obtained from a single hospital arising out of Stark Statute violations. Today, Mr. Barbera is a Fellow in the American College of Healthcare Executives and an adjunct teacher at Florida International University. He is also a founding partner, with John Schilling, of EthicSolutions LLC, which provides consultation services in all areas of healthcare fraud to attorneys and various government agencies.
Brian Shields is a former Army helicopter pilot and who values honor and integrity. It came as a shock to him when, as a product manager for Genentech, he discovered his own company was providing doctors with exaggerated survival data for the lung cancer drug Tarceva. Here was a clear case where profits were being put before patients, and real harm was the byproduct, as time was of the essence in treating cancer. While Tarceva was effective with patients who had an EGFR gene mutation or who had never smoked, it was only effective about 10% of the time for the general population. As Mr. Shields observed in his False Claims Act complaint, “cancer patients only get one shot at first-line treatments, and defendants took that opportunity away.”
By lying about the effectiveness of their Tarceva drug, Genentech caused Medicare and Medicaid to pay for a treatment that was not effective and which, in many cases, causes real patient harm. When Mr. Shields brought his concerns to management, he was he was “not being a team player.”
Brian Shields could have put down his head and continued for Genentech, or he could have quietly walked away. Instead, he bravely came forward as a whistleblower, and filed a qui tam action to set things right. Over the course of the next five years, Mr. Shields aiding the government investigation as only a former company insider could. For Brian Shields, that was the only option. “This was about lives,” he said. Indeed it was – about lives saved because a courageous person stood up and spoke up to end bad medicine pursued solely for profit.
Chuck Bates was instrumental in uncovering a pervasive “Kyphoplasty” billing fraud at over 100 hospitals across the United States. As an employee at Kyphon Global (acquired by Medtronic Spine LLC in 2008) Mr. Bates discovered that the company was engaged in the practice of persuading hospitals to bill Kyphoplasty procedures as inpatient rather than outpatient procedures in order to drive profits. Kyphoplasty’s are generally billed as outpatient procedures as the procedure and patient recovery time take little more than a few hours.Mr. Bates first qui tam action (filed in 2005) settled in 2008 by Medtronic Spine LLC and netted $75 million in recoveries. Mr. Bates filed a second FCA suit in 2008 that resulted in an addition $34 million in recoveries from 55 hospitals. Because of Mr. Bates’ whistleblowing efforts, the U.S. Government has recovered more than $149 million from kyphoplasty-related cases.
Cheryl Eckard is a chemist and pharmaceutical manufacturing quality control expert. Hired in 2002 by GlaxoSmithKline to oversee and solve problems at the company’s Cidra, Puerto Rico plant, she found a factory gone wild with outdated equipment, broken protocols and a management unable to achieve its mission. Eckard reported to GSK that the Cidra plant’s water system was contaminated, that drugs were being made in unsterile conditions, and that tablets of different strengths were being mixed in the same bottles. In response, GSK fired her. Concerned about patient health, Eckard went to the FDA, which began a criminal investigation. In February of 2004, Eckard filed a qui tam case. In 2005, the FDA seized $2 billion worth of GSK drugs made at the Cidra plant — the largest seizure in FDA history. In October of 2010, GSK agreed to pay $750 million ($600 million civil and $150 million criminal) to settle False Claims Act allegations it knowingly sold contaminated drugs made at Cidra. This settlement was the first time the False Claims Act has been successfully used to hold a drug maker accountable for violations of manufacturing standards. As part of the federal settlement, Eckard and her attorneys received $96 million, the largest-ever recovery by a single whistle-blower in an FCA case.
Robert Heiden began his career as a sales representative at Boehringer Ingelheim Pharmaceuticals Inc. but soon left for Hawthorn Pharmaceuticals Inc. after discovering that Boehringer was engaged in kickback and off-label marketing schemes for Aggrenox, Atrovent, Combivent and Micardis. After arriving at Hawthorn, Mr. Heiden discovered that Hawthorn too was engaged in fraud; this time the fraud was providing doctors with free samples of drugs to entice them to prescribe Hawthorn products. Mr. Heiden filed two qui tam actions, the first of which was settled in March 2011 with Cypress Pharmaceutical Inc. and its subsidiary, Hawthorn Pharmaceutical, for $2.8 million. Mr. Heiden settled his second qui tamaction in October 2012 against Boehringer Ingelheim Pharmaceuticals for $95 million.
Harry Markopolos is a former securities industry executive with Rampart Investment Management and an independent forensic accounting and financial fraud investigator. In 2000, 2001, and 2005, Mr. Markopolos notified the U.S. Securities and Exchange Commission (SEC) about a massive Ponzi scheme being perpetrated by Bernie Madoff, going so far as to fly to Washington and Boston to present a 21- page memo detailing the scope of the irregularities. Only after the Ponzi scheme collapsed in the wake of the 2008 financial downturn, and Madoff was turned in by his own son, did the SEC being to actually investigate the fraud. Mr. Markopolos’ advice to the SEC and his 2009 testimony to Congress are what launched the push to pass an SEC and CFTC whistleblower law modeled on the False Claims Act. Mr. Markopolos’ now works as a forensic accounting analyst for attorneys who sue companies under the False Claims Act and other compensated whistleblower laws.
Craig Thomas is the former Regional Vice President of Operations for Sound Impatient Physicians (Sound), a company that provides more than 700 hospitalists and post-acute physicians to 70 hospitals and a network of post-acute facilities in 22 states. When Mr. Thomas became aware that Sound was routinely upcoding hospital bills, he attempted to rectify the situation by reporting the irregularities through the company’s internal compliance and management channels, only to be rebuffed. In 2009, Mr. Thomas filed a qui tam action against the hospital physician provider, alleging that Sound knowingly upcoded nearly 90 percent of visits to more expensive levels than actually provided. In July 2013, Sound Impatient Physicians settled Mr. Thomas’ allegations for $14.5 million.
Mark Westlock, former Pfizer district sales manager, is one of six whistleblowers who filed qui tam lawsuits against Pfizer, Inc. and is subsidiary Parmacia & Upjohn Company that lead to the largest criminal and civil health care fraud action ever brought by the U.S. Department of Justice. Mr. Westlock’s suit alleged that Pfizer engaged in kickback schemes with doctors and the off-label marketing of the anti-inflammatory drug Bextra, the anti-psychotic drug Geodon, the anti-epileptic drug Lyrica, and the antibiotic Zyvox. Of note, Mr. Westlock’s claim specifically raised the flag that Pfizer actively participated in the off-label marketing of the anti-psychotic drug Geodon to children. To date, the FDA has not approved children’s use of Geodon. The relator’s share of $102 million in this case was divided among Mr. Westlock and the five other whistleblowers.