Whistleblower Law Blog

Banking Industry Settlement Comes On the Backs of Whistleblowers

LaBovick Law — Tue, 14 Feb 2012 12:56:27 -0500

There is no doubt that whistleblowers are changing America for the better. Just last week a new Act was signed to help homeowners who were the victim of malicious bank persecution trying to steal them of their home. Further, the US Attorney’s office recently announced a multi-state government settlement with five of the largest banking institutions to make up for their foreclosure abuses which caused the financial meltdown in the American Economy over the last three years. The key to these settlements was not the victims. Due to the culture of our society the victims here are portrayed as wrongdoers, so we needed industry insider’s to gather the information necessary to take down these huge financial institutions. Without the insider’s information we would have never had poof of how the giant banking industry scammed the system and stole from homeowners and all taxpayers. Thankfully, a few employees did the right thing. Most of them lost their jobs and will be shunned in the industry for many years to come. However, what was happening was almost criminal. We are still fighting with one of these institutions that foreclosed on a couple when they never missed a payment. After 18 months of litigation and going through hell, the bank still will not admit to wrongdoing. We will see what becomes of our suit in the near future after this settlement.

The Grimm Act and Why it Might Hurt Whistleblowers

LaBovick Law — Wed, 01 Feb 2012 11:19:30 -0500

At the present time politicians wonder “Why are we so hated?” They sit in total befuddlement about why they are “So poorly regarded.” Basically, politicians are about as loved and trusted as snakes, alligators, used car salesman and ambulance-chasing-low-rent lawyers. But then you get stuff like New York congressman Michael Grimm’s new bill that gives Wall Street and big corporations the right to rip off Americans and not have to worry about Whistleblowers any longer! Of course, the rest of the politicians are lining up to pass the bill because big business and Wall Street needs a little legal protection from being called out for ripping off America.

The Grimm Act, which is listed as House Bill 2483, is being called the “Whistleblower Improvement Act” and was written and created to take down the corporate whistleblower protections we finally have in the United States. It is basically a bill to stop Whistleblowing! America needs to read this bill and write their congressperson to stop being a corporate lackey and vote against the bill. The bill creates a loophole in the two most important whistleblower laws to come out over the last 50 years. The first is the Dodd-Frank Act, which reformed Wall Street, and the second is the Sarbanes-Oxley Act, which reformed corporate America and their creative accounting departments and led to things like Enron and World Com! The US Securities and Exchange Commission (SEC) is a busy agency. They cannot investigate every company in America. However, when they receive a tip or a report from an insider, they are able to quickly identify the wrongdoers and bring them to justice. The Grimm Act will undermine the SEC’s ability to take action on those tips. Under the new law, the SEC would be required to put the wrongdoers on NOTICE and warn them that their company is a suspect. Do you think that may “tip them off,” so they cover their tracks? I DO! This is the same thing as telling the police to warn a drug dealer they are about to come over and arrest him and ask him to “not destroy the drugs and evidence”! Law enforcement cannot be effective in this environment, and the American people deserve better legislation than this corporate protectionist bill.

Federal Law Violations at Countrywide Home Loans and Bank of America

LaBovick Law — Tue, 24 Jan 2012 11:47:50 -0500

I have one question: When will the prosecutions start? What prosecutions? Financial institutions across America are filled with high ranking officials who all participated in creating a culture and system of defrauding the American public and crashing the American economy with false and fraudulent loans! Now the evidence is becoming overwhelming. Instead of giving banks bail-out money, we should have asked the government to give them one-way tickets to jail. Not all banks are bad, and not all bad loans are fraud. But the huge amount of loans were issued on fraudulent signatures and false reports, and those fraudulent activities were caused and perpetrated by bank officials who have yet to be called to justice for their misdeeds.

Last month Eileen Foster appeared on a national news show to discuss the numerous federal law violations, which occurred at Countrywide Home Loans while she worked there. Her testimony is proof that the financial debacle that went on at Countrywide and later Bank of America (BOA) was directly related to the fraud created by bank managers and workers to push through home loans. The show was “60 Minutes,” and the link to that segment is below. “60 Minutes” is the most trustworthy news program ever produced in TV history. The fact that “60 Minutes” vetted Ms. Foster and found her to be credible and able to testify shows just how bad the corruption was at BOA and Countrywide Home Loans.

Factually, Foster worked at Countrywide starting in 2005 as a senior official. After being promoted a number of times she eventually landed in the position of Senior Fraud Risk Manager. This position put Foster as close to the epicenter of the financial collapse of the US Housing Market as anyone in history. That role allowed Foster access to data that literally detailed a mountain of evidence that corporate employees had forged signatures of clients and barrowers, and altered or simply created fake documents to prove up fake assets or income and push through poorly-placed loans for people who couldn’t afford them, on property what was never worth the amount of the loan. The amount of evidence was shocking; the degree of total fraud that was being done to manipulate the bank’s automated system of evaluating property value is scandalous as well.

