Whistleblower Insider

Whistleblower Insider is written by the Constantine Cannon law firm team of experienced qui tam and whistleblower lawyers. It is updated daily to provide the latest whistleblower and fraud news and developments.
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September 12, 2014

DOJ Catch of the Week — Reliance Medical Systems

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “catch of the week” goes to spinal implant company Reliance Medical Systems. On Monday, the government announced its filing of two False Claims Act lawsuits against the company, two of its distributorships — Apex Medical Technologies and Kronos Spinal Technologies — and Michigan neurosurgeon Dr. Aria Sabit.  The complaints allege Apex and Kronos paid physicians, including Sabit, to induce them to use Reliance spinal implants in the surgeries they performed. See DOJ Press Release

According to the government, Reliance Medical used the Apex distributorship to funnel almost half a million dollars in improper payments to Sabit for using Reliance spinal implants in his surgeries.  The government claims that Sabit, who also has an ownership interest in Apex, used Reliance implants in approximately 90 percent of his spinal fusion surgeries.  The payments Sabit received for these implants also allegedly caused him to perform medically unnecessary or excessive surgeries on certain patients who did not need the spinal implants.

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September 12, 2014

Whistleblower News from the Inside

By the C|C Whistleblower Lawyer Team

Bipartisan support for strengthening whistleblower protections — “To say it was heartwarming would be a stretch, but it was good to see the bipartisan support this week on behalf of federal whistleblowers from a congressional panel” with many seeming “pretty disgusted with the way Uncle Sam can treat federal employees who report waste, fraud and abuse.”  Washington Post

Highlights from House hearing on whistleblower treatment —  Representatives at Tuesday’s House subcommittee hearing on whistleblower retaliation in the federal government expressed support for additional legislation to address unresolved issues from the Whistleblower Protection Enhancement Act (WPEA).  GAP

Patent Office whistleblowers’ formal complaints revealed – The Washington Post has published the internal complaints of government workers alleging widespread fraud at the agency.  Washington Post

Summertime developments in Dodd-Frank — Forbes examines hot topics under Dodd-Frank including an award to a compliance employee whistleblower and recent cases that dodged the issue of whether whistleblowers are protected under Dodd-Frank if they only report internally and not to the SEC.  Forbes

Directors Could Be Personally Liable for Off-Label Drug Marketing Violations — A recent decision of the Ninth Circuit Court of Appeals indicates that corporate directors could face personal liability for off-label drug marketing penalties.  Huffington Post

Whistleblower says VA appeals board manipulated records — A VA whistleblower testified before Congress that agency managers handling disability benefit appeals have manipulated records to conceal delays in deciding cases.  Stars & Stripes

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If you would like more information or would like to speak to a member of Constantine Cannon’s whistleblower lawyer team, please click here.

September 11, 2014

D.C. Circuit Opines on What Constitutes Knowledge of Falsity Under the False Claims Act

By Jason Enzler

The Court of Appeals for the District of Columbia Circuit issued an opinion recently affirming a trial court’s grant of summary judgment against a qui tam relator.  The ruling in U.S. ex rel. Folliard v. Government Acquisitions, Inc. dealt with two issues: whether the lower court properly denied discovery of certain information and whether the defendant had “knowingly” submitted false claims for payment to the government.  While the first issue is common to many types of litigation, the second is unique to False Claims Act cases.

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September 11, 2014

DOJ Launches New Elder Justice Website

By Marlene Koury

Nearly one in 10 people over the age of 60 suffer abuse and neglect, including physical, sexual and emotional abuse, consumer scams, health care fraud and various forms of financial exploitation.  It is estimated that older adults in the United States lose more than $2.9 billion annually from financial exploitation alone.  To protect older Americans, the DOJ’s Elder Justice Initiative launched an elder abuse website as a resource for elder abuse prosecutors, researchers and practitioners – and, most importantly, for victims of such abuse.

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September 11, 2014

The Beginning of the End for Ag-Gag Laws?

By Gordon Schnell

In an eagerly awaited decision out of federal court in Idaho last week, Chief Judge B. Lynn Winmill has dealt a mighty blow to proponents of the so-called “Ag-Gag” laws several states have passed in recent years to ensure what goes on in factory farms, stays in factory farms.  At issue in this case is the constitutionality of the Idaho statute and whether — in criminalizing undercover investigations and videos at these facilities — it violates the Free Speech and Equal Protection Clauses and is preempted by federal whistleblower laws.  Judge Winmill did not rule on these ultimate issues.  He did, however, squarely deny the State’s motion to dismiss the lawsuit, raising serious questions as to the ultimate viability of these anti-whistleblower laws.

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September 9, 2014

Whistleblower News from the Inside

By the C|C Whistleblower Lawyer Team

DOJ sues for kickbacks and unnecessary spinal surgeries – The DOJ files two False Claims Act complaints against Reliance Medical Systems for a kickback scheme in which physicians were paid to use Reliance spinal implants in the surgeries they performed, some of which were medically unnecessary.  DOJ

DOJ investigating laboratories for possible kickback schemes – The Wall Street Journal reports on Health Diagnostic Laboratory, a Virginia lab that has made hundreds of millions of dollars from Medicare while paying doctors who refer patients’ blood test work to the lab.  WSJ

Standard & Poor’s likely looking at over $1 billion in fines — The chances of settling the government’s lawsuit over S&P’s role in mortgage-bond ratings for less than $1 billion may have slipped away after Countrywide was hit with a $1.3 billion fine, the first ruling to lay out what penalties financial institutions could face under the Financial Institutions Reform, Recovery and Enforcement Act.    Bloomberg

Owner of home healthcare company hit with 75 month sentence — Cruz Sonia Collado, the owner of Miami-based Nestor’s Health Services, received a prison sentence of over 6 years for her $6.5 million kickback scheme designed to increase Medicare patient referrals.  DOJ

House Oversight Committee Hearing on whistleblowers – Today’s hearing is on the administration’s treatment of whistleblowers since passage of the Whistleblower Protection Enhancement Act.  GAP

Annual losses suffered by elderly victims of financial fraud estimated to be $2.9 billion — Forbes reports on the “Top 4 Scams Against the Elderly” contributing to these losses.  Forbes

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If you would like more information or would like to speak to a member of Constantine Cannon’s whistleblower lawyer team, please click here.

September 5, 2014

DOJ Catch of the Week — Smith & Nephew

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “catch of the week” goes to Smith & Nephew. On Wednesday, the London-based medical device maker agreed to pay $11.3 million to settle charges it sold the U.S. government orthopaedic products it claimed were US-made but actually came from Malaysia. The settlement ends a whistleblower lawsuit brought in 2008 under the qui tam provisions of the False Claims Act by former Smith & Nephew information technology manager Samuel Cox. According to Cox’s attorneys, this is the first whistleblower settlement involving false country of origin claims for medical devices.

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September 5, 2014

Whistleblower Spotlight — MassMutual Whistleblower Bill Lloyd

By the C|C Whistleblower Lawyer Team

This week’s “Whistleblower Spotlight” shines on Bill Lloyd, a former agent with the insurance company MassMutual Financial Group based in Springfield, Massachusetts. Last month, Lloyd revealed himself as the unnamed whistleblower to whom the SEC awarded $400,000 for helping the agency uncover an allegedly fraudulent investment scheme at the company. It is only the thirteenth whistleblower award the SEC has made so far under the whistleblower provisions of the Dodd-Frank Act.

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