Galena Biopharma Inc. to Pay More Than $7.55 Million to Resolve Alleged False Claims Related to Opioid Drug

Friday, September 8, 2017

Galena Biopharma Inc. (Galena) will pay more than $7.55 million to resolve allegations under the civil False Claims Act that it paid kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral, the Department of Justice announced today.

“Given the dangers associated with opioids such as Abstral, it is imperative that prescriptions be based on a patient’s medical need rather than a doctor’s financial interests,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice intends to vigorously pursue those who offer and receive illegal inducements that undermine the integrity of government health care programs.”

The conduct alleged by the government and resolved by today’s settlement was egregious because it incentivized doctors to over-prescribe highly addictive opioids,” said Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey. “This settlement constitutes another example of the Department of Justice’s ongoing efforts to battle the opioid epidemic on every front.

The United States contends that Galena paid multiple types of kickbacks to induce doctors to prescribe Abstral, including providing more than 85 free meals to doctors and staff from a single, high-prescribing practice; paying doctors $5,000, and speakers $6,000, plus expenses, to attend an “advisory board” that was partly planned, and attended, by Galena sales team members and paying approximately $92,000 to a physician-owned pharmacy under a performance-based rebate agreement to induce the owners to prescribe Abstral. The United States also contends that Galena paid doctors to refer patients to the company’s RELIEF patient registry study, which was nominally designed to collect data on patient experiences with Abstral, but acted as a means to induce the doctors to prescribe Abstral. Galena has not marketed any pharmaceutical drug since the end of 2015.

Two of the doctors who received remuneration from Galena were tried, convicted and later sentenced to prison in the U.S. District Court for the Southern District of Alabama following a jury trial of, among other counts, offenses relating to their prescriptions of Abstral. Galena cooperated in that prosecution.

The settlement resolves a lawsuit filed by relator Lynne Dougherty under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. As part of today’s resolution, Ms. Dougherty will receive more than $1.2 million. The matter remains under seal as to allegations against entities other than Galena.

The settlement is the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of New Jersey, with assistance from the Department of Health and Human Services Office of Counsel to the Inspector General, and the Food and Drug Administration Office of Criminal Investigations’ Metro Washington Field Office.

The claims settled by this agreement are allegations only; there have been no admissions of liability by Galena.

Hospice Company To Pay $2 Million To Resolve Alleged False Claims Related To Unnecessary Hospice Care

Thursday, July 6, 2017

NEWARK, N.J. – A hospice company in Bensalem, Pennsylvania, has agreed to pay to the United States $2 million to resolve allegations that it provided unnecessary hospice services, Acting U.S. Attorney William E. Fitzpatrick announced today.

Compassionate Care of Gwynedd Inc. is a hospice provider based in Bensalem and a subsidiary of Compassionate Care Hospice Group Inc., a Florida corporation with its principal place of business in Parsippany, New Jersey. The settlement announced today follows an investigation by the U.S. Attorney’s Office for the District of New Jersey and the Commercial Litigation Branch of the Justice Department’s Civil Division. The allegations arose from a whistle-blower suit filed under the False Claims Act.

The United States alleges that from Jan. 1, 2005, through Nov. 15, 2011, Compassionate Care of Gwynedd admitted patients who did not need hospice care and billed Medicare for these medically unnecessary services. The government alleges that the company admitted these patients by using a diagnosis of “debility” that was not medically justified.

The relators, or whistler-blowers, in the underlying qui tam will receive more than $350,000 as their statutory share of the recovery under the False Claims Act. The civil lawsuit was filed in the District of New Jersey and is captioned United States, et al., ex rel. Jane Doe and Mary Roe v. Compassionate Care Hospice, et al.

Acting U.S. Attorney Fitzpatrick credited special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to the settlement.

The government is represented by Assistant U.S. Attorney Charles Graybow of the Health Care and Government Fraud Unit of the U.S. Attorney’s Office for the District of New Jersey and Trial Attorney Justin Draycott of the Department of Justice’s Civil Division. The Office of Inspector General and the Office of the General Counsel for the Centers for Medicare and Medicaid Services of the Department of Health and Human Services also participated in the investigation and settlement.

The U.S. Attorney’s Office for the District of New Jersey reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.36 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.

The claims settled by this agreement are allegations only; there have been no admissions of liability.