After working in this role for a few months, Ms. Foster realized that the fraud was not local to her city but was being perpetrated across the United States. She found the same mind-blowing fraud in Miami, Las Vegas and Chicago. She then found it in San Diego, Los Angeles and Cincinnati. In other words, the fraud was being perpetrated across the entire business platform. It had become de-facto business as usual and was no longer even viewed as fraud – it was just business!

Ms. Foster figured out that the company was allowing the employee relations department (ER) and their lending managers to collude and not report fraud to the bank’s normal internal reporting authority. This was being done to keep the fraudulent activity under wraps and allowed the loan officers to meet inflated closing productivity numbers, which became the norm at the bank. To keep the fraud going as long as possible, the company would allow management to retaliate against any employee who dared to question or “Whistleblow” on the banks fraud!

Prior to Countrywide merging with BOA, Ms. Foster filed a whistleblower complaint with the ER Division at Countrywide. Countrywide never told BOA about Ms. Foster’s allegations. Instead they did just the opposite. Countrywide instructed their ER Department to investigate and bring a retaliatory action against Ms. Foster instead. Now that is turning justice on its head.

Once BOA took over, Ms. Foster hoped she was going to a more honest and better run company. BOA took foster in as a Senior Mortgage Fraud Investigator. She accepted that position. It was within that position that Ms. Foster finally learned that Countrywide was wrongfully investigating her. They were trying to use that investigation to cover her complaints and create a reason, outside of needing to get rid of a whistleblower, to terminate her employment with BOA. She found out that the company investigators were trying to bully Countrywide’s staff into giving negative testimony against Ms. Foster. When BOA took over Countrywide’s investigation of Foster, they decided to ignore the overwhelming evidence that the investigation was simple retaliation and instead they terminated her employment. They only did so after finding out that the US government regulators wanted to question her about Countrywide and BOA’s suspicious actions and reporting.

It wasn’t until Foster was terminated that she realized she needed to file a Sarbanes-Oxley Act (SOX) whistleblower complaint with the Occupational Safety & Health Administration (OSHA). She did so and challenged the termination. After a relatively short investigation, OSHA ruled on her complaint in September 2011. They found that Foster was the victim of whistleblower retaliation. They also found the retaliation was a violation of the Sarbanes Oxley employee protection guarantees. The Department of Labor wrote in the Order that Foster must be reinstated in her position. Further, BOA must pay her all her damages, including lost wages from the date of termination. Bank of America did not like this ruling, so they are challenging the OSHA ruling and requesting a hearing. We shall see what happens in the future.

Watch the “60 minutes” broadcast here.

If you have questions regarding any Whistleblower or Qui Tam Action, whether it is regarding the Sarbanes Oxley Act, the IRS Whistleblower Provisions or any Procurement or Health Care Fraud Qui Tam cases, please contact Brian LaBovick, Esq. at brian@labovick.com.

2011: A Great Year for Whistleblowers

LaBovick Law — Fri, 20 Jan 2012 16:26:31 -0500

The Securities and Exchange Commission (SEC) has offered awards totaling hundreds of millions of dollars to employee whistleblowers who reported wrongdoing at their companies. Based on these whistleblowers’ information, 220 companies were brought to justice in 2011. The employee reports resulted in the federal government’s recovery of billions of dollars. These reports had been made over the past few years to the SEC and the companies’ internal compliance programs.

The list of companies forced to repay the federal government is an impressive one. It includes Dell Inc., Qwest Communications, Citigroup, UBS Financial Services, Johnson & Johnson, JP Morgan, Deloitte and Touché, and General Electric Company.

Click here for the full list of companies.

Qui Tam & Whistleblower Cases - Two billion dollar days for the US Attorney in a row!

LaBovick Law — Thu, 19 Jan 2012 15:02:07 -0500

Two billion dollar days for the US Attorney in a row! On January 6, Johnson & Johnson settled a U.S. probe into their anti-psychotic drug, Risperdal, for $1,000,000,000! According to the Bloomberg news, J&J is going to resolve their long running dispute over Risperdal for a whopping $1 billion. This settlement should cover all the damages each individual state has against J&J as well as the US government’s federal claims. Given GlaxoSmithKlein just settled a claim for $3.2 billion, this settlement shouldn’t hurt J&J too badly. Johnson & Johnson is the largest health product company in the world. If Glaxo can pay $3 billion and that doesn’t count the civil claims against them for Avandia, certainly J&J is better off settling for $1 billion now. The civil settlement may not have included a possible plea deal against Johnson for criminal penalties! Now that is HARSH! They are going to pay $1 billion and STILL pay a criminal price for their allegedly illegal sales practices. The investigation against Risperdal has been going on since 2004. The allegation is that the company was “off label” marketing the drug. That means the drug was being marketed for uses that were not approved by the FDA.

In this case, the Whistleblowing Qui Tam Plaintiff could earn $150,000,000!

Interestingly, the civil cases against J&J for Risperdal have been varied, with two states finding for against the company while two other states found for the company. We will see how this settlement effects the pending civil litigation in the future.

