Archive for February, 2014

James Hoyer Whistleblower Case Leads to $193 Million Settlement with Endo Pharmaceuticals

Endo Health Solutions and its subsidiary Endo Pharmaceuticals, Inc. will pay $192.7 million to settle civil and criminal charges stemming from a whistleblower case that the company illegally marketed a pain treatment patch called Lidoderm.  The settlement comes after an Endo insider blew the whistle on the company’s efforts to market Lidoderm off-label, for uses far beyond its approved indication. Read More…


MPRI Inc. Agrees to Pay $3.2 Million for False Labor Charges on Contract to Support Army in Afghanistan

MPRI Inc. has agreed to pay $3.2 million to resolve allegations that it submitted false labor charges on a contract to support the Army in Afghanistan, the Justice Department announced today. MPRI is a Chantilly, Virginia-based company.

“We will not tolerate contractors that bill for work that is not performed,” said Assistant Attorney General for the Department of Justice’s Civil Division Stuart F. Delery. “The Department of Justice will pursue those who do not comply with the terms of their bargain with the government and restore to the taxpayers the full measure of funds falsely claimed.”

The government alleged that MPRI billed for employees who had not worked because they had been granted leave and were out of the country. The alleged false billing occurred between March 2005 and October 2010.

 Under its contract with the Army, MPRI was required to provide support to the Army in its efforts to re-design and build from scratch a new Afghan Defense Sector that would establish an Afghan national security system suitable for a modern Western military. Among other things, MPRI was required to provide support for program and financial management, development and implementation of core systems for the Afghan Ministry of Defense and General Staff, intermediate Commands, and sustaining institutions, training in logistics, acquisitions, installation management and intelligence.

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What is Off-Label Marketing?

In 2013, False Claims Act recoveries reached record levels, drawing in more than $3.8 billion in settlements and judgments.  A staggering amount of that recovery – more than $2 billion – came from a little known aspect of healthcare fraud called “off-label marketing.”  The massive settlements related to off-label marketing make one thing clear: familiarity with the concepts of this scheme can enable pharmaceutical company insiders to bring successful False Claims Act cases and return significant funds to the government.

What Does Off-Label Marketing Really Mean?

All pharmaceutical drugs sold in the United States must be approved by the United States Food and Drug Administration prior to being marketed for public consumption.  In seeking approval, a pharmaceutical company must identify a selected “indication,” which is the ailment that the drug is intended to treat, relieve, or cure.  When the FDA approves a drug, the approval is limited to that identified indication.  When a patient is prescribed the drug for its approved use, the prescription is referred to as “on-label.”  However, when a patient is prescribed the drug for any other purpose, it is referred to as “off-label.”

It is important to remember that prescribing or using a pharmaceutical drug off-label is not illegal.  A physician has the ultimate discretion to prescribe a drug that he or she determines to be medically appropriate.  Studies have found that up to 20% of drugs are prescribed off-label, and the percentage increases significantly for certain types of medication.[1]  Certain ailments are also more likely to be treated with an off-label prescription.  For example, even in the early 1990’s, more than half of cancer patients received at least one off-label drug as part of their treatment regimen.[2]

However, even though off-label usage is not illegal or uncommon, it simply cannot be guaranteed to be safe or effective.  Off-label use of a drug essentially amounts to experimentation – usage without the benefit of proven outcomes or known side-effects.  For some physicians and patients, the potential reward is worth the risk, particularly if other drugs have not been able to help a patient.  So while the FDA does not interfere with a physician and patient’s discretion to choose a course of medical treatment, it does retain the discretion to regulate the promotion of a drug for off-label uses.

Pharmaceutical marketing is typically guided by the Food, Drug, and Cosmetic Act (“FDCA”).  Under the FDCA, drug companies are prohibited from marketing or promoting drugs for anything other than the approved uses.  Specifically, a drug is considered “misbranded” if its labeling includes information about an indication that has not been approved by the FDA.   Labeling does not mean just the information on the product’s packaging – it also covers any promotional material associated with the product.  The FDCA provides criminal liability for companies that violate the promotional rules.

The Center for Medicare and Medicaid Services (“CMS”) also regulates off-label use of prescription medications by prohibiting payment for drugs for a non-approved indication.  Both Medicare and Medicaid cover prescription drugs to varying extents, but both include limitations that require the medication be used for a medically-necessary indication.  The statutory language varies a bit between the two programs, but essentially, both programs require that the medication be used for an on-label purpose or be listed in certain approved compendia to qualify for reimbursement.