Counsel for relators: Britton D. Monts Esq., Austin, Texas; Timothy J. McInnis Esq., New York

Counsel for defendant: Sean C. Cenawood Esq., New York

Cardiac Monitoring Companies and Executive Agree to Pay $13.45 Million to Resolve False Claims Act Allegations

Monday, June 26, 2017

AMI Monitoring Inc. aka Spectocor, its owner, Joseph Bogdan, Medi-Lynx Cardiac Monitoring LLC, and Medicalgorithmics SA, the current majority owner of Medi-Lynx Cardiac Monitoring LLC, have agreed to resolve allegations that they violated the False Claims Act by billing Medicare for higher and more expensive levels of cardiac monitoring services than requested by the ordering physicians, the Department of Justice announced today. Spectocor and Bogdan have agreed to pay $10.56 million, and Medi-Lynx and Medicalgorithmics have agreed to pay $2.89 million.

“Independent diagnostic testing facilities that improperly steer physicians to order higher levels of service will be held accountable,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will vigilantly ensure the appropriate use of our country’s limited Medicare funds.”

From 2011 through 2016, Spectocor, headquartered in McKinney, Texas, and Joseph Bogdan, allegedly marketed the Pocket ECG as capable of performing three separate types of cardiac monitoring services—holter, event, and telemetry. When a physician sought to enroll a patient for Pocket ECG, however, the enrollment process allegedly only allowed the physician to enroll in Pocket ECG for the service which provided the highest rate of reimbursement provided by a patient’s insurance, thus steering the ordering physician to a more costly level of service. In 2013, Medi-Lynx, a related company headquartered in Plano, Texas, began selling the Pocket ECG and allegedly adopted this same enrollment procedure. Medicalgorithmics SA, a limited liability company based in Warsaw, Poland, acquired a controlling interest in Medi-Lynx in September 2016.

“Sophisticated medical technology can be used to help doctors dramatically improve the lives of their patients, but it can also be misused to fraudulently increase medical bills,” said Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey. “Today’s settlement demonstrates that the federal government is committed to preserving the integrity of the Medicare system and ensuring that Medicare funds are spent only for patient care.”

“Billing for unneeded services, as the government alleged, takes unfair advantage of Medicare patients and steals from taxpayers,” said Special Agent in Charge Scott J. Lampert for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “OIG, along with our law enforcement partners, will aggressively investigate these crimes.”

The settlements resolve allegations filed in a lawsuit by Eben Steele, a former sales manager at Spectocor. The lawsuit was filed in a federal court in Newark, New Jersey, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Mr. Steele will receive approximately $2.4 million from the two settlements.

The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 900-HHS-TIPS (800-447-8477).

The settlements were the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of New Jersey and the HHS-OIG.

The case is captioned United States ex rel. John Doe v. Spectocor Enterprise Services, LLC, et al., Case No. 14-1387 (KSH) (D. N.J.). The claims resolved by the settlements are allegations only and there has been no determination of liability.

Doctor And Son Admit Defrauding Medicare, Agree To $1.78 Million Settlement

 

Tuesday, June 13, 2017

CAMDEN, N.J. – A doctor and his chiropractor son today admitted conspiring to defraud Medicare by using unqualified people to give physical therapy to Medicare recipients, Acting U.S. Attorney William E. Fitzpatrick announced.

Robert Claude McGrath D.O., 65, and his son Robert Christopher McGrath, 47, both of Cherry Hill, New Jersey, each pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to separate informations charging them each with conspiracy to commit health care fraud.

The McGraths, together with their practice, the Atlantic Spine & Joint Institute, have also agreed to pay $1.78 million as part of a civil settlement to resolve allegations that they illegally billed Medicare for those treatments.

“Elderly patients who need physical therapy deserve properly licensed and supervised caregivers,” Acting U.S. Attorney Fitzpatrick said. “Instead, the McGraths for years used unqualified and unsupervised employees to treat their patients, all while fraudulently billing Medicare for the phony services.”

“Patients undergoing physical therapy at the McGraths’ practice sought simply to feel and move better,” said Michael Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “It seems all the defendants sought was to enrich themselves at those patients’ – and U.S. taxpayers’ – expense. Medicare fraud deals a big blow to a critical piece of our health care system. Every dollar lost to bogus billing is a dollar less to use for legitimate treatments and services.”

According to documents filed in this case and statements made in court:
The McGraths owned and operated Atlantic Spine & Joint Institute, a medical practice with offices in Westmont, New Jersey, and Wayne, Pennsylvania. Under Medicare rules, physical therapy had to be provided by Robert Claude McGrath or by a trained physical therapist under his supervision. However, from January 2011 through April 2016, the McGraths sought to defraud Medicare by employing unlicensed, untrained persons to give physical therapy to Medicare patients, at times when Robert Claude McGrath was not even in the office to supervise. They then submitted bills to Medicare fraudulently identifying Robert Claude McGrath as the provider of physical therapy.
The defendants each face a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for Sept. 19, 2017.

“These criminals face serving time in prison as well as paying out a $1.78 million settlement,” said Scott J. Lampert, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Additionally, my agency reserves the right to exclude both father and son from Medicare, Medicaid, and other federal health programs.”