Avandia Cases Are Getting Ready to Settle or Explode

LaBovick Law — Tue, 10 Jan 2012 16:44:51 -0500

Avandia cases are getting ready to settle or explode:

GlaxoSmithKlien is ready to either pay out or be bleed to death in Avandia cases. Recently they agreed to pay $3 Billion dollars to the Feds to avoid criminal and civil penalties and a trial. That case dealt, at least in part, with improper marketing of their defective drug, Avandia. Over the past few years Plaintiff lawyers have gathered and filed over 30,000 Avandia injury cases in a multidistrict litigation. This is because Avandia was supposed to control diabetes but was actually causing heart attacks. Glaxo knew of the heart attack danger but covered it up. Now Glaxo has settled over 10,000 of 30,000 cases in the MDL but is still fighting the remaining 20,000 claims. So far, (above the $3 billion dollars they paid the government), Glaxo has paid about $700,000 in claims to injured patients.

Now the court is getting impatient with Glaxo. The Judge recently gave Glaxo 75 days to settle up at least 85% of the remaining cases or they would be set for trial. It seems pretty obvious to all of us attorneys involved with Avandia, that after paying a $3 BILLION dollar fine and $700 MILLION in damages, Glaxo KNOWS Avandia was a bad drug and should settle the remaining cases.

We will see that Glaxo actually does, but my bet is their bank account is a lot deeper then the remaining cases. If they can pay the government and the first set of plaintiffs 3 billion 700 million dollars, they can settle up with the rest of the poor people they injured!

Defective Drug Companies Brought to Justice

LaBovick Law — Mon, 09 Jan 2012 11:27:47 -0500

HEY WHISTLEBLOWERS! Are you interested in making a huge amount of money? I am betting there are plenty of drug company executives and sales people who are salivating at the possibility of turning their employer into the government for illegal marketing schemes. Over the past few years, the health and drug industry has been busted for multiple violations of federal law and paid huge money in Qui Tam whistleblower cases.

The numbers on some of the cases are staggering. In many health care provider cases, the payouts have been in the hundreds of millions of dollars to settle Qui Tam Whistleblower lawsuits. When this happens, the Whistleblower is entitled to between 15% and 30% of the total funds recovered by the government.

Recently, the mega drug maker GlaxoSmithKline agreed to pay $3 BILLION dollars to the Federal Government to avoid civil and criminal penalties which government prosecutors alleged were created when Glaxo orchestrated an illegal marketing scheme for a group of their most popular drugs. The allegations included ripping off the Medicaid social funds program and promoting off label use for the drugs. This is the largest settlement between a drug company and the government related to illegal marketing practices in US HISTORY! It certainly beats the pants off the 2009 settlement Pfizer paid of $2.3 billion.

This new agreement will close a long running chapter in Glaxo’s history. The US Attorney in Colorado and Massachusetts shared the investigation and prosecution of this mega case. The charges included off-label promotion of Wellbutrin a well known anti-depressantl and included the Government’s investigation into the often mentioned defective diabetes drug, Avandia. You may remember Avandia being taken off the market last year by the FDA unless it was given as a drug of last resport! This was because it was causing heart attacks instead of helping with diabetes, a somewhat consequential problem for Glaxo. Avandia was promoted as a safe drug when Glaxo knew that Avandia was causing heart attacks and strokes. (see the case of In re Avandia Mktg., Sales Practices, and Prods. Liab. Litig., MDL No. 1871 (E.D. Pa. consolidated Feb. 28, 2008).)

I am sure my Qui Tam clients are dreaming about being the Qui Tam Whistleblower’s in a $3 BILLION DOLLAR pay out case. Even at the statutory minimum payout of 15% the Whistleblower in this case should receive a nice check for $450,000,000.00!!! Now that is a good day at the office! The best part of it all is that a company that was breaking the law was brought to justice!

LaBovick Law Group Sues Wells Fargo Bank for Terminating Whistleblower

LaBovick Law — Tue, 15 Nov 2011 08:59:40 -0500

PALM BEACH GARDENS, FLA. – When a Palm Beach County Wachovia Bank branch manager was reprimanded for not meeting exorbitant numbers, she investigated why her colleagues were. She found evidence of multiple violations of the “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001” also known as the “Patriot Act.”

The LaBovick Law Group filed a civil litigation lawsuit in September alleging Wells Fargo, N.A. terminated an employee after she brought evidence of these "Patriot Act" violations to her superiors’ attention.

FULL PRESS RELEASE: Wells Fargo Bank Sued for Awareness of Violations of Patriot Act

Beware! Don't play with Qui Tam matches - You Can Get Burned!

Brian F. LaBovick, Esq. — Sun, 17 Jul 2011 07:17:20 -0500

Don't Play with Qui Tam Matches without being familiar with the statute - You will get burned!

This week the United States District Court (USDA) Sixth Circuit (6th Cir.) confirmed that the Plaintiff was liable for filing frivolous Qui Tam Actions. In the case of Stalley v. Mt. States Health Alliance, 2011 U.S. App. LEXIS 13895, No. 10-5211/5212 (6th Cir. Jul. 8, 2011) the District Court for the Eastern District of Tennessee held that the Plaintiff had filed a frivolous Qui Tam action against the Defendant for failure to abide by the Medicare Secondary Payer Act (MSPA).

