ZOLL Medical Corporation, headquartered in Massachusetts with locations in Rhode Island, will pay the United States $400,000 to resolve allegations that it violated the Trade Agreements Act (TAA). The United States contends that ZOLL sold replacement echocardiogram (ECG) cables to various federal government purchasers (including the Department of Defense) and, when doing so, represented that the cables had been made in the United States. ZOLL knew, however, that the cables were actually manufactured in China. These cables were purchased for use with cardiac monitors and defibrillators. The false representations occurred from January 2019 through November 2022.
TAA violations are just one type of government procurement or defense contractor fraud. Under the TAA, goods sold to the military or federal government purchasers must be made in America or certain designated foreign countries. China is not such a country.
When corporations choose to supply the American military and American government agencies with goods, the law is clear: we expect those goods to be American made. When companies fail in their legal duty by substituting foreign products for the U.S.-origin goods that the law requires, we will hold them accountable.
– Zachary A. Cunha, U.S. Attorney from the District of Rhode Island
Notably, the U.S. Attorney’s Office for the District of Rhode Island has resolved two other civil matters involving misrepresentations on goods manufactured abroad. They have also prosecuted two individuals for a fraudulent scheme to import and sell Chinese-made counterfeit U.S. military uniforms to the U.S. military.
These allegations were brought to the government’s attention by our whistleblower client. With our assistance, the client filed a qui tam whistleblower lawsuit in 2019, alleging that ZOLL violated the False Claims Act. The ZOLL settlement resolves common law claims as an alternate remedy under the False Claims Act.
Our whistleblower client will receive a share of the settlement.
We are incredibly proud of our client for speaking up and sharing his concerns with the government. Like other whistleblowers, he made a difficult choice, but never wavered in his commitment. It was an honor to represent him, along with our co-counsel, Louise Herman of Herman Law Group.
From the first time we met with our client, we recognized that he was committed to doing the right thing. He was steadfast in that mission, and we are honored to have been his lawyers.
-Suzanne Durrell and Erica Blachman Hitchings
This matter was handled by the United States Attorney’s Office for the District of Rhode Island, specifically by Assistant United States Attorneys Bethany Wong and Dulce Donovan. The government’s investigation was thorough and extensive and supported by numerous federal agencies, including:
WLC’s Erica Blachman Hitchings praised the government team:
The government’s entire investigative team in this matter was second-to-none. Their commitment to ferreting out the truth never wavered. Our client and case team here at WLC are deeply appreciative of their hard work on behalf of the American taxpayers and the agencies they represent.
WLC Founder and Managing Member Suzanne Durrell added:
The United States Attorney’s Office for the District of Rhode Island has demonstrated a clear commitment to its False Claims Act and affirmative civil enforcement work. Civil Chief Bethany Wong steered this effort masterfully from start to finish, along with AUSA Dulce Donovan, and supported by the leadership of First Assistant Sara Miron Bloom and U.S. Attorney Zachary A. Cunha. We are very grateful to these public servants.
The largest home health care fraud settlement in the history of the False Claims Act was announced by the DOJ. Amedisys, Inc. (Amedisys) agreed in April 2014 to pay a $150 million home health care fraud settlement. The settlement resolved claims brought by our client under the federal False Claims Act. In addition, Amedisys entered into a Corporate Integrity Agreement with the Office of HHS-OIG.
This settlement marked the successful conclusion of a lengthy effort by our client, relator CAF Partners (a partnership of individuals), to expose Amedisys’ fraudulent home health care practices.
Home health care is provided by a professional caregiver to a patient in an individual home, as opposed to care provided in group homes like nursing homes. In order to be eligible for reimbursement from Medicare for the provision of home health care services, a physician must certify that 1) home health care services are medically necessary; 2) the patient’s condition will likely improve with home health care, or home health care will prevent further deterioration of the patient’s condition; and 3) the patient is homebound.
Our client alleged that Amedisys systematically manipulated data to make patients appear sicker than they actually were in order to justify extra, unnecessary therapy visits to qualify for bonus payments under the Medicare Home Health Prospective Payment System (PPS). Amedisys’ proprietary software system admitted, and subsequently recertified, Medicare patients for home health care when they did not meet the Medicare guidelines for services. Amedisys also targeted Medicare patients for recertification in order to qualify for higher reimbursement rates from Medicare.
Our client brought Amedisys’ fraud to the attention of the government by filing a qui tam complaint under the False Claims Act. Under the False Claims Act, a private citizen (known as a “relator”) who suspects or knows of fraud against the government can act as a whistleblower and file a sealed complaint on behalf of the government. If the case is successful, the relator is entitled to a share – between 15% and 30% – of the government’s recovery.
We were assisted in this case by Kenney & McCafferty. We filed the whistleblower case in the Eastern District of Pennsylvania. United States ex rel. CAF Partners v. Amedisys, et al., Civ. No.:10-cv-02323 (E.D. PA)
The Whistleblower Law Collaborative LLC, based in Boston, devotes its practice entirely to representing clients in bringing actions under the federal and state False Claims Acts and other whistleblower programs. Under the False Claims Act, a private citizen (known as a “relator”) who suspects or knows of fraud against the government can act as a whistleblower and file a sealed complaint on behalf of the government. If the case is successful, the relator is entitled to a share of the government’s recovery. Among the firm’s many successes is the government’s $885 million settlement with AmerisourceBergen, a pharmaceutical drug wholesaler, for illegal repackaging of injectable drugs into pre-filled syringes.