The governing regulations related to both the FDCA and CMS are very complex.  Any suspicions about a company’s marketing conduct, or whether government payments are proper, should be discussed with an experienced False Claims Act attorney.

Does the Government Really Care about Off-Label Marketing?

In short – absolutely.

In the past ten years, the United States government has shown an unparalleled interest in prosecuting and recovering funds for off-label promotion and marketing of pharmaceutical drugs.  Off-label marketing cases make up some of the largest healthcare fraud settlements in the history of the United States, including:

Of course, these cases are notable because of their very high settlement values.  Not every off-label case is expected to bring in billion-dollar settlements, and you should not be deterred from bringing a case just because it may have a smaller damage calculation.

If you believe you have information regarding the off-label promotion and marketing of a pharmaceutical drug and are considering bringing a False Claims Act case, please contact James Hoyer for an evaluation of your claims.  Click here for more information about the firm and to submit your information electronically, or you may contact our office at 813-397-2300.

[1] David Radley, Stan Finkelstein, Randall Stafford, “Off-label Prescribing Among Office-Based Physicians,” Archives of Internal Medicine, 2006.


[2] “Off-Label Drugs: Reimbursement Policies Constrain Physicians in Their Choice of Cancer Therapies,” General Accounting Office, Report to the Chairman, Committee on Labor and Human Resources, U.S. Senate, September 1991.


Sanborn Map Co. Pays $2.1 Million to Resolve Allegations of False Claims for Map Work Related to U.S. Military Convoy Routes in Iraq and Marine Corps Bases in United States

Sanborn Map Company Inc. has agreed to pay $2.1 million to the U.S. government to resolve allegations that it submitted false claims in connection with U. S. Army Corps of Engineers contracts, the Justice Department announced today. Sanborn, headquartered in Colorado Springs, Colo., provides photogrammetric mapping and geographic information system services.

“We are committed to defending the integrity of our public contracting process,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Department of Justice will not hesitate to pursue companies that knowingly fail to comply with their contractual obligations, particularly obligations involving the protection of our national security interests.”

From 2005 to 2011, Sanborn contracted with the U.S. Army Corp of Engineers to produce maps for U.S. convoy routes in Iraq, Marine Corps bases in the U. S. and other military and civilian projects. Allegedly, in an effort to save money, Sanborn used unapproved foreign subcontractors on three projects, which violated contractual obligations and caused delays on these projects. Sanborn also allegedly used unapproved domestic subcontractors when Sanborn was required to complete all map work in-house and charged unrelated work to the government contracts.

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CBS News Reports on James Hoyer Whistleblower Case

CBS News examined a recently unsealed whistleblower case in which members of the military were targeted for their Tuition Assistance dollars.  The lawsuit outlines a scheme to get service members to sign up for online certificate courses which were not eligible for the government money.  Click on the video above to watch the CBS report by correspondent Sharyl Attkisson.

The James Hoyer Law Firm represents whistleblower Adam Boyce who came forward to the government after concerns that Army National Guard members were being subjected to a bait and switch for online certificate courses. Boyce was a marketing director for a middleman company called Ed4Mil.  Ed4Mil recruited soldiers to take online classes at a private school in New Jersey, just outside of  New York City, called Caldwell College.

After working at Ed4Mil for several months, Boyce discovered  the online courses were actually provided by another school called Penn Foster, which did not  qualify to receive Army Tuition Assistance for the certificate courses being offered, like Gun-Smithing, Jewelry Design and Medical Billing and Coding.

Making matters worse, the courses being sold to National Guard members as Caldwell College classes were marked up to cost 6-times more than civilians were charged for the Penn Foster courses. A typical course at Penn Foster cost about $700, but when sold as a Caldwell Course, was marked up to about $4500, which is the maximum amount of Tuition Assistance a service member can receive in one year.

Boyce was outraged to discover that members of the military were being deceived and that taxpayers were paying for it.  His whistleblower case seeks to recover millions of dollars for the U.S. Government which were paid to Caldwell College and Ed4Mil, to which the lawsuit alleges they were not entitled.  The case is pending in U.S. District Court in the Middle District of Pennsylvania.