“People trust medical professionals to treat them and not cheat them,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations’ Metro Washington Field Office. “Our office will continue to work with our federal law enforcement partners to pursue and bring to justice those who would exploit this vulnerable population.”

In the related civil settlement, also announced today, the McGraths and Atlantic Spine agreed to pay $1.78 million plus interest to the federal government to resolve allegations that the fraudulent bills submitted under the McGraths’ scheme caused false claims to be submitted to Medicare in violation of the False Claims Act.
The civil settlement resolves certain claims filed by Linda Stevens, a former billing manager at Atlantic Spine, in the District of New Jersey, under the federal False Claims Act. The federal False Claims Act contains a qui tam, or whistleblower, provision that permits whistleblowers to file suit on behalf of the United States for false claims against the government, and to share in any recovery. Ms. Stevens will receive approximately $338,200 from the settlement proceeds, along with her attorney’s fees.

Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Harpster in Philadelphia, special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Lampert, and special agents from the Food and Drug Administration, Office of Criminal Investigations, under the direction of Special Agent in Charge McCormack, with the investigation.

Assistant U.S. Attorneys R. David Walk Jr. and Andrew A. Caffrey III of the U.S. Attorney’s Office Health Care and Government Fraud Unit represented the government in the criminal case and the civil case, respectively.

The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-along Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.33 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.

Defense counsel:
Robert Christopher McGrath and Atlantic Spine & Joint Institute: Riza I. Dagli Esq., Roseland, New Jersey.
Robert Claude McGrath: Perry Primavera Esq., Hackensack, New Jersey
Counsel for Relator Linda Stevens: Brian J. McCormick Jr., Philadelphia

 

New Jersey Plastic Surgeon Sentenced To Prison For Evading Taxes

Department of Justice
U.S. Attorney’s Office
District of New Jersey

FOR IMMEDIATE RELEASE
Thursday, February 16, 2017

Morris County, New Jersey, Plastic Surgeon Sentenced To Three Years In Prison For Evading Taxes On More Than $5 Million In Income

NEWARK, N.J. – A plastic surgeon with a practice in Basking Ridge, New Jersey, was sentenced today to 36 months in prison for fraudulently diverting millions in corporate earnings for his personal use, costing the United States nearly $3 million in tax revenue between 2006 and 2010, U.S Attorney Paul Fishman announced.

David Evdokimow, 56, of Harding Township, New Jersey, was previously convicted of all eight counts of a superseding indictment charging him with one count of conspiring to defraud the United States, four counts of personal income tax evasion and three counts of corporate tax evasion. He was convicted following three-week trial before U.S. District Judge Noel L. Hillman, who imposed the sentence today in Camden federal court.

According to the superseding indictment and evidence at trial:

Evdokimow ran his medical practice through a corporation called De’Omilia Plastic Surgery P.C. (De’Omilia). He conspired with others to conceal millions of dollars of taxable income from the IRS by forming shell corporations and then having trusted associates open bank accounts for those corporations. Evdokimow then convinced these associates to give him their signatures or signature stamps so that he had full access to the shell company bank accounts while at the same time being able to conceal his connection to those accounts. He and the other conspirators then funneled millions of dollars in De’Omilia income into the bank accounts of the shell corporations and falsely claimed that these transfers were legitimate business expenses. Evdokimow also used bank accounts in the name of De’Omilia to pay his personal expenses, and falsely claimed those were business expenses too.

Evdokimow used the shell corporation and De’Omilia bank accounts to pay for more than $5.8 million in personal expenses, including designer apparel, jewelry, vacations, artwork, and multiple residences, all of which he falsely claimed as business expenses.

Evdokimow also opened accounts at several banks in order to cash checks received directly from patients for professional medical services. Between 2009 and 2011, Evdokimow cashed more than $360,000 in checks from patients, which he failed to report on his federal income tax returns.

Evdokimow was convicted of concealing more than $5.8 million in income from tax years 2006 to 2010. By concealing this income, Evdokimow evaded paying almost $3 million in taxes during that period.

In addition to the prison term, Judge Hillman sentenced Evdokimow to one year of supervised release and fined $96,000. He previously paid the taxes owed.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Paul Murphy and Justin Herring of the U.S. Attorney’s Office Criminal Division in Newark.

Latest GrantFraud.Com post involves a $200 million credit card fraud scheme

Bradford L. Geyer is reading enforcement agency tea leaves and he is seeing signs of enhanced enforcement involving grant fraud and procurement fraud at grantfraud.com.  His latest note regarding an extensive credit card fraud scheme can be found here.

ISRI gauging impact of coin buyback suspension

The American Metal Market Daily is the online resource for metals industry news and proprietary pricing information covering the steel, non-ferrous and scrap markets. Since its first print issue published in 1882, AMM has been the trusted name in metals industry information.  This is what AMM has learned about growing concerns reporrted by members of and recent actions taken by the Institute of Scrap Recycling Industries, Inc. (ISRI)  on their behalf (click below to access the article):

“Collecting coins out of scrap metal is a decades-old practice—particularly since the shredder came into being, and more so since the advent of advanced metal processing technology,” he said. “If it is hurting our members as a result of pricing of zorba or through the inability to sell direct back to U.S. Mint, then obviously we need to step in.”

Chasing the Jackpot in America’s Cash Stream-AMM

The American Metal Market Daily attended the FormerFedsGroup.Com unsealing of 13 metric tons of Wealthy Max US clad coins in Hong Kong. American Metal Market is the online resource for metals industry news and proprietary pricing information covering the steel, non-ferrous and scrap markets. Since its first print issue published in 1882, AMM has been the trusted name in metals industry information.  This is what AMM has learned about the scrap industry and the coin redemption industry in what is a fascinating read.

Cash and Carry: The US Mint vs. Wealthy Max
Chasing the Elusive Jackpot in America’s Cash Stream 

American Metals Market Report on Hong Kong Unsealing by FormerFedsGroup of 13 Metric Tons of Mutilated Clad Coins Processed by Wealthy Max

2015-05-29 11.34.57

The country’s oldest and most respected metals market trade publication, AMM, attended the Hong Kong unsealing of 13 metric tons of US clad coins on February 23rd that were processed in Foshan, China by the Wealthy Max quality assurance line in September, 2014, immediately following its processing of four shipments of mutilated clad coins that were seized by the government as being counterfeit.  Now, the US Attorney’s Office of the Eastern District of Pennsylvania, which played no role in creating this mess, has, sensibly, reasonably and in good faith, has started referring to the coins as not meeting Mint specifications rather than in the preposterous terms used by the US Attorney’s Office of New Jersey and the Department of Homeland Security who, preposterously, continue to allege counterfeiting in one of the most slipshod, ramshackle and careless investigations in recent memory.  Linked here is the carefully researched article.

Wealthy Max Arranges Events in Hong Kong to Fight Civil Forfeiture Case Challenges Members of Congress and Other Government Officials to See for Themselves if the Company is Guilty

Feb. 9, 2016PRLog — Washington, DC – Wealthy Max Limited (Wealthy Max), a claimant in a federal civil forfeiture case involving supposedly counterfeit coins, today announced that it had invited the members of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology as well as senior officials from the Departments of Treasury, Justice and Homeland Security, to attend a briefing and product audit in Hong Kong.  The event is being held as part of the Company’s fight against the civil forfeiture of $2.388 million owed to it by the U.S. Mint.  It will also demonstrate once and for all that Wealthy Max does not traffic in counterfeit U.S. coins.

On February 23rd there will be a briefing by Wealthy Max executives and a public unsealing of 13 metric tons of damaged U.S. coins that were destined to be shipped to the U.S. Mint until the civil fortitude caused a halt to operations.  The unsealing will be overseen by former U.S. FBI agents who are members of the FormerFedsGroup.com.

On February 24th Wealthy Max will organize a trip to Foshan, China, to visit metal recycling companies where the Company sources its coins.  Participants will see the hand-sorting process that yields damaged U.S. coins, as well as the growing stockpiles of coins that would have been returned to the U.S. Mint, but for this unjust civil forfeiture action.

“The members of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology have oversight responsibility for the U.S. Mint, and should have a keen interest in this case, as it reflects unprecedented executive branch over reach, which could impact perceptions of the government’s commitment to full faith and credit in our currency,” said Bradford L. Geyer, counsel for Wealthy Max.  “Going back to the founding documents of our country, the Secretary of the Mint, with Congressional oversight, has the sole responsibility for the minting of coins and sourcing materials to be used in those coins.  The actions of the U.S. Attorney’s Office and the Department of Homeland Security have effectively usurped this responsibility.”

“Wealthy Max has been a reliable supplier to the U.S. Mint for over a decade and we have successfully redeemed more than 160 shipments of coins in that time,” said Matthew Wong, director, Wealthy Max Limited. “We were shocked by the accusations against us, and the unjust seizure of our property by the U.S. government.  We have been treated like criminals who have no rights.  This is why we are demanding our property back, and more, we are demanding justice for ourselves and others who have been wronged by the U.S. authorities.  Before these officials accuse us of being criminals, they should come to Hong Kong to see for themselves our product and our supply chain.”

In addition to the members of congress and their staffs, and the other U.S. government officials who have been invited to this event, Wealthy Max has extended invitations to local and international media, and members of the American Chamber of Commerce in Hong Kong.