There is no actual authority to file a Qui Tam action for such a violation. However, on it's face, it would seem that breaching any portion of Medicare could straddle you Qui Tam liability. The court said no. To make matters worse, the court granted the Defendant sanctions against the Plaintiff in the amount of $276,589.00. Feeling confident that the MSPA should apply, the Plaintiff appealed.

UH OH! The USCA 6th said WE AGREE and AFFIRM the Sanctions. They also found that the sanctions should be held against plaintiff AND HIS COUNSEL!

The real lesson here is that an unfamiliar legal niche, such as Qui Tam, is a hard place to practice if you don't know the rules.

Three Miami Healthcare Workers convicted in $23M Medicare Fraud Scheme

LaBovick Law — Mon, 11 Jul 2011 08:01:52 -0500

A federal jury convicted three former health care workers for their roles in a $23 million HIV injection and infusion Medicare fraud scheme.

Jose Diaz, Lisandra Aguilera, and Estrella Rodriguez were all once employed by Metro Med of Hialeah Corp. The Metro Med clinic was allegedly a facility that helped HIV positive patients receive medically necessary infusions and injections. Many of these patients were Medicare beneficiaries. According to prosecutors, the fraudulent clinic charged for infusion therapies which were medically unnecessary or not provided at all.

In the operation of their fraudulent Medicare scheme, the group would provide kickbacks to patients who allowed them to use their Medicare number to fraudulently bill the system. In some instances the workers would falsify the blood test results, making it appear as if certain injections and infusions were medically necessary.

The scheme began in April of 2003, not long after the Metro Med clinic opened. The group continued its practice of Medicare fraud all the way up until October of 2005. Although they billed Medicare for an estimated $23 million, the group received only about $11.7 million in Medicare payments.

Diaz has been sentenced to 54 months in prison, while Aguilera received 70 months and Rodriguez received 57 months. Damaris Oliva, former owner of Metro Med, was previously sentenced to 82 months in prison for her role in the scheme. Dr. De Los Rios has been convicted of the conspiracy charges against him, and will be sentenced on June 27th for crimes.

If you are considering bringing a qui tam or whistleblower suit against a former employer, contact a qui tam attorney to evaluate the strength of the complaint and protect your rights in the claim.

Miami doctor convicted in $23M Medicare fraud- S FL Business Journal

Florida Doctor Convicted in $23M Medicare Fraud Scheme - HealthLeaders Media

Three Medical Professionals Sentenced in $23 Million Medicare Fraud Scheme - KC Info Zone

Three Miami-Area Medical Professionals Each Sentenced to Prison for Roles in $23 Million Medicare Fraud Scheme - DOJ

Two Florida Corporations Plead Guilty in $200 Million Medicare Fraud Scam

LaBovick Law — Wed, 22 Jun 2011 11:31:19 -0500

Two Florida Corporations, American Therapeutic Corporation (ATC) and Medlink Professional Management Group Inc., pleaded guilty to a Medicare fraud scheme of $200 million according to the Departments of Justice and Health and Human Services (HHS) announced.

ATC operated partial hospitalization programs (PHPs) in seven different locations throughout Florida. A PHP is a form of intensive treatment for severe mental illness. Medlink operated as a "management company” for health care businesses. In reality, ATC and a related company, the American Sleep Institute (ASI), were Medlink’s only clients.

ATC and Medlink are each charged with conspiracy to commit health care fraud in a superseding indictment unsealed on Feb. 15, 2011. ATC is also charged with health care fraud and conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.

Lawrence Duran, 48, and Marianella Valera, 39, owners of American Therapeutic Corp., were indicted back in October and 22 others -- including company employees, psychiatrists and patient recruiters -- have also been charged.

U.S. Attorney Wifredo Ferrer for the Southern District of Florida, stated the following:

The defendants altered patient files, diagnoses and medication types and levels to make it appear that patients being treated qualified for PHP treatments. This was done so that the defendants could fraudulently bill Medicare for more than $200 million in medically unnecessary services. We are pleased to have put these unscrupulous operators out of business.”

Special Agent in Charge John V. Gillies of the FBI’s Miami Field Office was on target when he stated the following:

“No matter what the scheme or how elaborately it was disguised, personal and corporate greed by these two corporations and their owners defrauded taxpayers of millions of dollars. Ultimately, health care fraud robs from the elderly and disabled.

As indicated in this case, fraud is usually not accomplished alone. It takes one to mastermind and several players to make it work. This is how a whistleblower comes across information that his company is engaging in fraudulent practices.

Since March 2007, thanks to the valiant efforts of the Medicare Fraud Strike Force, over 1,000 defendants who collectively have billed the Medicare program for more than $2.3 billion, have been prosecuted on fraud charges.This could not have been done without the combined efforts of whistleblowers and the Health Care Fraud Prevention and Enforcement Action Team (HEAT).

Under the False Claims Act. whistleblowers have an added incentive to report fraud. This Act allows whistleblowers to receive a reward of 15-25% if the government intervenes in the lawsuit. If the government chooses not to proceed, the whistleblower can pursue the case on behalf of the government alone and will be entitled to 25-30% of the governments proceeds in qui tam or false claims cases.

