Friday, March 31, 2006

NY Judge rules Against Gabelli in Investor Suit

A New York State judge has ruled in favor of two investors who accuse famed money manager Mario Gabelli with enriching himself at their expense, according to a Reuters report in today’s New York Times.

In a lawsuit filed more than two years ago, plaintiffs Frederick Mancheski, a former auto parts executive, and David Perlmutter, a lawyer who worked for Gabelli in the past, demand the dissolution of Gabelli Group Capital Partners Inc., a Gabelli-controlled company. The plaintiffs would also like to sell their stake in GGCP, as the company is formally called, and were seeking a statement that says their shares can freely be traded and are not in fact restricted, as the company claims.

New York Supreme Court Judge Linda Jamieson said in a decision granting summary judgment to the plaintiffs on Thursday that none of the their shares in Gabelli are ``subject to the restriction specifically claimed by the defendant.’’ Click the following link for the full story in nytimes.com.

Tuesday, March 28, 2006

New York Lawmakers cannot agree on False Medicaid Claims

Eight months after promising action against Medicaid fraud, New York lawmakers are deadlocked on details of the proposed law. A story in today’s New York Times describes the impasse, and the possible route to passing the legislation.

According to the Times, Democrats and Republicans cannot agree on two pivotal issues: whether to allow individuals to file whistle-blower lawsuits over abuses, and whether the state’s next governor will get to choose the chief Medicaid enforcement official.

Attorney General Eliot Spitzer and the Democrats who control the Assembly insist that whistle-blower suits would bring many more fraud cases to light. That view is supported by officials from both parties in states that have laws authorizing such suits, and in Congress, which has urged all states to adopt them.

The Republicans who run the State Senate do not want to allow the suits, saying that the Assembly’s proposal would lead to a flood of litigation brought by prospecting lawyers, whom they likened to bounty hunters, and could actually cost the state money.

Click the following link to read the full Times account on the false claims legislation.

Insight Public Sector agrees to pay U.S. $1 Million to settle False Claims Allegations

Insight Public Sector, Inc., a company providing technology products and services to federal agencies, has agreed to pay the U.S. $1 million to settle charges that it falsely certified itself as a “small business” on its application for inclusion on the General Services Administration’s Multiple Award Schedule (MAS).

The settlement arises out of a complaint made to the Small Business Administration (SBA) that a company Insight purchased, Comark Government & Education Services (CGES) obtained a preference in regard to the award of certain purchase orders under the MAS by falsely certifying that it was a small business. The SBA’s Office of Inspector General, along with other agencies, concluded after a 2-year investigation that CGES had misrepresented its size status on its 1996 application for inclusion on the MAS.

Click on the following link to read a PR Newswire account of the false claims settlement.

Monday, March 20, 2006

Whistleblower may be aiding Investigation into Alleged Illegal Drug Promotion

The Seattle Times is reporting that a whistleblower may be aiding a government investigation into whether Cell Therapeutics, a Seattle pharmaceutical company, unlawfully promoted a drug for unapproved uses. In its annual report filed with the Securities and Exchange Commission last Thursday, Cell Therapeutics disclosed that a “private party” has made claims against it “under seal on behalf of the government,” according to the Seattle Times.

The federal False Claims Act enables private citizens to bring charges against private companies who have allegedly defrauded the government, and to claim part of any award against the company for their effort. Click the following link to read the story about the false claims investigation.

Enron Whistleblower says She tried to warn Bosses of Irregularities

The Los Angeles Times featured a story last week recounting the testimony of Enron whistleblower Sherron S. Watkins, a former vice president of the company. Watkins was the author of a now-famous memo to then-Enron Chief Executive Kenneth L. Lay warning that the company could “implode in a wave of accounting scandals.”

Watkins testified in the conspiracy and fraud trial of Lay and other Enron executives in Houston last week. Click on the following link for Enron whistleblower story.

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