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19May/100

Pharma Whistleblowers Under Stress

This post was written by Josh

New findings from a New England Journal of Medicine (NEJM) study entitled “Whistle-blowers' experiences in fraud litigation against pharmaceutical companies” confirm what most whistleblowers already know: whistleblowers who report health care fraud experience substantial stress and receive little support. This appears to be in line with other recently released studies which confirm that, in the words of Rodney Dangerfield, the majority of whistleblowers "just don't get no respect."

The NEJM study examined the experiences of 42 pharmaceutical whistleblowers, and an interesting profile of the whistleblowers emerged. All but six of the relators in the study did not specifically intend to use the qui tam mechanism when they decided to seek legal redress for the frauds they observed. Rather than being motivated by collecting a monetary reward, the main motivations of the whistleblowers were integrity, altruism or public safety, justice, and self-preservation.

The whistleblowers shared certain common experiences in bringing frauds to light. Most of the whistleblowers became active participants in the investigation, such as by wearing a wire. The whistleblowers also reported spending inordinate amounts of time working on the investigation, sometimes meeting with FBI agents in risky locations or being forced to devise hasty covers for agents visiting the whistleblower's workplace on short notice. Many relators were frustrated with the government at various points during the investigation.

Another common theme among the relators was the personal toll of becoming a whistleblower. Most of the whistleblowers reported experiencing financial difficulties. Some experienced divorce or other family problems. In addition, whistleblowing took a physical toll, with several whistleblowers reporting health problems ranging from asthma to migraines.

When it was all over, most of the relators felt that what they did was important for ethical or psychological reasons, despite dissatisfaction with the financial reward. Notably, the advice offered to potential whistleblowers by some of these seasoned, war-weary whistleblowers? Hire an experienced attorney!

This article was sponsored by The Qui Tam Team, 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: corporate fraud, drugs, False Claims Act, fraud, government, how to, Pharmaceutical, qui tam, whistleblower No Comments

4May/100

False Patent Claims: An Interesting Qui Tam Wrinkle

This post was written by Josh

A new frontier appears to be opening up for qui tam: suits for filing false patent marks.

The relevant section of the law pertaining to patents (35 U.S.C 292) states:

(a) Whoever, without the consent of the patentee, marks upon, or affixes to, or uses in advertising in connection with anything made, used, offered for sale, or sold by such person within the United States, or imported by the person into the United States, the name or any imitation of the name of the patentee, the patent number, or the words "patent," "patentee," or the like, with the intent of counterfeiting or imitating the mark of the patentee, or of deceiving the public and inducing them to believe that the thing was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee; or Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article the word "patent" or any word or number importing the same is patented, for the purpose of deceiving the public; or Whoever marks upon, or affixes to, or uses in advertising in connection with any article the words "patent applied for," "patent pending," or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public - Shall be fined not more than $500 for every such offense.

(b) Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.

Note that the law provides for qui tam suits in subsection (b), with a hefty 50% of the recovery going to the relator.

False marking "includes marking unpatented product as “patented” or marking a product as 'patent pending' when no patent is pending." The tricky issues arise when manufacturers lose track of patents or continue to manufacture products bearing a patent number that has long expired.

In the now-famous/infamous case Pequignot v. Solo Cup Co., the plaintiff, Matthew Pequignot, alleged that Solo Cup falsely marked certain products with expired patent numbers and improperly marked others with conditional patent markings. Notably, Pequignot is a patent attorney, so presumably knows more about this area of the law than the average bear. Also, the case involves about 21 billion lids, each of which could potentially constitute an "offense" under the aforementioned law and carrying a $500 fine.

Solo tried to get the case dismissed on several grounds, including an argument that Pequignot lacked standing as a qui tam relator. The federal district court, however, wasn't buying, and denied Solo's Motion to Dismiss. In regard to Solo's arguments that suits like Pequignot's were not what Congress had in mind when it made qui tam suits available in false marking suits, the court noted that Congress had the opportunity to change the law, but may have decided that the benefits of allowing citizens to blow the whistle on falsely marked products outweighed the burdens.

It will be very interesting to see how the Pequignot case turns out. Given that we as a society consume so many patented products, the stakes are extremely high.

Tagged as: False Claims Act, fraud, government, qui tam, whistleblower No Comments

10Apr/100

Qui Tam in the Mines

This post was written by Josh

As far as we know, they aren't sending kids into the mines like they used to do in the heady days of 1908, when you had to start working basically as soon as you could walk. That doesn't mean that mining is any less dangerous today, however. Every year, there seems to be some type of mishap, usually involving fire, poisonous gas, being trapped hundreds of feet underground, or some combination thereof. What gets less attention, however, are the qui tam cases related to coal mining and other types of resource extraction.

Although it doesn't necessarily tug at the heartstrings the way stories of trapped miners do, fraud by by companies extracting coal and other natural resources from federal and Indian lands costs taxpayers millions of dollars in lost royalties. The typical situation is one in which a resource extractor removes more of a resource than it discloses to the government by falsifying records.

According to testimony given by Acting Inspector General for the Department of the Interior Mary L. Kendall before Congress regarding bill H.R. 3534, nearly $700 million has been recovered from 25 companies, much of it through qui tam cases. H.R. 3534, the Consolidated Land, Energy, and Aquatic Resources Act, is a bill that would "provide greater efficiencies, transparency, returns, and accountability in the administration of Federal mineral and energy resources by consolidating administration of various Federal energy minerals management and leasing programs into one entity to be known as the Office of Federal Energy and Minerals Leasing of the Department of the Interior."

A perfect example of a False Claims Act violation by a resource extractor met its apex in December 2009, when Chevron agreed to pay $45 million to the United States to resolve claims that it knowingly underpaid royalties for natural gas extracted from federal and Indian land. As one of the assistant attorneys general involved in the case observed, royalties are an important source of income for Native Americans, the federal government, and various states. When companies underpay royalties, they usually end up cheating everyone to some degree. It's important for whistleblowers to help ensure that resource extractors don't take advantage of the complex nature of their business. As the demand increases for certain natural resources, such as natural gas, there are sure to be more opportunities for fraud.