If you are considering bringing a qui tam or whistleblower suit against a former employer, contact a qui tam attorney to evaluate the strength of the complaint and protect your rights.

Click on the following link to read more on the following links:

Two Miami-Area Corporations Plead Guilty to More Than $200 Million Medicare Fraud - FBI

Couple pleads guilty to Medicare Fraud - Sun Sentinel

Understanding Qui tam and How the False Claims Act works - Whistleblower Law Blog

Florida Radiology Clinic settles Qui Tam suit for $3 Million

LaBovick Law — Tue, 21 Jun 2011 19:11:18 -0500

The U.S. Justice Department recently announced that a $3 million settlement had been reached in the case of a Florida radiology clinic that violated the Medicare False Claims Act.

The case was filed in 2009 after two physicians employed by the radiology clinic effectively blew the whistle on the violations and each became a relator in a qui tam suit.

Each relator claimed that the violations to the Medicare False Claims Act occurred during the period between 2000 and 2008. Essentially, the physicians alleged that Midtown Imaging, LLC and the former owners of the clinic, listed as Midtown Imaging, P.A. and PBC Medical Imaging, embarked upon improper financial relationships with other physicians and physicians groups.

The False Claims Act is aimed at protecting the rights and interests of patients through ensuring that doctors make choices for their care based on decisions that are not financially motivated. Just since January of 2009, the Department of Justice has been able to recover some $5.7 billion dollars through successful prosecution under the Medicare False Claims Act.

Wifredo Ferrer, U.S. Attorney for the Southern District of Florida hailed this latest ruling as a great success for the False Claims Act. He acknowledges the scarcity of Medicare funds and also recognizes how heavily some Americans must rely on Medicare to cover the basic costs of their health care. To that end, Ferrer reiterated the U.S. government’s commitment to fight fraud against the Medicare system and asks that any potential whistleblowers come forward with evidence of abuse or fraud.

It is through the actions of brave whistleblowers such as the former employees of Midtown Imaging, LLC that qui tam actions are prosecuted and successfully tried. We need more brave people to stand up against corruption and fraud.

Whistleblowers have the satisfaction of doing the right thing when bringing suit under the False Claims Act. As an incentive, the False Claims Act allows for a reward of 15-25% for the relator if the government intervenes in the lawsuit. If the government resists involvement, the plaintiff may decide to pursue the case alone and will be entitled to 25-30% of the award. In the Midtown Imaging case, each relator is now entitled to $600,000.

If you are considering bringing a qui tam or whistleblower suit against a former employer, contact a qui tam attorney to evaluate the strength of the complaint and protect your rights.

Click on the following link to read more on

Florida Radiology Clinic and Former Owners to Pay $3 Million to Resolve Medicare False Claims Act Allegations - DOJ

Understanding Qui tam and How the False Claims Act works - Whistleblower Law Blog

The Impact of Supreme Court Decision on future False Claims Act cases

LaBovick Law — Fri, 17 Jun 2011 13:15:16 -0500

Did use of information obtained by the Freedom of Information Act (FOIA) just become a little less free? The recent Supreme Court Schindler Elevator Corporation vs. US ex rel. Kirk decision in a False Claims Act (FCA) case sheds some light on this topic. The Supreme Court ruled five to three that information obtained via the FOIA cannot be used for pursuing a claim under the FCA.

To understand the meaning of the Supreme Court's ruling and its potential impact on the role of whistleblowers, it may help to better understand the three parts of this case: The Freedom of Information Act, the False Claims Act, and the specific circumstances of the Schindler vs. Kirk case.

Freedom of Information Act
The Freedom of Information Act went into effect in 1967. It allows for disclosure, in full or in part, of information that has previously been unreleased by the federal government. Under the law, most documents produced by the federal government are available for scrutiny. Exclusions include anything that might threaten national security, hinder law enforcement efforts, or reveal commercial or financial trade secrets, amongst other things.

False Claims Act
Enacted during the Civil War, when many people were fleecing the Union Army, this law allows an individual person to act on behalf of the federal government to file actions against a company trying to falsely bill or exploit the government. This provision is called qui tam and in the case of a successful suit by the government, the person who files the claim receives a portion of what the government receives. In essence, the law rewards whistleblowers with a portion of whatever money the government recoups.

There is a caveat in this law, though: Suits cannot be based on public information about a company, such as information from the news media or a hearing. This “public disclosure bar” is meant to prevent opportunistic lawsuits against companies.

Schindler Elevator Corporation vs. US ex rel. Kirk
To make a complex legal story short, Daniel Kirk filed a qui tam suit against his former employer, the Schindler Elevator Corporation. Mr. Kirk, a Vietnam vet, felt that the company was in violation of a 1972 law that required companies not to lock veterans out of jobs and promotions.

Mr. Kirk's claims against his former employer were based in his own experience, but also through reports his wife obtained via the Freedom of Information Act. In the Supreme Court's recent 5-3 decision, they dismissed Kirk's case citing that this latter source of information violated the public disclosure bar of the FCA.

Impact
This case will have quite an impact on future qui tam/ whistleblower cases. The dissenting judges seem to concur. In Justice Ruth Bader Ginsberg's dissent, she stated the following:

"The decision "severely limits whistleblowers' ability to substantiate their allegations before commencing suit."

