Wednesday, February 28, 2007

Nevada FedEx Drivers Join in False Claims Suit

Ground/Home Delivery drivers in Nevada are becoming part of the nationwide, class-action lawsuit against FedEx. The suit alleges that for years it has intentionally misclassified its employees as independent contractors in a scheme allowing it to substantially reduce operating costs while boosting corporate profits at the expense of its drivers and the taxpaying public, according to a release on PRNewswire-USNewswire.

The suit, which includes a count alleging violations of Nevada’s False Claims Act provisions requiring accurate tax returns, is projected by FedEx as calling for more than $5 million in various reimbursements.

FedEx has had approximately 50 drivers at a time within Nevada, but with turnover the number in the Nevada class is projected by FedEx at over 200 persons. They are now among the thousands nationwide represented in more than 40 lawsuits filed in over 30 states challenging the company’s independent contractor model, says the PRNewswire release.

Nevada’s suit is the latest to be consolidated into the federal class-action suit being litigated in U.S. District Court in South Bend, Indiana. As in the other cases, the Nevada drivers are alleging that FedEx Ground/Home Delivery is in violation of applicable State and Federal laws.

Click here to read more about the FedEx drivers’ lawsuit.

Monday, February 26, 2007

Over-Billing Is Alleged in HealthEssentials Whistle-Blower Suit

The Justice Department plans to intervene in a whistle-blower lawsuit, claiming that HealthEssentials Solutions Inc. of Louisville, Kentucky systematically over-billed Medicare, according to The Courier-Journal. The lawsuit could be a forum for federal officials to try to prove that the now-defunct company owes it $120 million.

Although HealthEssentials has no significant assets, the Justice Department could seek to recover money from former officers or others connected with the company, said Assistant U.S. Attorney Ben Schecter. No criminal charges have been filed against anyone connected with HealthEssentials. Federal agents raided the company’s offices in 2004, and a criminal investigation is ongoing. The raid ended the company’s plans for a public stock offering. It filed bankruptcy in March 2005, says The Courier-Journal.

The whistle-blower lawsuit, pending in U.S. District Court in Louisville, began as three separate lawsuits filed by former HealthEssentials employees in 2003 and 2004. They were combined into one case last year.

Click here to learn more about the allegations in the whistle-blower suits.

Wednesday, February 21, 2007

U.S. Congress Probes Possible Drug Maker Pricing "Fraud"

A U.S. Congressional Committee is investigating claims of “waste, fraud and abuse in pharmaceutical pricing,” which allege that some drug manufacturers are profiteering from public health programs, according to PharmaTimes World News.

“If even half of the allegations involving the pharmaceutical industry are true, billions of federal dollars that should be buying needed care are instead adding to drug company profits,” said Democratic Representative Henry Waxman, chairman of the House Committee on Oversight and Government Reform, which has just held a hearing on the issue, reported the PharmaTimes.

The hearing was told that drug makers have been defrauding Medicaid, according to whistleblowers who have filed dozens of cases over the last decade, drug manufacturers have deliberately crafted business plans to avoid giving Medicaid the proper discounts,” said Rep Waxman.

Click here to learn more about the Congressional Committee’s aggressive oversight agenda.

Sunday, February 18, 2007

Clarifying Congressional Intent for Whistle Blowing

This week, advocates for whistle-blowers urged Congress to strengthen protections for federal employees who suffer reprisal in the workplace, according to the Washington Post. The advocates were greeted with bipartisan support at a hearing held by the House Oversight and Government Reform Committee.

The Washington Post quoted Henry A. Waxman (D-Calif.), the committee chairman: “Federal employees are on the inside. They see when taxpayer dollars are wasted. They are often the first to see the signals of corrupt or incompetent management. Yet without adequate protection, they cannot step forward to blow the whistle.”

Waxman said the committee’s bill would for the first time extend whistle-blower rights to those who work at the FBI and in intelligence agencies, and to people employed by federal contractors. The bill would also extend protection to passenger and baggage screeners at the Transportation Security Administration and to federal scientists who report political interference with their work, he said.

The Washington Post also said that Thomas M. Davis III (R-Va.), the ranking minority member on the committee, said the bill would clarify congressional intent as to what type of whistle-blowing is protected.

Click here to learn more about strengthening whistle-blower protections.

Saturday, February 17, 2007

Whistle-blower Lawsuit Settled in Alabama

Yesterday the Madison County Commission approved an out-of-court settlement of a federal whistle-blower lawsuit. Five of the six commissioners voted to pay $53,750 as the county’s part of a $110,000 settlement to end litigation that stemmed from the defunct Working Connection welfare-to-work program, according to Alabama’s Huntsville Times.

The program was designed to help find jobs for parents who didn’t have custody of their children, to help those parents pay child support.  The county used about $2.2 million of the grant but forfeited the remaining $2.5 million when the program closed in July 2002. The Labor Department determined that the program was being mismanaged and that not enough people were receiving help.

Tommie Lockhart of Huntsville, executive director of the program from December 1999 to August 2000, who sued in October 2001 under the federal False Claims Act, will receive 30 percent of the settlement. The government will receive a 70 percent share after payment of $45,000 to Lockhart’s attorney, Kerri Riley, for legal fees.  This settlement could save more than $1.3 million in taxpayers’ money, says the Huntsville Times.

Click on this link to read more about the verdict over the defunct jobs program.

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