Michael Morse, Pamela C. Brecht and Marc S. Raspanti, partners in the law firm Pietragallo Gordon Alfano Bosick & Raspanti, LLP, presented on “Qui Tam Litigation: A Practitioner’s Symposium” sponsored by the American Bar Association’s Criminal Justice Section and the White Collar Crime Southeast Region Subcommittee. The seminar took place on September 25, 2015 at Alston & Bird, LLP in Charlotte, NC.
This seminar presented a panel of nationally recognized experts to discuss strategic considerations, recent developments and experienced viewpoints on qui tam and FIRREA litigation.
Mr. Morse discussed Recent Trends and Developments in the Law. He serves as Chair of the Qui Tam Practice Group at Pietragallo. He is also a member of the Government Enforcement, Compliance, and White Collar Litigation Group as well as the Health Care and Litigation Practice Groups. Mr. Morse has developed a nationwide practice representing whistleblowers, under federal and state false claims acts, who report fraud committed against the government by corporations and individuals. He represents whistleblowers from across the United States who have exposed fraud against the federal and state governments in the areas of: pharmaceutical sales and marketing; health care; defense contracting; finance; federal stimulus; construction; research; collection; and government procurement.
Ms. Brecht spoke on The Investigation of Potential Claims and the Filing of a Qui Tam Complaint. Ms. Brecht is an active member of the Qui Tam Practice Group, with experience also in employment law, white collar criminal litigation, and labor relations. She has been or is currently involved in litigating some of the most complex Qui Tam cases filed in the United States. Her cases have included alleged fraud by a large multi-state Medicaid managed care contractor, FCA violations by three of the largest hospital corporations in the country, and complex financial relationships among healthcare providers, as well as pharmaceutical fraud. Read More
In 2013, the Securities and Exchange Commission (“SEC”) announced a new policy requiring admissions as part of settlement in certain cases. While still using “no admit, no deny” in the majority of cases, the SEC, in certain circumstances, will now require defendants to admit wrongdoing in order to settle with the agency. While some heralded this move as a step towards greater accountability, others have warned of the dire consequences of this policy shift. As we will see below, so far at least, the new policy appears not to have made a significant impact. However, the real danger, from the point of view of defendants and the defense bar, may be this policy bleeding into other types of enforcement actions.
A. The SEC’s “No Admit, No Deny” Policy, The Financial Crisis, and Judge Rakoff
For many years, the SEC, like other federal administrative agencies, allowed defendants to settle charges without admitting liability. As the price of that allowance, a settling party must agree not to publicly deny the allegations. The “no admit, no deny” policy is thus designed to allow defendants to avoid making admissions that could damage them in collateral proceedings while preventing them from publicly maligning the agency’s case after reaching settlement.[1]
While this policy was mutually beneficial to both the SEC and defendants, it became a political casualty of the financial crisis. The 2007-2008 crisis was the largest and most severe financial event since the Great Depression. The explosion in the issuance of mortgage-backed securities and collateralized debt obligations fueled a housing bubble along with rampant abuses in the mortgage industry. When the bubble burst, millions found themselves under water on mortgages they could not afford while the major financial institutions were stuck with hundreds of millions of dollars in toxic assets on their books.
In the wake of the 2007-2008 financial crisis, the SEC was roundly criticized, by the public, Congress, prosecutors, and the press, for both its obliviousness to the marketplace problems that precipitated the crisis (excessive risk-taking at Bear Stearns, abuses at Lehman Brothers, widespread fraud in the mortgage industry, etc.) Read More
Mental health care providers should be mindful that DOJ has maintained its vigilance in pursuing false claims cases against mental health care providers when evidence calls into question the extent of services provided or demonstrates that the claimed services were not medically necessary. The most recent example is the case of Santiago Borges, Erik Alonso, and Cristina Alonso, all of whom entered pleas of guilty last Wednesday in the U.S. District Court for the Southern District of Florida to charges relating to false claims for mental health care purported to have been provided at three Miami area clinics.
According to the government, Borges owned the now-defunct mental health centers R&S Community Health, Inc. (R&S) and St. Theresa Community Mental Health Center, Inc. (St. Theresa), and was an investor in New Day Community Mental Health Center, LLC (New Day). Eric Alonso was the clinical director of all three centers, and Cristina Alonso was a therapist at R&S. As with other recent mental health care prosecuted by DOJ, the government zeroed in on claims by the clinics that they provided “intensive” mental health services. According to the government, the clinics billed Medicare for costly Partial Hospitalization Program (PHP) services that were not medically necessary or not provided to patients.
The government claimed that from 2008 through 2010, the three defendants were involved with causing the clinics (R&S, St. Theresa and New Day) to bill for procedures that were not provided to patients. Borges admitted that he paid kickbacks to patient recruiters who, in exchange, referred beneficiaries to the centers. Eric Alonzo admitted that he oversaw the preparation of false patient records. Cristina Alonzo admitted that she fabricated patient records, including group therapy session notes that were used to support claims for reimbursement from Medicare. The total of the fraudulent claims submitted was more than $70 million, and, according to the government, Medicare paid approximately $28 million on those claims. Read More
PITTSBURGH, PA, October 8, 2015 – Pietragallo Gordon Alfano Bosick & Raspanti, LLP is pleased to announce the election of its newest partner, Jason M. Reefer. Mr. Reefer is a member of the Product Liability group and is based in the Pittsburgh office.
Mr. Reefer’s practice is dedicated to defending manufacturers of pharmaceutical products, automotive vehicles, and firearms in litigation pending throughout the United States. Mr. Reefer has litigated at all levels of state and federal court, including the U.S. Supreme Court, where he represented an amicus curiae in the seminal case, Mutual Pharmaceutical Co. v. Bartlett.