Whistleblowers bringing future False Claims Act cases must use their own experience. Their claim can't rely upon information obtained via the FOIA. The majority opinion of the Supreme Court argued that this will prevent parasitical lawsuits; the dissenting members of the Supreme Court fear that the outcome of this case.

We encourage whistleblowers not to be disheartened by this recent decion. If you have firsthand knowledge about fraud against the government, come forward and report the fraud. Due to whistleblowers stepping forward the government has collected billions in revenue from penalties and fines from the wrongdoers. Also, whistleblower rewards are in place for whistleblowers bringing information that is helpful in uncovering the fraud.

Click on the following link to read more on Supre me Court Makes it Harder to Hold Contractors Accountable for Fraud - HuffingtonPost.com

Understanding How The False Claims Act Works - Whistleblower Law Blog

Florida Tax Preparer Convicted of Tax Fraud

LaBovick Law — Thu, 16 Jun 2011 16:44:08 -0500

There are few certainties in life, with death and taxes being among those certainties. For the former owner of First Premium Financial Services in Florida, prison time for tax fraud has recently become a reality.

Inuka Rhaheed, former owner of First Premium Financial Services, was once, one of the Treasure Coast’s finest. As a former detective with the Fort Pierce Police Department, Rhaheed enjoyed a respected standing within his community. It’s easy to see why. People tend to trust law enforcement officers and former law enforcement officers. Law enforcement officers are typically, honorable citizens with integrity that uphold the law, not bend it, like Rhaheed.

Clients who trusted Rhaheed, his partner, Jacqueline, and First Premium employee Wilens Bertrand, to lawfully prepare and file their taxes were got more than they bargained for. First Premium drew a sizable clientele, many being law enforcement officers. Since Rhaheed, was a former detective, it was assumed that he had integrity and was ethical in his tax preparation services.

However, First Premium had a reputation in the community as tax preparation specialists that used deductions other preparers wouldn’t touch. What seemed a little bit of law bending was actually tax fraud.

During the trial expert testimony estimated that the U.S. government lost as much as $500,000 through the fraudulent activities of Rhaheed. He now faces a maximum of 11 years in prison. His wife may serve up to 5 years, while Bertrand may be jailed for as many as 8 years.

This is one instance in which crime most certainly does not pay. Rhaheed and his accomplices have forever tarnished their reputations and will likely never be able to recover their standing in the community, even after serving their prison terms.

If it seems too good to be true, it usually is not true or ethical. Don't get caught up in tax fraud or other scams, if you can avoid them. Report tax fraud and other fraudulent activities against the government.

Click on the following link to read more on

Former Detective and Tax Preparer Convicted of Tax Fraud in Florida

$9 M Medicare Fraud Scam lands Patient Recruiter 77 Month Prison Term

LaBovick Law — Thu, 16 Jun 2011 15:42:48 -0500

Fleeing to the Dominican Republic did not prove to be a fool-proof plan of escape for Reynel Betancourt. Betancourt, once an employee of Dearborn Medical Rehabilitation Center in Michigan, was sentenced to 77 months in prison for a scheme that defrauded Medicare of about $9 million.

Betancourt must pay approximately $6 million in restitution for his crimes against Medicare. As a rehabilitation center employee, Betancourt is said to have paid patients to sign fraudulent paperwork stating that they had received injections and other treatments that they did not actually receive. After receiving payment from Medicare, Betancourt laundered the money through phony corporations created for this express purpose.

After being captured in Miami and agreeing to a trial there instead of Michigan, Betancourt was charged with conspiracy to commit health care fraud and conspiracy to commit money laundering. He eventually plead guilty to the charges and was sentenced by U.S. District Court Judge Cecilia Altonaga in the Southern District of Florida on June 7, 2011.

Betancourt was charged in conjunction with Clara and Caridad Guilarte, two sisters who owned the Dearborn Medical Rehabilitation Center and colluded with Betancourt in the scam. The sisters were captured in Colombia in March 2011 and are still awaiting trial. However, considering the outcome of the Betancourt case, it appears the sisters are likely looking at prison time as a result of the conspiracy charges that are pending against them.

Betancourt admitted that the scheme occurred throughout 2006 and 2007. This is not the first case of Medicare fraud that has been successfully prosecuted in the United States since the Medicare Fraud Strike Force was founded in March of 2007. The strike force was created specifically to combat crimes such as those committed by Betancourt and the Guilarte sisters.

To date the strike force has charged in excess of 1,000 defendants for fraudulently billing Medicare. Combined, the 1,000 defendants have defrauded the Medicare program of some $2.3 billion. As the strike force garners continued success, it seems likely that Medicare will be losing less of its funds to fraud.

Click on the following link to read more on:

Patient Recruiter Sentenced to 77 Months in Prison in Connection with $9 Million Medicare Fraud Scam in Detroit

Drug Giant UCB pays $34.4 M to settle illegal Epilepsy Drug Promotion

LaBovick Law — Mon, 13 Jun 2011 12:09:12 -0500

All drug makers want consumers to believe that their product will be a miracle solution. While many prescription medications can have a palpable impact on the lives of patients, such benefits can only be accrued when the medication is being used for the right condition. However, pharmaceutical companies are held accountable for the efficacy of their drugs and their advertising claims marketing practices.

Recently, the drug maker, UCB has agreed to settle a qui tam lawsuit regarding the epilepsy drug Keppra, for $34.4 million. The North American Division of the Belgium pharmaceutical giant UCB admitted no wrong doing to the allegations, that Keppra, was marketed to treat other non-FDA approved conditions, such as headaches, migraines, and other pain based conditions.

A relator (whistleblower) brought the qui tam complaint against UCB over marketing and advertising practices. The Department of Justice and many AG's from around the country joined in the UCB qui tam complaint regarding the Keppra. The success in the qui tam case is a true testament of how things can work well, when the various federal and state agencies synchronize their efforts. As part of the UCB resolution, the whistleblowers will receive payments totaling more than $2.8 million from the federal share of the civil recovery.

In 2010, UCB made $3.2 Billion in Revenue, therefore, it is easy to see why after preliminary court proceedings, they agreed to settle the False Claims Act violations for a reported $34.4 million dollars. The head of the North American Operations for UCB, Greg Duncan, stated the following:

We are pleased to have resolved this matter and look forward to continuing to work with the many organizations with whom we partner to advance our mission of transforming the lives of people living with severe diseases."

This qui tam settlement includes reimbursements, payments to Medicare, Medicaid, and other government agencies and programs. A large portion of the False Claims Act settlement will be used to compensate plaintiffs in civil cases against UCB.

Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. stated the following:

“Patients have a right to know that the drugs they are prescribed have been approved by the FDA as safe and effective for a particular use. Off-label promotion of pharmaceuticals undermines the FDA’s important role in protecting the public and is a drain on taxpayer dollars.”

In the False Claims Act settlement, UCB also agreed to participate in a corporate integrity agreement, with a five year time line during which the company will cooperate closely with federal investigators to ensure no further lapses in false advertising.

The settlement is another step toward monitoring the booming pharmaceutical industry. Consumers should take note of the settlement as a reminder to be aware of all prescriptions.

If a whistleblower has knowledge of a company's fraudulent activities regarding the defrauding the government, they should report the fraud immediately. Seeking the assistance of a qualified and experienced qui tam attorney is essential in protecting the rights of the relator. This serves to help protect the relator's reward which can be anywhere from 15% to 30%, depending upon whether the government intervenes in the qui tam complaint.

Click on the following link for more information on:

UCB to pay $34.4 mlm over illegal drug promotion - Reuters

UCB Pays $34M To Resolve Off-Label Charges - Pharmalot

U.S. Subsidiary of Belgian Pharmaceutical Manufacturer Pleads Guilty to Off-Label Promotion; Company to Pay More Than $34 Million - DOJ

Smyrna drug maker settles fraud claims - AJC

Supreme Court Rules in favor of Drug Makers in False Claims Act Case

LaBovick Law — Wed, 25 May 2011 07:47:29 -0500

Healthcare facilities can’t bring False Claims Act lawsuits to enforce ceiling-price contracts between drug manufacturers and the Secretary of Health and Human Services, according to the United States Supreme Court in Astra USA v. Santa Clara County, No. 09-1273.

This was a huge win to the pharmaceutical industry and a major blow to health care facilities, since the ruling overturned an earlier lower court decision in favor of the healthcare facilities.

The clinics involved in the Astra USA v. Santa Clara County case were from California. According to their case, brought under the California False Claims Act. In a legal maneuvering, the pharmaceutical manufacturers had the case moved to federal court.

The heart of the legal issue is whether drug makers, were at fault in over charging Medicare and Medicaid more than the pre-determined caps for drugs that serve 340B entities medical facilities serving the poor.

The eight pharmaceutical manufacturers in the case included subsidiaries of Astra Zeneca, Sanofi-Aventis SA, Bayer AG, Takeda Pharmaceutical, Bristol Myers Squibb, Merck, Pfizer and GlaxoSmithKine.

Justice Ruth Bader Ginsburg, stated in her opinion that drug-pricing enforcement was solely the responsibility of the U.S. Department of Health and Human Services. "Recognizing the county's right to proceed in court could spawn a multitude of dispersed and uncoordinated lawsuits," Ginsburg said in a 10-page opinion. She said the risk of conflicting court rulings "would be substantial.

There are over 14,000 health facilities that participate in the drug-discount program, purchasing an estimated $6 billion in drugs under the program in 2009.

As a Florida qui tam law firm, that represents whistleblowers in qui tam and false claims act cases, we ask the question: Is it so bad, for pharmaceutical manufacturers to be held accountable for their actions when there are billions at stake?

When the government is overcharged or defrauded, it impacts the economy and all taxpayers. The purpose of the Federal False Claims Act and many State False Claims Acts is for accountability.

Click on the following links to read more:

Court Rules California County Can't Sue Drug Makers - WSJ

Supreme Court Prohibits Public Hospitals From Suing for Drug Overcharges - Becker's Hospital Review

U.S. Backs Drug Firms in Lawsuit Over Prices - NY Times

False Claims Act case settled for $44.3M by Pharma Giant Serono

LaBovick Law — Thu, 05 May 2011 16:57:48 -0500

Pharmaceutical giants: Serono Laboratories Inc., EMD Serono Inc., Merck Serono S.A, and Ares Trading S.A. have agreed to settle False Claims Act allegations in connection with the marketing of the drug Rebif for $44.3 million, according to a recent announcement by the Department of Justice.

Under the Serno agreement, proceeds from the settlement will be split between the federal government and various states, with the United States receiving $34.6 million to resolve the federal claims and the states receiving $9.7 million to settle their respective claims under Medicaid.

As a Florida False Claims Act and Whistleblower Law Firm, we applaud the whistleblower, Tim Amato, who brought the qui tam suit in 2005. The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Mr Amato will receive $5.19 million out of the federal share of the Serno civil settlement.

Allegedly, health care providers were paid from the launch of Rebif in January 2002 through December 2009, to promote or prescribe Rebif, a recombinant interferon that is used to treat relapsing forms of multiple sclerosis. The payments were made to providers for hundreds of speaker training meetings and programs, as well as payments for attending consultant, marketing and advisory board meetings, all at upscale resorts and other locations. Serono’s actions allegedly resulted in the submission of false claims to federal health care programs including Medicare and Medicaid for the payment of Rebif, i.e., claims that were tainted by kickbacks.

It is a great day in America when the government can combat corporate greed and health care fraud. The False Claims Act is a powerful tool in that effort and allows the government to recover triple the amount of its actual damages, plus a civil penalty of $5,500 to $11,000 for each false claim.

We encourage whistleblowers to come forward and report fraud against the government. If you are aware of corporate fraud against the federal or state government, contact a whistleblower or qui tam lawyer to discuss your legal rights and steps to take on reporting the fraud.

Click on the following links to read more on the $44.3M Serno FCA Settlement:

Pharmaceutical Giant, Serono, Agrees to Pay $44.3 Million to Settle False Claims Act Case - DOJ

Serono to Pay $44.3 Million to Resolve False Claims Act Allegations in Connection With Promotion of Drug Rebif - PharmaLive

Plaintiff in qui tam suit charged with $300,000 Fee Award in AZ

LaBovick Law — Fri, 25 Mar 2011 21:58:11 -0500

LaBovick Law Group Announces New Firm Name

LaBovick Law — Thu, 17 Mar 2011 02:23:22 -0500

"New Name to Reflect the full scope of the Legal Team and Strength of Brand"

We are pleased to announce that the firm formerly known as LaBovick & LaBovick, P.A. has changed its name to LaBovick Law Group. This will enable the LaBovick Law Group to present a clear and strong brand in the Florida legal community.

The name change will reflect the firm's dynamic history as one of the preeminent law firms in the legal community. Founded by Brian F. LaBovick, Esq. and joined by his wife, Esther Uria LaBovick, Esq. the firm has moved beyond a small firm practice and into a full service firm serving clients throughout the nation. As part of this brand shift, the LaBovick Law Group will adopt a new tag line, “Your Full Service Law Firm” to reflect the firm’s ability to serve all the legal needs of clients.

The LaBovick Law Group will be committed to continuing to provide the expert legal services that clients have come to rely on in such core practices as Personal Injury, Qui tam, Employment Law, and Complex Litigation. The LaBovick Law Group is one of Florida’s leading civil trial law firms assisting individuals and businesses throughout Florida. In addition to its headquarters in Palm Beach Gardens, the firm has offices in West Palm Beach, Boynton Beach and Boca Raton.

Managing Shareholder, Brian F. LaBovick, Esq., stated "Over the past few years, several prominent attorneys have joined the firm, adding legal expertise in practice areas such as Maritime, Estate Planning, Asset Protection, Complex Litigation, Foreclosure Defense, Mortgage Modification Bankruptcy and PIP Insurance Litigation. We have selected a new name reflective of the full scope of legal services being offered and incorporated the strength of the LaBovick brand in the community."

A featured element in the new marketing campaign is the 'Your Full Service Law Firm' tagline, which replaces the tagline ‘Real Attorneys, Helping Real People, With Real Problems.'

"While Real Attorneys, Helping Real People, With Real Problems was memorable, we want to articulate that we are here to handle all of our clients' legal needs," said Larry Stern, J.D., Chief of Staff, LaBovick Law Group. “The new firm name and tagline line places an emphasis on The LaBovick Law Group’s ability to help clients obtain justice in all of their legal matters” Stern added.
About LaBovick Law Group

Established in 1992, the LaBovick Law Group is a Florida law firm with offices in Palm Beach Gardens, West Palm Beach, Boynton Beach and Boca Raton. The firm is a recognized leader in fighting for the rights of clients. LaBovick Law Group represents individuals and businesses in Florida State and Federal Courts. The LaBovick Law Group practices civil litigation, with a concentration in personal injury, maritime, estate planning, bankruptcy, mortgage foreclosure defense, mortgage modification, social security disability, business, insurance and employment litigation.