Thursday, December 23, 2010

Fraudulent Medicare Billing for Test Results in $92,000 Settlement

Dr. Ray Silao from Yuma, Arizona will pay $92,000 to settle charges by the federal government that he violated the False Claims Act by falesly billing Medicare for certain tests for patients who did not qualify for Medicare coverage of the tests. He is the third Arizona doctor to settle a claim in 2010 related to fraudulent provision of the thoracic electrical bioimpedance (TEB) test. Earlier settlements with two Arizona physicians resulted in an additional $825,000 paid back to the government. To read the full story by reporter James Gilbert, click here.

If you know of the wrongful billing of Medicaid, Medicare, or Tricare for TEB or any other tests or lab work, you can go to to make a report.

Tuesday, December 21, 2010


奥巴马政府由于过去两年来由于实施四十亿美金改进马萨诸塞洲欺诈行动计划而受到好评.但是这些改进不仅仅打击减少马萨诸塞洲欺诈犯罪活动. 举例来说, 其中有二十三亿美金用于辉瑞制药公司的整改.而且奥巴马政府也因改进了多数过去在布什政府之下的调查员所做的工作而赢得声誉.然而进步是必须要的, 历届政府都应从政治的领域致力于: 避免由于医疗补助和医疗保险的欺诈犯罪而产生的每年约54亿美金的资源浪费和滥用. 奥巴马医改投入的350万美金将会为打击欺诈犯罪提供有利的工具和资源,也就是说政府将会投入大量新型和昂贵的计算机软硬件设备去提高和改善该领域的工作条件和水平.

ObamaCare adds $350 million to funds for healthcare fraud investigations

US Attorney General Eric Holder has noted that the government has recovered $4 billion in fraud in Massachusetts over the past two years. The recoveries are based on fraud that was perpetrated nationwide – for example, the government settled with Pfizer over numerous off-label and kickback allegations last year for $2.3 billion dollars.

Progress is certainly being made, and all efforts will be needed to combat what is currently estimated to be a $54 billion dollar problem – waste and abuse caused by fraudsters to the Medicaid and Medicare programs annually. ObamaCare will add $350 million to get new fraud fighting tools and resources - a welcome help in a large battle.

Read the excellent Associated Press article by Glen Johnson here

Click here to learn how to help Stop Government Fraud

Another large Qui Tam case settles - Dey Pharma agrees to pay $280 million

Dey pharmaceuticals company is paying the US government $280 million over charges that it reported false and inflated prices for drugs including Albuterol inhalers and other drugs including Cromolyn Sodium, and Ipratropium Bromide. This case involved marketing the "spread", or the difference between what Medicaid and Medicare will pay and a discounted price for health care providers. Dey was charged with offering the lower price to customers, but falsely reporting a higher sales price to the government.

Tony West, Assistant Attorney General for the Civil Division of the Department of Justice said “ Taxpayer-funded kickback schemes like this not only cost federal health care programs millions of dollars, they threaten to undermine the integrity of the choices health care providers make for their patients.”
For more information on this type of fraud, go to the Stop Government Fraud website.

12-20-10 DOJ Press Release - Dey 280 Million Settlement

Monday, July 5, 2010

US Export-Import Bank rocked again by fraud

The US Export-Import Bank (Ex-Im Bank) is rocked once again by fraud and scandal in El Paso, Texas. See the recently unsealed federal indictment below.

The mission of the Ex-Im Bank sounds great: to assist in the export of US goods and services to foreign countries. It does so by guarantying loans made by US banks to companies for the purchases of US goods that are exported, in this case to Mexico. If the borrower defaults on loan repayments, the Ex-Im Bank, as guarantor, pays off the remaining loan balance to the private bank. But guess who ends up paying the bill when the loan is fraudulent: US taxpayers.

This case is just one in a series of cases coming out of San Antonio and El Paso involving the Ex-Im Bank. One of the recent indictments involves allegations by the Department of Justice against the grandson of the former Mexican Secretary of Defense. In this county, of course, all are presumed innocent until proven guilty. Here is how the San Antonio Express News reports the case:

Mexican Businessman Indicted in Fraud Plot

US v. Gomez (Indictment)

Houston lawyer indicted for ripping off veterans

A Houston attorney and his wife have been indicted for conspiring to misappropriate more than $2 million from the accounts of military veterans, making false statements and tax fraud.

According to the indictment, Attorney Joe Phillips was either appointed by a probate court or otherwise designated to serve as the legal guardian and fiduciary for a number of incompetent veterans. In that role, he opened and maintained bank accounts to receive benefit payments from the VA and the SSA to pay the ordinary and customary living expenses of the incompetent veterans, including but not limited to rent, mortgage payments, utilities and travel. Phillips and his wife are accused of stealing money from the bank accounts of veteran clients entrusted to Phillips by and through his position as their fiduciary/guardian/representative payee by transferring funds into the Phillips’ personal joint bank accounts.