“Mr. Reefer is one of the truly gifted young lawyers in America in the Product Liability field,” said Bill Pietragallo.
He holds two degrees from the University of Pennsylvania: a B.A., summa cum laude, with Distinction, earned in 2005; and a J.D., earned in 2008. Mr. Reefer is admitted to the bar in Pennsylvania and to the U.S. District Court- Eastern District of Pennsylvania. Read More
On Friday, the DOJ announced it had reached an agreement with an Ohio health system to settle allegations of violations of the False Claims Act for costs resulting from medically unnecessary procedures performed at one of the system’s hospitals. Under the agreement, Cincinnati-based West Chester Hospital and its parent company, UC Health, will pay $4.1 million to settle claims that West Chester billed the government for medically unnecessary procedures performed by orthopedic surgeon Abubakar Atiq Durrani, M.D
According to the government, the false claims consisted of hospital charges for spine surgeries performed by Dr. Durrani between 2009 and 2013. At the time of the announcement of the settlement, Principal Deputy Assistant AG Benjamin C. Mizer distinguished the responsibility of the hospital from that of the surgeon, saying that “hospitals have the responsibility to ensure that services provided at their facilities are medically necessary and appropriate before they bill federal healthcare programs for those services.”
The government has charged Dr. Durrani criminally, alleging that he intentionally made false claims and false statements in relation to cervical, thoracic and lumbar surgeries. After being arraigned on those criminal charges in 2013, Dr. Durrani reportedly fled to his native Pakistan, and remains a fugitive. The pending criminal charges include several sensational allegations of bogus surgical recommendations made by Dr. Durrani to patients. This included allegations that Dr. Durrani falsely informed patients that their conditions were surgical emergencies when they were not, and going further in some instances by telling patients they were at risk for paralysis or that a patient’s head would fall off if the patient were in a car accident because there was nearly nothing holding it on.
Dr. Durrani is also the subject of more than 250 civil malpractice claims by former patients, including one that went to trial shortly after Durrani fled the country and resulted in a judgment in the amount of $750,000. Read More
Kenneth D. McArthur, Jr. and Pamela C. Brecht will speak at the National Community Pharmacists Association’s 117th Annual Convention and Trade Exposition in Washington, DC on “Top 10 Recent Legal Developments Impacting Community Pharmacy Practice.” Read More
Marc S. Raspanti will speak at Seton Hall Law School’s Healthcare Compliance Certification Program on the False Claims Act, including qui tam claims, whistleblower suits, and other topics. Read More
The practice of lobbying and government relations, particularly on behalf of companies doing business with the government, has long been a focus of DOJ investigators and prosecutors. They are known to look skeptically at the purpose of “consulting fees,” particularly when those consulting fees appear to be spun into political contributions. One recent example is the case of lobbyist John P. Raphael, in a matter involving conduit contributions to elected officials in Ohio. Raphael agreed last Friday to plead guilty in the U.S. District Court for the Southern District of Ohio to an information charging him with violation of the Hobbs Act.
According to the government, from March 2005 to February 2013, Mr. Raphael served as a lobbyist for RedFlex Traffic Systems, a vendor for red light traffic enforcement cameras. RedFlex apparently engaged Raphael to seek and obtain contracts for the Cities of Columbus and Cincinnati. At the time of his plea, Raphael admitted that he solicited campaign contributions from RedFlex on behalf of elected officials in Columbus and Cincinnati, and repeatedly pressured and induced the company to make contributions by advising the company that it would lose its contracts if it did not. The campaign contributions, which totaled more than $70,000 during this time period, were then funneled through Raphael in his own name and in the names of his family members and business associates.
In June, the former CEO of RedFlex, Karen Finley, pleaded guilty in the same case to an information charging her with conspiracy to commit Federal Programs Bribery and Honest Services Wire and Mail Fraud. In August, Finley also entered a plea of guilty in the U.S. District Court for the Northern District of Illinois to similar charges regarding a $2 million bribery scheme in Chicago. The investigation in that case resulted in charges against Chicago city officials as well. Read More
While the Computer Crime and Intellectual Property Section (CCIPS) of DOJ has been in existence for nearly 20 years, the emphasis on criminal enforcement of intellectual property laws has gained significant importance in more recent years. Beginning with its Task Force on Intellectual Property more than ten years ago, DOJ has continued to ramp up its fight against theft of intellectual property, identifying it as a threat to U.S. economic security. This has also included the development of specialized prosecutors (CHIP – Computer Hacking / Intellectual Property) prosecutors in U.S. Attorney’s offices around the country, particularly in areas where the threat is significant.
On Friday, Attorney General Loretta Lynch announced DOJ’s next step in its efforts, outlining a new collaborative strategy to more closely partner with businesses in intellectual property efforts. Her announcement came as part of remarks in a speech she made in Boston to MassChallenge, one of the world’s largest start-up accelerators. She said that, while the digital age has provided many benefits, hacking has demonstrated new vulnerabilities to companies, even large ones, to exploitation of their intellectual property. She cited to an estimate by the Organization for Economic Cooperation and Development that trade and counterfeit and pirated goods accounts for up to $250 billion every year. She said that this amount does not encompass the harm caused by unauthorized on-line distribution of copyrighted works, or the theft of trade secret information by competitors or foreign governments.
Attorney General Lynch said that the FBI’s collaborative strategy in this regard will include partnering with third party market places by providing advice regarding the acquisition of the right analytical tools and techniques to combat intellectual property concerns on their web sites. The FBI will also serve as a bridge between brand owners and third party market places in an effort to mitigate instances of the manufacture, distribution, advertising and sale of counterfeit products. Read More