If you have any information you believe could be helpful, please click here to contact the James Hoyer Law Firm.



JP Morgan Chase to Pay $614 Million for False Claims Act Violations

The Department of Justice today announced that JPMorgan Chase (JPMC) will pay $614 million for violating the False Claims Act by knowingly originating and underwriting non-compliant mortgage loans submitted for insurance coverage and guarantees by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA). JPMC is a bank and financial services company headquartered in New York.

“The resolution announced today is a product of the Justice Department’s continuing efforts to hold accountable those whose conduct contributed to the financial crisis,” said Associate Attorney General Tony West. “This settlement recovers wrongfully claimed funds for vital government programs that give millions of Americans the opportunity to own a home and sends a clear message that we will take appropriately aggressive action against financial institutions that knowingly engage in improper mortgage lending practices.”

“The Department of Justice will continue to hold accountable financial institutions whose irresponsible mortgage lending undermines the housing market and costs the taxpayers many millions of dollars,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “I thank U.S. Attorney Bharara and his team for their stellar efforts in this case and look forward to our coordinated efforts in these cases.”

As part of the settlement, which was handled by the U.S. Attorney’s Office for the Southern District of New York, JPMC admitted that, for more than a decade, it approved thousands of FHA loans and hundreds of VA loans that were not eligible for FHA or VA insurance because they did not meet applicable agency underwriting requirements. JPMC further admitted that it failed to inform the FHA and the VA when its own internal reviews discovered more than 500 defective loans that never should have been submitted for FHA and VA insurance.

“For years, JPMorgan Chase has enjoyed the privilege of participating in federally subsidized programs aimed at helping millions of Americans realize the dream of homeownership,” said U.S. Attorney for the Southern District of New York Preet Bharara. “Yet, for more than a decade, it abused that privilege. JPMorgan Chase put profits ahead of responsibility by recklessly churning out thousands of defective mortgage loans, failing to inform the government of known problems with those loans and leaving the government to cover the losses when the loans defaulted. With today’s settlement, however, JPMorgan Chase has accepted responsibility for its misconduct and has committed to reform its business practices. This settlement adds to the list of successful mortgage fraud cases this office has pursued.”

Beginning as early as 2002, JPMC falsely certified that loans it originated and underwrote were qualified for FHA and VA insurance and guarantees. As a consequence of JPMC’s misrepresentations, both the FHA and the VA incurred substantial losses when unqualified loans failed and caused the FHA and VA to cover the associated losses.

“This settlement with JP Morgan Chase will enable HUD to recover funds lost due to Chase’s past unacceptable mortgage underwriting practices,” said HUD’s Acting General Counsel Damon Smith. “In addition, Chase must now institute new and tighter controls to prevent abuses of FHA’s automated underwriting system. HUD will continue working with the Department of Justice to ensure that lenders are held accountable and are required to institute practices that will benefit both borrowers and the FHA insurance fund.”


“The agreement reached with JPMC was possible due to the dedication of the U.S. Attorney’s Office for the Southern District of New York and the hard work of the talented staff at the Office of Inspector General,” said Inspector General of the Department of Housing and Urban Development David A. Montoya. “It also demonstrates the combined commitment of the Justice Department and the Office of Inspector General to continuing efforts to enforce FHA mortgage insurance requirements.”


The FHA’s Single Family Mortgage Insurance Program enables low- and moderate- income borrowers to purchase homes by insuring qualified loans made by participating lenders, such as JPMC, against losses if the loans later default. A participating lender may only submit to the FHA creditworthy loans meeting certain requirements and must maintain a quality control program that can prevent and correct any deficiencies in the lender’s underwriting practices. The VA’s Loan Guaranty Program provides similar assistance to veterans, service members and qualifying surviving spouses.


“I commend the efforts of the United States Attorney’s Office for the Southern District of New York to hold lenders accountable for conduct that defrauds the government and deserving veterans who rely on VA’s Loan Guaranty Program to purchase their homes,” said Acting Inspector General for the Office of Inspector General, Department of Veterans Affairs Richard J. Griffin.


The settlement resolves allegations in a complaint filed by a private whistleblower.
Today’s settlement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s Offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit .


This settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Southern District of New York , the department’s Civil Division, the Department of Housing and Urban Development’s Inspector General and the Department of Veterans Affairs’ Inspector General.