My take on the case: It’s rare to see an attorney indicted on fraud charges. One wonders, however, where the probate court judges were in this case. Texas law provides that only probate courts have the authority to declare a person incompetent. Do the Harris County probate courts have no supervision over attorneys like Phillips? Wonder who tipped off the VA.

Below is the press release from the US Attorney for Southern District of Texas.

USAO - 100629 - Phillips

Friday, July 2, 2010

El Paso Doc indicted for health care fraud-related crimes

The United States has charged El Paso doctor Anthony Valdez with carrying out an estimated $41 million fraudulent health care benefit program billing scheme. Valdez is the owner of the Institute of Pain Management with clinics in El Paso and San Antonio. There is no indication that there is a companion qui tam case. However, the feds are also seeking forfeiture of the good doctor's assets, toys (5 vehicles, a house in San Antonio and El Paso), and a cool $41 million.

My take on the case: Dr. Valdez got the attention several G-men, ranging from the FBI to the Defense Criminal Investigative Service (DCIS) to the IRS-CID (not people you want to mess with). Both the US Attorney’s Office and the Texas Attorney General are involved. No indication that there is a companion qui tam case, but these cases are typically started by an inside whistle blower. Because DCIS and TRICARE are involved, it looks like soldiers and their dependents stationed at Ft. Bliss may have been victimized.

Here is the DoJ press release:

Valdez Medfraud Ind

Army Officer pleads guilty to bribery charges in federal court

United States Army Captain Faustino L. Gonzales of Killeen, Texas, has pled guilty and admitted that in September 2006, he conspired with Chasib Mahdi d/b/a/ General Contracting Company, to receive cash bribes for awarding contracts under the Commander’s Emergency Relief Program for Iraq Reconstruction. Gonzales further admitted that the contracts he awarded to Mahdi, designated for projects near Forward Operating Base, Rustimaiyah, Iraq, were based on inflated prices. Gonzales also admitted that portions of the bribe money were deposited into banks accounts located in Killeen and San Antonio and that he used some of the bribe money to purchase a vehicle in Killeen.

Gonzales faces up to two years in federal prison and a maximum $250,000 fine after admitting to receiving approximately $25,000 in kickbacks in exchange for awarding reconstruction contracts in Iraq. Sentencing is scheduled for 1:00 P.M. on September 8, 2010.

My take on the case: As a former active-duty Army JAG officer who prosecuted a number of officers, I can’t believe Captain Gonzales faces only up to two years of prison. I’ve seen court-martial panels hammer soldiers with much longer sentences for lesser crimes. This Army Captain should have had the book thrown at him. He breached the trust and integrity that we expect of officers. Also, the dirty little secret is that he will remain an Active duty Army officer until the Army gets around to administratively separating him. It’s unknown whether he will continue to draw his salary and benefits.

The case number (Waco Division) is 6:10-cr-00136.

Here is the press release from the US Attorney’s Office:

Gonzales Iraq Plea

Thursday, July 1, 2010

The largest TARP fraud case to date - - this record sure to be topped

Lee Farkas, the former chairman of Taylor, Bean & Whitaker Mortgage Corp., was accused by DoJ of helping run a more than $1.9 billion fraud scheme that unsuccessfully attempted to steal money from the government’s Troubled Asset Relief Program.

The DoJ alleges that Taylor, Bean & Whitaker Mortgage Corp. lied about the health of loans it was servicing for the Federal Housing Administration. The DoJ also alleges that Farkas wrongly attempted to obtain more than $550 million from the government’s bank-bailout fund, making this the largest TARP fraud case to date. The DoJ further alleges that Farkas sought to deceive financial firms and TARP by covering up shortfalls at his closely held mortgage lending company in Florida.

Assistant Attorney General Lanny Breuer had this to say: “The fraud alleged here was truly stunning in its scale and complexity.”

Here is the DoJ press release:

DoJ Press Release (Farkas Indicted)

More promises from CMS that it will police its programs (here Medicare Part D)

Medicare Part D is a federal program to subsidize the costs of prescription drugs for Medicare beneficiaries in the United States. It was enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and went into effect on January 1, 2006.

Medicare Part D has been a boondoggle for big Pharma and the crooks that use government health care programs as their personal ATM machine. The total federal expenditures for the program for 2008 was $49.3 billion. The projected cost to the federal government from 2009 through 2018 is estimated to be $727.3 billion. (See 2009 Annual Rpt. of the Boards of Trustees of the Federal Hosp. Ins. & Fed. Supp. Med. Ins. Trust Funds, Table III.C19.—Operations of the Part D Account in the SMI Trust Fund (Cash Basis) during Calendar Years 2004-2018, Page 120 (Page 126 in pdf)).

But as with all other government health care programs, there is almost no oversight. Here is what the Government Accountability Office has to say about the failure of Centers for Medicare & Medicaid Services (CMS) to police Medicare Part D:

"While CMS oversight of Part D fraud and abuse programs has been limited, the agency plans to expand this oversight, including adding on-site audits (which include interviews and other face–to–face evaluations) in place of the desk audits (reviews of requested documents only) it has completed."

How many times have you heard that this line: "the agency plans to" blah blah blah. The Government simply has too few trained investigators, lawyers, and protocols to police its health care programs. Here is a copy of the full report:

GAO Report (Medicare Part D - CMS Oversight)

Here is the affidavit to the Texas Medicaid fraud case below


Somali immigrant charged in Texas state court with Medicaid fraud

The San Antonio Express News reports today that a Somali immigrant used Somali refugees to commit fraud against the Texas Medicaid program. See the article below.

Refugees Were Pawns in Fraud Case

Alaska Lawyer Files Qui Tam to Challenge State's Prescription of Off-label Drugs

Alaska civil rights attorney Jim Gottstein has filed a novel qui tam suit against Alaska state officials, claiming that their use of a wide variety of prescriptions on poor children amounted to off-label prescribing and fraud against the state Medicaid system, which footed the bill for the prescriptions. Gottstein's complaint has been declined by the federal government, but apparently he is pressing ahead. His qui tam faces a motion to dismiss from state defendants, who claim that the state is free to bill Medicaid for prescriptions for children, even if they are not FDA approved for use in children, and even if they have no indications in any of the three primary published drug compendia which are referred to by the False Claims Act. For more information about this important case, read the rest of Robert Whitaker's article in Psychology Today (below).

Medicating Children_ A “Whistleblower’s” Lawsuit Raises a Novel Legal Question

Monday, June 28, 2010

GAO Issues Report on the Government's Strategy to Prevent Improper Medicare Payments. Will it Work?

On June 15, 2010, the U.S. Government Accountability Office (GAO) released a report identifying five important areas for preventing Medicare fraud, waste and abuse. The strategies in this new report, “Medicare Fraud, Waste, and Abuse: Challenges and Strategies for Preventing Improper Payments,” are: (1) Strengthening the provider enrollment process and standards; (2) Improving the pre-payment review of claims through automated pre-payment claim review; (3) Focusing post-payment claims review on most vulnerable areas; (4) Improving oversight of prescription drug plan sponsors; and (5) Developing a robust process to address resolve vulnerabilities to fraud.

Click here for a link to the 15-page GAO report.

GAO Report (Medicare Fraud)

Does anyone think this will make a difference? Notice the action verbs (improving (2x), strengthening, focusing, developing). The GAO seems pessimistic and notes:

As we reported in March 2010, CMS did not establish an adequate process during its initial recovery audit contracting demonstration or in planning for the national program to ensure prompt resolution of identified improper payment vulnerabilities.

Agency officials indicated that they intended to review vulnerabilities on a case-by-case basis and were considering assigning them to risk categories that would help them prioritize action. However, this recommendation has not been implemented.
The report reveals that CMS processes over 4 million Medicare claims every day with almost no accountability. Health care fraud is out of control. Reading between the lines, the government concedes that the problem is too big to handle. Hence, ithe Government will continue to rely upon insiders to blow the whistle and file qui tam lawsuits using the False Claims Act.

Sunday, June 27, 2010

Gulf Oil Spill Cleanup Contractor Facing Prior Qui Tam Suit

Gulf oil spill cleanup spending will be heavily scrutinized for false claims act violations in the coming years, as the cleanup efforts ramp up, and over an estimated $20 billion dollars are poured into the region to mitigate some of the damage from the largest off-shore oil disaster in US history. Already, one contractor working on providing protection to the beautiful beaches of Florida's panhandle region has been accused of prior FCA violations in a contract from 2000 to help rebuilding in Honduras from the devastation of 1998's Hurricane Mitch. The lawsuit claims over $7 million in misrepresentations of labor and equipment charges for money received from the US Agency for International Development, although the defendant company has denied the accusations and taken its own legal actions to get paid. A portent of future fraud litigation and counter-suits involving a variety of contractors in the massive Gulf cleanup effort to come?

Read more in the Pensacola News Journal at:

Mobil agrees to repay the government $32.2 million for underpaid royalties

Mobil Oil and several affiliate companies have agreed to pay $32.2 million to resolve False Claims Act violation allegations. According to the Department of Justice, Mobil Natural Gas Inc., Mobil Exploration & Producing U.S. Inc. and their affiliates “knowingly underpaid royalties” owed from the production of natural gas on American Indian and Federal lands. The Justice Department alleges that from March 1, 1988 to Nov. 30, 1999, the Mobil companies underpaid multiple Native American tribes and the United States due to the systematic understating of the produced natural gas’ value.

Northrop Grumman to pay $12.5 million

WASHINGTON – Northrop Grumman Systems Corporation has agreed to pay the United States $12.5 million to settle allegations that it knowingly submitted false claims to a number of government agencies in connection with electronic parts the company supplied for use in the manufacture of navigation systems for military airplanes, helicopters, submarines and certain equipment used in space, the Justice Department recently announced.