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Whistleblower News Update- April 2, 2013

The U.S. Department of Justice announced this week that Alabama-based Caddell Construction agreed to pay to the United States $1,150,000 to settle allegations that it violated the False Claims Act by falsely reporting to the Army Corps of Engineers that it hired and mentored Mountain Chief Management Services, a Native American-owned company, to work on construction projects at Fort Bragg, North Carolina and Fort Campbell, Kentucky from April 2003 to March 2005. Rather, Mountain Chief was merely a pass-through entity used by Caddell to claim payments under the Department of Defense’s Mentor-Protégé and Indian Incentive Programs and didn’t actually perform the work for which Caddell received payment, according to the government.

A recently released e-book by a former employee of the Scooter Store alleges that the company used a coding system to tag doctors across the country based on their willingness or reluctance to prescribe patients power wheelchairs. According to the former employees, the coding system allowed company representatives to steer potential customers to those doctors who were more likely to prescribe power wheelchairs if the patients’ own doctors would not write the prescription. The Scooter Store, allegedly, stopped using the coding system after a raid on its company headquarters. If the allegations in the e-book are reliable, the Scooter Store could soon find itself the subject of an investigation for possible Medicare and Medicaid fraud.

Recently unsealed documents in connection with a lawsuit against Cephalon, currently owned by Teva Pharmaceuticals, reveal that in August 2010, a former Cephalon manager filed a whisteblower lawsuit against the company, claiming that the company illegally marketed Treanda (a medication for treating chronic lymphocytic leukemia) and Fentora (a painkiller). Specifically, the lawsuit alleges that Cephalon engaged in several schemes which resulted in the overpayment for medications by federal healthcare programs. Although the U.S. Department of Justice declined to intervene in the lawsuit, a future settlement is possible. The company is also the subject of an investigation by the U.S. Attorney in New York, which was opened two years ago amidst allegations that the company engaged in off-label marketing of Treanda.

The California Board of Regents has agreed to pay the United States $1.2 million to settle a federal qui tam whistleblower lawsuit that was filed in 2008 by a former University of California-Irvine (UCI) professor and anesthesiologist. According to this article, the False Claims Act lawsuit alleged that anesthesia was routinely administered at UCI by Certified Registered Nurse Anesthetists (CRNAs) or medical residents without a supervisory anesthesiologist present or immediately available, which violates federal regulations. The complaint also alleged that post-operative evaluations were routinely performed by unsupervised and/or unlicensed medical residents, in violation of federal regulations. In the complaint, Dr. Dennis O’Connor alleged that UIC “pre-filled” records to give the impression that a doctor had been present when a patient received anesthesia administered by a CRNA or medical resident.

CDW-Government LLC (CDW-G), a wholly-owned subsidiary of Illinois-based CDW Corporation, will pay $5.66 million to resolve allegations that it submitted false claims in connection with a U.S. General Services Administration (GSA) contract, thereby improperly charging government purchasers for shipping during the period 1999 to 2011. The lawsuit, which was filed by a former employee of the company, also alleged that CDW-G sold products to the United States that were manufactured in China and other countries prohibited by the Trade Agreements Act and underreported sales in order to avoid paying certain fees required under the GSA. The relator will receive $1,336,098 in retaliation damages and may also be entitled to an additional amount, plus attorneys’ fees and costs.

Please contact us at (312) 863-7222 if you would like to learn more about any of the aforementioned whistleblower news updates or would like to schedule a free, confidential appointment with one of our nationally-recognized whistleblower attorneys.

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