For more information, contact the Whistleblower Law Collaborative LLC at 617.366. 2800
Pfizer Inc. (Pfizer) agreed to pay a record-breaking criminal recovery of $1.3 billion dollars in addition to $1 billion in civil recoveries to settle multiple fraud cases filed by relators under the False Claims Act whistleblower provisions. The whistleblowers alleged that Pfizer caused the submission of false claims to the federal and states governments. Pfizer also entered into a Corporate Integrity Agreement with HHS-OIG. Pfizer did so to settle claims that, among other things, the company misbranded one of its pain killer drugs, promoted the off label use of numerous drugs, and paid kickbacks to doctors to induce or reward the prescription of Pfizer drugs.
As part of the settlement, Pfizer subsidiary Pharmacia & Upjohn Company, Inc. (“Pharmacia”) entered a guilty plea to a federal criminal indictment charging that the company “misbranded” the painkiller Bextra (valdecoxib) by promoting the drug for variety of conditions and at dosages other than those for which its use was approved by the Food and Drug Administration. Bextra was withdrawn from the market in 2005 after concerns about its safety profile, especially for cardiovascular risks, in long term users of the drug.
Attorneys Bob Thomas and Suzanne Durrell represented a whistleblower whose claims against Pfizer were settled as part of this record breaking agreement. Our client’s qui tam complaint alleged nationwide misconduct in which Pfizer paid illegal remuneration for speaker programs, mentorships, preceptorships, so-called “journal clubs”, and gifts (including entertainment, cash, travel and meals) to health care professionals to induce them to promote and prescribe several drugs, including Lipitor®, Norvasc®, Viagra®, Zithromax®, and Zyrtec®, in violation of the Medicare and Medicaid Anti-Kickback Act and the False Claims Act. He also alleged that Pfizer had retaliated against him by firing him without good cause after he complained internally about Pfizer’s marketing practices.
A number of other such suits were filed by other whistleblowers. The government was able to substantiate allegations made in a number of the lawsuits and Pfizer agreed to pay the combined $2.3 billion record-breaking criminal and civil recovery of $1.3 billion dollars in addition to $1 billion to settle the civil cases.
Serono, Inc., the Swiss manufacturer of the AIDS treatment drug Serostim®, reached a then record settlement with the Department of Justice and several state Attorneys General, agreeing to pay $704 million and plead guilty to scheming to boost sagging sales by, among other things, offering kickbacks to doctors to write prescriptions. As part of the plea, Serono Laboratories was barred from participating in federal health care programs for five years, paid a criminal fine of $136.9 million, and paid $567 million to resolve its civil liabilities under the False Claims Act. Serono also entered into a Corporate Integrity Agreement with HHS-OIG.
Serostim, which contains the human growth hormone Somatropin, was approved by the U.S. Food and Drug Administration (FDA) in 1996 to treat AIDS wasting, an often-fatal condition involving severe weight loss. At about the time the FDA approved the drug, protease inhibitor drugs came on the market. Those drugs, when used in combinations or “cocktails,” sharply curtailed the AIDS virus in patients, making them less prone to AIDS wasting.
Serono offered doctors free trips to the south of France in return for agreeing to write up to 30 new prescriptions for Serostim, which cost $21,000 for a 12-week treatment regimen. The company also conspired to introduce a new test for AIDS wasting, despite not having FDA approval. The test diagnosed AIDS wasting even in the absence of weight loss, with the United States estimating that 85 percent of the resulting Serostim prescriptions were unnecessary.
International Nephrology Network (INN), a subsidiary of AmerisourceBergen Corporation, paid $15 million to the United States and the States to settle its civil False Claims Act liability in connection with its role in systematically promoting “overfill billing” for the drug Aranesp® with co-defendant Amgen Inc. This settlement was announced on the same day as the record $762 million Amgen settlement (see related Amgen settlement).
As with Amgen, relator and her team of attorneys litigated the case against INN for over two years while the government continued its civil and criminal investigation. During discovery, documents and deposition testimony confirmed that INN, in conspiracy with Amgen, had used overfill to entice physicians to choose Aranesp based on the promise of increased Medicare and Medicaid reimbursement for the overfill. Like Amgen, INN settled on the eve of trial of relator’s case in Boston.
Several co-counsel assisted in this litigation, which was styled as:
WellCare Health Plans (“WellCare”), a leading health management organization that provides or arranges for the provision of managed care services under government-sponsored health care programs, agreed to pay the United States and nine States $137.5 million to resolve its liabilities under the False Claims Act. WellCare also agreed to pay $80 million as part of a Deferred Prosecution Agreement with the United States, entered into a Corporate Integrity Agreement with HHS-OIG, and resolved its potential liabilities to the SEC by entering into a consent judgment and agreeing to pay a civil penalty of $10 million.
WellCare operates a variety of Medicaid and Medicare plans, including prescription drug plans, pursuant to contracts with the federal and state governments. Our whistleblower client alleged that WellCare knowingly violated the law, its contracts, several provisions of the federal and comparable state False Claims Acts, and the Medicare and Medicaid Anti-Kickback Statute. It did so, by: