Archive for September, 2014

Who Will Replace Eric Holder as Attorney General of the United States?

Eric Holder

Attorney General Eric Holder

On Thursday, September 25, the United States Department of Justice announced that Eric Holder, the Attorney General of the United States of America, would be resigning as soon as a successor was confirmed.  Holder has been the Attorney General since 2009, when he took over the Department of Justice’s top position from Michael Mukasey.  Holder has been a proponent of the False Claims Act, overseeing the largest recoveries in FCA history and recently pushing for larger rewards to whistleblowers under FIRREA (a whistleblower act specifically addressing financial institutions and Wall Street).  Under Holder’s leadership, the Department of Justice has recovered more than $20 billion from False Claims Act cases, with more than $14 billion of that from healthcare cases.

The position of Attorney General is tremendously important to the False Claims Act industry because, as the nation’s top prosecutor, the Attorney General is ultimately responsible for all decisions of the Department of Justice.  It is imperative that Holder’s successor values the contributions of False Claims Act whistleblowers and continues to dedicate Department of Justice resources to prosecuting these cases.  False Claims Act cases are undeniably stronger when the government intervenes and pushes the litigation forward, so the strength of future cases will depend largely on the priorities of the next Attorney General.

Many names have been thrown around as successor options, including apparent front-runners Manhattan U.S. Attorney Preet Bharara, Solicitor General Don Verrilli, former White House counsel Kathryn Ruemmler, and Massachusetts Governor Deval Patrick.  The ultimate choice, however, is up to President Barack Obama and he has not yet named his top choice.  Once President Obama nominates an individual as Holder’s successor, he or she will face a rigorous confirmation hearing by Congress.  With midterm elections looming in November and a possible change in the Senate and House majorities, it is likely – though not certain – that President Obama will make the nomination before November.

As the field of potential candidates narrows, we will follow the story and post our findings on each potential nominee’s False Claims Act background.  We are very hopeful that the next Attorney General will see as much success and forward-movement in the False Claims Act as Holder has during his tenure.


James Hoyer Client Wins Whistleblower of the Year Award


At TAF Awards ceremony (Pictured L-R): James Hoyer Partner Elaine Stromgren, Elin Baklid-Kunz, Attorney Marlan Wilbanks

James Hoyer Managing Partner Chris Casper was proud to be local counsel, along with lead-counsel Marlan Wilbanks, for Elin Baklid-Kunz, whistleblower in the $86-million dollar Halifax Hospital settlement.  Elin was named the Taxpayers Against Fraud Education Fund Whistleblower of the Year, at an awards ceremony in Washington, D.C.

Upon receiving the award, Elin expressed her sincere gratitude and talked about the often difficult road whistleblowers face to do the right thing.  She said her family and attorneys provided her with incomparable support to help her through the process.

Elin first came to America from Norway as an au pair to learn English and pursue the American dream.  She started working at Halifax in 1994 while pursuing her Masters of Business Administration at Stetson University.  She became Halifax’s Compliance Officer in 2005 and was promoted to Director of Physician Services for Halifax Health Systems in 2008.

As Director of Physician Services, Elin became concerned that Halifax was making improper payments to doctors for referrals, in violation of the Stark Law.  The Stark Law is intended to prevent incentives to doctors which could entice them to make referral decisions based upon financial gain, instead of the patient’s best interest.  Elin also encountered an internal report that indicated Halifax neurosurgeons were performing medically unnecessary surgeries and admitting patients who did not meet admissions criteria.  This led to what she believes were millions of dollars in fraudulent charges to Medicaid and Medicare.   After reporting her concerns to Halifax and having them fall upon deaf ears, Elin felt she had no choice but to file a False Claims Act case on behalf of U.S. taxpayers.

Elin was presented the Whistleblower of the Year award by Cheryl Meads, whistleblower in the $96 million case against GlaxSmithKline which settled in 2010.  Meads commended Elin for her action and  not just standing by when American taxpayers were being defrauded and patients were being harmed.  She ended with a quote from Bobby Kennedy saying, “Few will have the greatness to bend history itself; but each of us can work to change a small portion of events, and in the total; of all those acts will be written the history of this generation.”

We applaud Elin for doing her part to stand on the right side of history.


Delery Addresses False Claims Act Attorneys on First Day as Acting Associate Attorney General


On Tuesday, September 16th, Stuart F. Delery officially stepped into the Number 3 position at the Department of Justice as he formally became the Associate Attorney General of the United States.  Since 2012, Delery has strongly advocated for the False Claims Act in his role as the Assistant Attorney General for the Civil Division.  Delery takes over for Tony West, who stepped down from the position after serving for two years.  Joyce Branda, a long-time False Claims Act advocate who has been a member of the Department of Justice’s Civil Division for more than thirty years, will fill Delery’s former position.

On his first day in office, Delery addressed attendees – including James Hoyer partners Elaine Stromgren, Jesse Hoyer and Jillian Estes – at the Fourteenth Annual Taxpayers Against Fraud Conference in Washington, D.C.  As he has done before, Delery celebrated the tremendous contributions of whistleblowers and their attorneys in pursuing rigorous and taxing False Claims Act cases for the sake of returning money to the American taxpayers.

Delery specifically recognized the tremendous personal and professional challenges that whistleblowers can face, while lauding those who choose to take the courageous step to come forward.  Delery also stated that it is most helpful to the government when whistleblowers come forward with factually strong cases, are very cautious about the use of privileged documents, and abide by the seal requirements for the duration of the case.

James Hoyer partner Jesse Hoyer attended Delery’s speech.  “It’s really encouraging that Mr. Delery would spend his first day in this new role speaking to False Claims Act attorneys,” Hoyer said.  “It’s a clear signal from Delery that he plans to be actively involved with whistleblower cases in this role, so it’s great to have an ally in such a senior office.”

James Hoyer congratulates Associate Attorney General Delery on the promotion to his new position.  We look forward to many years of continuing the invaluable public-private partnership of the False Claims Act.


Remarks by Assistant Attorney General Leslie R. Caldwell at the Taxpayers Against Fraud Education Fund Conference

Thank you, for that kind introduction.  And thanks to everyone at Taxpayers Against Fraud for inviting me to speak to you today.

It has been my privilege, over the past several months, to serve as Assistant Attorney General for the Criminal Division of the Department of Justice.

The Criminal Division handles a wide range of cases: from sophisticated financial fraud to global narcotics trafficking, from cybercrime to corruption, and many other matters in between.

We have more than 600 smart, hard-working prosecutors who operate at the cutting edge of criminal law enforcement.  When a new fraud scheme evolves from an old scheme, we often are the first to see it, and we often are the first to investigate and prosecute it.  When criminals adapt their techniques, we see it, and we too adapt.

Together with our partners in the 94 U.S. Attorney’s Offices around the country, as well as our law enforcement partners in the United States and across the globe, we in the Criminal Division are committed to investigating and prosecuting the most challenging types of criminal cases as they arise.

In bringing those cases, we use all of the many tools available to us.  Today, I want to announce that we will be stepping up our use of one tool, and that is the fine work done by all of you in investigating and filing cases under the False Claims Act.

Read rest of story here


Farid Fata,a Detroit-Area Doctor, Admits to Providing Medically Unnecessary Chemotherapy to Patients

A Detroit-area hematologist-oncologist pleaded guilty today for his role in a health care fraud scheme, admitting that he administered unnecessary chemotherapy to fraudulently bill the Medicare program and private insurance companies.   According to court records, the scheme enabled the doctor to submit approximately $225 million in claims to Medicare over six years.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.

Farid Fata, M.D., 49, of Oakland Township, Michigan, pleaded guilty today before U.S. District Judge Paul D. Borman of the Eastern District of Michigan to 13 counts of health care fraud, one count of conspiracy to pay or receive kickbacks and two counts of money laundering.   At his sentencing, scheduled for Feb. 23, 2014, Fata faces a statutory maximum of 175 years in prison.

Read the rest of the story here


James Hoyer Partners at Taxpayers Against Fraud Conference.

TAFPartners Elaine Stromgren, Jillian Estes, and Jesse Hoyer are at the 14th Annual Taxpayers Against Fraud (TAF) conference in D.C. this week.

TAF is a nonprofit, public interest organization dedicated to combating fraud against the government and protecting public resources through public-private partnerships.   TAF members work to maintain the integrity and advance the effectiveness of whistleblower reward and private enforcement provisions in federal and state laws.

If you or your attorneys are attending, please come meet us as we discuss these important topics.


Episcopal Ministries to the Aging Inc. to Pay $1.3 M for Allegedly Causing Submission of Claims for Unnecessary Rehabilitation Therapy at Skilled Nursing Facility

Episcopal Ministries to the Aging Inc. (EMA), a Maryland not-for-profit corporation that owns skilled nursing facilities, has agreed to pay $1.3 million to the government for submitting false claims to Medicare for unreasonable or unnecessary rehabilitation therapy purportedly provided by RehabCare Group East Inc., a subsidiary of Kindred Healthcare Inc.

“Patient need must dictate the provision of Medicare benefits rather than the fiscal interests of providers,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “ Today’s settlement demonstrates the department’s continued commitment to safeguarding both Medicare beneficiaries and taxpayer dollars by holding accountable all entities involved in billing for unnecessary services, including those that did not directly provide the unnecessary services.”

The settlement resolves allegations that EMA submitted false claims for rehabilitation therapy at William Hill Manor, a skilled nursing facility EMA owns in Easton, Maryland.  EMA hired RehabCare to provide rehabilitation therapy services to its patients at that facility starting in 2010.  The government alleges that EMA failed to prevent RehabCare from providing unreasonable or unnecessary therapy to patients in order to increase Medicare reimbursement to the facilities.  The government contended that among other things the reported therapy did not reflect the lower amounts of therapy generally provided to patients over the course of their stay.

Read rest of story here


Seventh Circuit Allows Relator To Overcome Public Disclosure Bar

DisclosureThe public disclosure bar can be a major factor in a qui tam action brought under a False Claims Act. The bar seeks to prevent lawsuits by “opportunistic plaintiffs who have no significant information to contribute of their own.” Graham County Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280, 294 (2010). To overcome the bar, the relator needs to be the original source of the information.

Unfortunately for some relators, some courts have applied the bar too stringently, finding that a case can’t proceed when it is based on publicly available information. However, a recent case out of the Seventh Circuit Court of Appeals took a more lenient route which should benefit future relators. U.S. ex rel. Heath v. Wisconsin Bell, Inc., 12-3383, 2014 WL 3704023 (7th Cir. 2014).

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