Back to School Fraud?

It has been quite a summer, here at Bracker & Marcus LLC. We kicked things off with a nice False Claims Act settlement against a Compound Pharmacy, alleged to have defrauded Medicare and Medicaid by using bulk ingredients but billing for name-brand. We then attended the national conference for the National Employment Lawyers Association in N’awlins, where this Tulane grad got his fair share of etouffee, po’boys, and beignets. And now if you can believe it, it’s already time to go back to school. At least it is here in Marietta, GA, where the county operates on a quarter system. Which brings us to another area rife with fraud: for-profit education.

Many attendees of for-profit colleges obtain money from the federal government to help pay for their schooling, such as Pell or VA grants or loans. In order for schools to qualify to accept these grants, they must abide by certain rules. For example, colleges are not permitted to pay recruiters based on how many students they enroll; this is called the “incentive compensation ban.” The 90/10 rule requires for-profit schools to obtain at least 10% of their revenue from private payors or financial aid sources besides the federal government. And the schools may only admit students who actually qualify, meaning having high school diplomas or speaking the language the classes are taught in, but some schools have been caught helping unqualified students falsify Pell grant applications. Any of these violations could form the basis of a False Claims Act case.

In addition to the for-profit colleges, there are other privately-run, but publicly-funded, schools that may fall under the umbrella of the False Claims Act as well. One example is schools that are educating boys and girls in juvenile correction facilities or behavioral health institutions.

And there are also private universities that receive federal grant funds for research projects. If the university does not follow the requirements of the grant or the results are frauded up, it may be liable under the FCA. Just a few months ago, Duke University paid $112.5 million to settle claims that they falsified scientific data in order to obtain additional grants.

So as the summer comes to an end, remember to wear sunscreen, study hard, and look out for potential fraud!

Look Out for Fraud During Hurricane Season

As the 2019 hurricane season begins, the Department of Justice and Bracker & Marcus LLC remind the public to be on the lookout for fraud against the Government.

The Department of Justice established the National Center for Disaster Fraud (NCDF) in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region, which opened opportunities for criminals to exploit people and Government assistance during vulnerable times.

While compassion is generally shown in the aftermath of natural disasters, there are some individuals and organizations who use these tragic events to take advantage of those in need. Among others, examples of illegal activity being reported to the NCDF and law enforcement include:

  • Fraudulent submission of claims to insurance companies and the federal government;

  • Price gouging; and

  • Contractor fraud

One example is a False Claims Act verdict that went all the way to the Supreme Court. In U.S. ex rel. Rigsby v. State Farm Fire & Casualty Co., the “good neighbor” insurance company was found to have misclassified wind damage to a home—which State Farm would have had to pay for under the owner’s insurance policy—as flood-related damage, which would have been paid by the federal government’s flood insurance program.

If you suspect fraudulent activities, please contact us for a free consultation.

Compound Pharmacy Agrees to $365,000 Settlement of False Claims Act Lawsuit

Bracker & Marcus LLC is pleased to announce that the U.S. Attorney’s Office for the Middle District of Georgia has reached an intervened “ability-to-pay” settlement with defendant Lake Country Pharmacy & Compounding Center and its owners in the amount of $365,000 plus interest. Lake Country will also be subject to a Corporate Integrity Agreement to ensure that it operates on the straight and narrow moving forward. Our client (who wishes to avoid media coverage) will receive a 20% relator’s share of the Government’s recovery.

In his qui tam complaint, our client alleged that Lake Country, an independent pharmacy in Greensboro, Georgia, was improperly billing Medicare, TRICARE, and Medicaid for compounded drugs made with expensive tablets, when in fact the drugs were made using cheap bulk powders that were not eligible for reimbursement. When he learned that this was improper while watching a seminar on ethical practices in compound pharmacies, he immediately reported his concerns to the owners, which resulted in him being fired and asked to leave the premises. (Our client’s claim of retaliation under the False Claims Act has also been settled.) In short order, he found our co-counsel, prominent Athens-area employment lawyer John Beasley, and together we filed a qui tam lawsuit. The United States found over $2.2 million in potential damages.

In addition to being an upstanding citizen, our client is a veteran of the United States Marine Corps. We are proud to have represented him in this action and congratulate him on having come forward and reported this matter to the Government. He knew from the start that this was not likely to be a large recovery, but his only concern was righting a wrong and protecting patients, and his integrity compelled him to be a whistleblower.

We also congratulate Assistant U.S. Attorney Todd Swanson and investigator Shakethia Morgan for a successful investigation and settlement.