Aggregate Industries, Inc. (Aggregate), the largest asphalt and concrete supplier in New England, plead guilty, paid $50 million in cash, and agreed to provide up to $75 million in insurance coverage for its role in supplying adulterated concrete to the “Big Dig” project, a massive, reconstruction of downtown Boston’s roadways, tunnels, and bridges. It also agreed to contribute to a fund to be used for future repairs on the Big Dig and entered into a Compliance Agreement with the United States Department of Transportation.
The relator, who worked on the Big Dig project, alleged in his False Claims Act qui tam complaint that Aggregate supplied out–of-specification or non-conforming “10-9” concrete to the Big Dig and that Aggregate (and co-defendants Bechtel and Parsons Brinckerhoff—see related settlement) failed to properly oversee the construction. As a result, false or fraudulent claims for payment were submitted to the government and paid. His claims against Aggregate (and those of other whistleblowers) were resolved as part of the settlement between the United States and Massachusetts and Aggregate.
We represented the first to file relator who alleged that U.S. WorldMeds LLC (“USWM”) paid kickbacks to patients to induce prescriptions of its drugs Apokyn and to physicians to induce prescriptions of both Apokyn and Myobloc, all paid for by Medicare Part D. The kickbacks to patients originated from USWM improperly funding a sham third-party foundation as a “patient assistance fund” that acted as a conduit for patient co-payments for expensive Apokyn prescriptions for Medicare patients. Filed in 2013, this case is the first successful FCA whistleblower claim for patient assistance fund fraud. While the United States has settled several such claims against other pharmaceutical manufacturers starting in 2017, these settlements were not part of a whistleblower FCA qui tam case. The kickbacks to physicians for Apokyn and Myobloc prescriptions included trips to the Kentucky Derby, lavish meals and entertainment, and excessive consulting and speaking fees. To resolve these False Claims Act allegations, USWM agreed in May 2019 to pay the United States $17.5 million and entered into a five year Corporate Integrity Agreement with HHS-OIG.
We co-counseled with Kellogg Hansen Todd Figel & Frederick in the case captioned as:
United States ex rel. Relator v. US WorldMeds LLC, et al., Civil Action No. 3:13CV363 (SRU) (D. Connecticut).
Medical device company St. Jude Medical Inc. paid the United States $16 million to resolve allegations raised by the whistleblower that the company violated the False Claims Act when it used post-market studies and a registry to pay kickbacks to induce physicians to implant the company’s pacemakers and defibrillators.
The whistleblower alleged that while St. Jude collected data and information from participating physicians through three post-market studies and a device registry, the company knowingly and intentionally used those studies and registry as a means of increasing its device sales by paying certain physicians to select St. Jude pacemakers and implantable cardioverter defibrillator for their patients. In each case, St. Jude paid each participating physician a fee that ranged up to $2,000 per patient. St. Jude solicited physicians for the studies in order to retain their business and/or convert their business from a competitor’s product.
Post-market studies are intended to assess the clinical performance of a medical device or drug after that device or drug has been approved by the Food and Drug Administration. Registries are collections of data maintained by a device manufacturer concerning its products that have been sold and implanted in patients. St. Jude subverted the valid purposes of the post-market studies and the device registry
Attorneys Thomas and Durrell were co-counsel in this case with attorneys Ken Nolan and Marcella Auerbach.
Diesel Direct, LLC and two of its executives paid the Commonwealth of Massachusetts $850,000 to settle allegations that they violated the Massachusetts False Claims Act. In addition to the $850,000 payment, Diesel Direct has agreed not to bid on any contract with the state or its agencies for five years.
Our client brought the fraud to the state’s attention by filing a qui tam complaint under the Massachusetts False Claims Act. The lawsuit alleged that Diesel Direct, LLC and two executives violated the False Claims Act by knowingly delivering nonconforming petroleum diesel fuel to state agencies while charging for a higher-priced and more environmentally-friendly Biodiesel fuel.
