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23Jun/100

Foot Dragging on the Gulf Spill

It remains to be seen whether the Gulf oil spill will become Obama's Katrina. A recent New York Times/CBS News poll indicates that at the very least, some people believe that Obama is not doing enough to fix things in the Gulf. The poll found that 59% of respondents do not believe that the President has a clear plan for cleaning up the spill. In addition, the majority of respondents believe that more regulation of offshore drilling is needed. Interestingly, at the same time, the majority of those polled also indicated that they believed that the accident was a result of a failure on the part of the federal government to enforce regulations rather than inadequate regulation.

Criticism continues to be heaped on the federal agency responsible for ''regulating'' off-shore drilling, the Minerals Management Service (MMS), and rightly so. A new report, also in the New York Times, finds yet another maddening instance of MMS' appalling failure to fulfill its mandate. A device known as a blind shear ram was in place at the Deepwater Horizon well, and was supposed to be the last line of defense in preventing a blow-out. Of course, it failed. What is particularly infuriating is that MMS ignored its own experts as to how the risk of blind shear ram failure could be minimized.

There have been some major changes at MMS, so hopefully it won't be business as usual once the country forgets about off-shore drilling again. The new director of MMS is Michael R. Bromwich, who used to be an inspector general over at DOJ (the same guys will intervene in your qui tam case, if you're lucky!). The new agency will have a quick-response, SWAT team-like unit that will supposedly be able to respond with alacrity to allegations of crooked officials or misbehaving companies. The new investigative unit will have its work cut out for it. The old MMS could not be described by any stretch of the imagination as ''ethical.'' Doing crystal meth and then going out to do inspections? Why not? Going huntin' and fishin with on the oil company's dime? Yup. Inspecting drilling platforms of the oil company with which you're simultaneously negotiating for a job? Why the heck not? (Don't forget the crystal meth!).

This is all to say that the level of corruption in this agency is absurdly hilarious, and it will likely be very difficult both to root it out and prevent it from re-occurring, fungus-like, in the future.

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Tagged as: government, Mining, Natural resources, qui tam No Comments

10Jun/100

A New Flavor: Ambulance Fraud

There is fraud at all stages of the health care delivery process, and as a settlement in a district court case in the Eastern District of New York emphasizes, even ambulance companies are trying to get a bigger piece of that Federal pie, courtesy of you the taxpayer.

The case is

United States ex rel. Kaplan v. Metropolitan Ambulance & First-Aid Corp. et al., Civil Action No. 00-3010 (E.D.N.Y.).

According to allegations in a qui tam suit by the former CFO of one of the companies, Metropolitan Ambulance & First Aid Corp. (now known as SEZ Metro Corp.), Metro North Ambulance Corp. (now known as SEZ North Corp.) and Big Apple Ambulance Service Inc. (formerly known as United Ambulance), and the president of the companies, Steve Zakheim, used falsified records to appeal a Medicare refund demand. The situation is a bit convoluted, but what the companies were doing essentially consisted of the old health-care fraud standby: taking patients on unnecessary and expensive ambulance trips, and billing Medicare for the services. The government determined that these trips were in fact unnecessary and demanded a refund of the tens of millions of (tax payer) dollars that had been paid out. As is customary, an extensive appeals process was available.

However, Zakheim and his ambulance armada apparently didn't have the required proof to back-up their case on appeal, so they allegedly doubled their fun/fraud by submitting hundreds of forged letters verifying that the ambulance trips were medically necessary! The ROI was not so good here: Zakheim and the companies must pay $2.5 million in settlement money, not to mention the millions of dollars to be refunded. Vigilant whistleblower Larry Kaplan will pocket $618,450.

One has to ask: was it really worth it to engage in the fraud in the first place? This is yet another case in which the business logic behind some of the decisions seems to have been seriously lacking. The next time you see an ambulance speeding along (possibly with a bunch of cash flying out the windows) keep in mind that it might be following the road to fraud!

Tagged as: False Claims Act, FCA, fraud, government, health care, hospital, medicare, whistleblower No Comments

8Jun/100

Stapler Fraud = Stealth Fighter Jet Fraud

Sure, office supplies aren't nearly as sexy or controversial as Lockheed Martin's F-22 Raptor Stealth fighter. Who hasn't dreamed of being in the cockpit of a F-22 when our boss is trying to take away our stapler? Unfortunately office supply companies are not immune to the temptations of defrauding the government. The Florida Attorney General recently announced that Office Depot has entered into a $4.5 million agreement to settle allegations that the office supply behemoth overcharged Florida governmental agencies and consumers in violation of the Florida Deceptive and Unfair Practices Act. The settlement will be paid in the form of refunds to both the State of Florida as well as customers.

According to the Florida AG's office, here is the activity in which Office Depot engaged, prompting the investigation:

Bait and switch overcharging of state and local agencies by setting low fixed price for core items and then publishing catalog and website information that leads purchasing agents from low cost items to much higher priced alternative items.

Just as we rely on our defense contractors to provide the F-22s our tax dollars pay for, so de we rely on office supply companies to provide the staplers we contract for at the agreed price. It takes the efforts of both law enforcement as well as citizens to hold fraudsters accountable. For example, a former Lockheed employee filed a lawsuit against his former employer alleging that it knowingly used defective materials in constructing the F-22's skin.

The point of all this is that fraud can occur whether you're talking the mundane (staplers) or the extraordinary (radar-evading jets). Fraud is fraud!