Monday, October 24, 2005

Court Decision could Invite Flurry of Lawsuits

A story in today’s edition of Inside Higher Education explores the ramifications of a federal appeals court decision clearing the way for a former admissions director and the federal government to sue Oakland City University for allegedly paying recruiters based on enrollment, despite having agreed not to do so under the Higher Education Act.

According to piece that can be found here on the Web, experts on higher education law said the court’s ruling could “reverberate far beyond the case at hand, by radically altering the interpretation of the federal False Claims Act and undermining the legal validity of guidance from the Education Department and other federal agencies that colleges regularly follow.”

The lawsuit was brought by Jeffrey Main, who said that Oakland City, a private institution in Oakland City, Ind., that is affiliated with the General Baptist Ministries, had compensated him in part based on the number of students he enrolled, which is prohibited by the Higher Education Act, the law that governs federal student aid programs. Main, joined by the federal government, charged that Oakland City violated the False Claims Act because, in initially applying for the right to distribute federal financial aid, its officials had signed a document (known as the Program Participation Agreement, or PPA) in which they made a wide range of commitments, including agreeing not to offer incentive compensation.

Wednesday, October 19, 2005

Washington Post profiles Whistleblower Bunny Greenhouse

A profile in the pages of today’s Washington Post tells the story of Bunny Greenhouse, the former “perfect bureaucrat” turned whistleblower who questioned plump contracts awarded to Halliburton during the run-up to the War in Iraq. The 61-year-old Greenhouse has lost her job and many friends, but she continues to tell her story “for truth’s sake.”

You can read this interesting profile of a whistleblower at washingtonpost.com.

Tuesday, October 18, 2005

Staples Pays U.S. $7.4 Million to Settle False Claims Allegation

Staples Contract and Commercial, a division of office products giant Staples, Inc., has paid the United States $7.4 million to settle allegations that it submitted false claims when it sold office supply products manufactured in countries not permitted by the Trade Agreements Act to United States government agencies, the Justice Department announced in a press release today.

The settlement resolves allegations that the Framingham, MA-based company sold products from countries that do not have reciprocal trade agreements with the U.S., such as China and Taiwan. Staples was required by its contract with the General Services Administration (GSA) to prevent such items from being offered for sale to U.S. government agencies.

This case was filed under the qui tam provisions of the False Claims Act by Safina Office Products and two of its executives, Edward Wilder and Robert Hsi Chou Lee, in the U.S. District Court for the District of Columbia in January 2003. Safina, Wilder and Lee will collectively receive $1.11 million of the total recovery as their statutory award. Under the whistleblower provisions of the False Claims Act, private parties can file an action on behalf of the U.S. and receive a portion of the proceeds of a settlement or judgment awarded against a defendant.

The full press release of this qui tam story is available via usnewswire.com.

Monday, October 17, 2005

Serono to Pay $704 Milion for Illegal Marketing of AIDS Drug

Swiss corporation, Serono, S.A., together with its U.S. subsidiaries and related entities, has agreed to pay $704 million to resolve criminal charges and civil allegations in connection with illegal schemes to promote, market and sell its drug, Serostim, the Justice Department announced today.  Serostim is used to treat AIDS wasting, a condition involving profound involuntary weight loss in AIDS patients.

Under the settlement, Serono Laboratories has agreed to pay a $136.9 million criminal fine and its affiliate companies a total of $567 million to settle civil liabilities.  Today’s global resolution, the third largest health care fraud recovery by the U.S., also ensures that the Medicaid program and each of the state Medicaid agencies which paid for Serostim during the time frame of the investigation, 1996 through 2004, will recoup all monies paid based on Serono’s illegal activity.

The complete story on this award and the action that led to it can be found at www.usdoj.gov.

Friday, October 14, 2005

Lawsuit alleges Boeing Planes are Unsafe, should be Grounded

Documents made public in a whistleblower lawsuit filed against The Boeing Company suggest that thousands of unsafe and unapproved parts have been installed on jets the company produced between 1994 and 2001—and perhaps longer, according to a news item in Mother Jones.

Read the entire whistleblower story at motherjones.com.

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