Biodiesel is a renewable fuel that reduces particulate matter and tailpipe emissions that contribute to global warming. It is nontoxic, biodegradable, and suitable for sensitive environments. As a result, spills are far less harmful and much less expensive to clean up than a petroleum diesel spill.
Our client’s lawsuit alleged that when state agencies ordered Biodiesel fuel from Diesel Direct, the company instead delivered nonconforming petroleum diesel fuel, which does not have the environmental benefits of Biodiesel. Yet, Diesel Direct charged the state agency for the more expensive Biodiesel. As a result, our client alleged that Diesel Direct not only overcharged state agencies, but also caused them to consume fuel that emitted greater greenhouse gases and particulate matter into the atmosphere. After a two-year investigation, the Massachusetts Attorney General’s Office intervened in the lawsuit and resolved the claims in this settlement.
As Massachusetts Attorney General Maura Healey noted:
By not delivering on the terms of its contracts, this company bilked Massachusetts out of taxpayer dollars and undermined our efforts to reduce harmful emissions.
The settlement also resolves allegations that Diesel Direct improperly charged state agencies in other ways and failed to spend two percent of its contract-based sales with minority-, women-, and/or service disabled veteran owned business enterprises as it was required to do.
Our courageous client brought the fraud to the attention of the government by filing a qui tam complaint under the Massachusetts False Claims Act. Under this law, 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, as here, the relator is entitled to a share of the government’s recovery.
This False Claims Act settlement resolved a customs fraud case brought by the Relators against Selective Marketplace Ltd. , a United Kingdom retailer of premium womenswear merchandise under two brands, Wrap London and Poetry. While Selective Marketplace is an English registered company with headquarters in England, it regularly shipped merchandise from the United Kingdom directly to thousands of U.S. customers.
Importers of goods into the United States are generally subject to paying import duties, including duties on packages with an aggregate fair market value over a certain de minimus amount. For example, in 2016, packages with a value under $200 could enter the United States duty free.
The Relators, and the United States who intervened in the case, alleged that Selective violated the False Claims Act, 31 U.S.C. §§ 3729(a)(1)(C) and (G) (called the Reverse False Claims provision), by improperly and knowingly concealing and avoiding United States Customs import duties applicable to the Wrap London and Poetry merchandise Selective was shipping to its U.S. customers.
It did so by splitting single orders with an aggregate value of greater than $200 into multiple packages for shipment so that each package fell below the minimum value subject to import duties. This type of customs fraud is called structuring. This not only deprived the U.S. Treasury of import duties, it undermined domestic American competitors whom the customs law was meant to protect. To resolve these allegations, Selective Marketplace agreed in May 2019 to pay the United States $610,000.
United States ex rel. Relators v. Selective Marketplace Ltd. et al., Civil Action No. 2:17-cv-380-LEW (D. Maine)
North Atlantic Medical Services Inc. (NAMS), doing business as Regional Home Care Inc., paid $852,378 to the United States and the Commonwealth of Massachusetts to resolve allegations that it used unlicensed employees to provide respiratory therapy services to patients in Massachusetts and billed Medicare and Medicaid for these services.
NAMS is a medical device company based in Massachusetts that provides equipment and services for the treatment of respiratory ailments, such as oxygen deficiency and sleep apnea. Medicare and Medicaid require suppliers of respiratory therapy equipment and services to comply with state licensing standards. In Massachusetts, the Department of Public Health requires respiratory therapists to apply for and obtain a license.
In their False Claims Act qui tam complaint, the relators, former employees of NAMS, alleged that NAMS knowingly violated Medicare and Medicaid billing requirements for sleep therapy and oxygen services in the home, and as a result, put patients’ health at risk and submitted false or fraudulent bills to the government in violation of the federal and Massachusetts False Claims Acts. They alleged that NAMS continued to use unlicensed personnel and bill Medicare and Medicaid even after the Massachusetts Department of Public Health informed the company that the practice was illegal.