The Qui Tam Blog

In a qui tam complaint unsealed last week, whistleblowers Curtis Lockey and Craig MacKenzie alleged that the City of Dallas, Texas failed to affirmatively further fair housing as it was obligated to do when it accepted funding from the U.S. Department of Housing and Urban Development (“HUD”).

Lockey and MacKenzie claimed that the City of Dallas requested and received millions of dollars from HUD in community development block grants and public housing assistance grants that the city was not qualified for because it was out of compliance with its obligations to affirmatively further fair housing. The complaint alleged specifically that the City of Dallas was obligated to analyze impediments to fair housing choice, take action to overcome the effects of any such impediments, and maintain records of such analyses and actions.

Two whistleblowers, Victor Bibby and Brian Donnelly, brought suit against thirteen lenders on behalf of the United States in connection with fraudulent Department of Veterans Affairs (VA) home mortgage loans.  The suit alleges that the lenders charged borrowers unallowable fees that technically invalidated the VA guarantee.

Certain fees–otherwise typical of a real estate transaction–such as attorney’s fees or settlement closing fees are not allowed in closing a VA loan for purposes of refinancing. The lenders allegedly charged these fees but hid them from borrowers and the VA by disguising them as allowable fees, sometimes bundling them with permitted fees.

The suit is pending in the Northern District of Georgia.

The owner of Memorial Medical Supply, Sunny Robinson, was sentenced on August 30, 2011 to over 8 years in federal prison after a 5-day jury trial for alleged health care fraud and anti-kickback violations.  Robinson used names and Medicare numbers of doctors and beneficiaries to falsify  medical records on false and fraudulent claims in excess of $4.3 million to both Medicare and Medicaid. He illegally obtained protected health information including names, birth dates, medical histories, and Medicare and Social Security numbers from individuals and home health agencies.  The information was used to submit false and fraudulent claims for “Arthritis Kits,” power wheelchairs, diabetic supplies, and incontinence supplies.  In many instances, the beneficiaries did not need or order the medical equipment nor did a doctor prescribe the equipment. Claims also were submitted for medical equipment that was not provided. Memorial Medical Supply even submitted claims for reimbursement to Medicare for equipment supposedly delivered to deceased beneficiaries.

Three co-defendants, Manuel DeLuna, Lisa Jones, and Shirley Chavis, also were sentenced for their roles in the fraudulent scheme.

The United States District Court for the Eastern District of New York held that the Government did not violate the “no-contact” rule in connection with an investigation of Amgen, Inc., a biotechnology company.  Since 2006, the United States District Attorney for the Eastern District of New York has been investigating allegations that the company violated the False Claims Act and other federal statutes.  Amgen alleged that the Government violated New York professional responsibility rules when it contacted Amgen employees directly instead of through counsel.

New York Rule of Professional Conduct 4.2(a) generally prohibits an attorney from communicating with a party to a particular matter when the attorney knows the party to be represented by another attorney in the same matter. The court held that, because the Government had not intervened in the qui tam lawsuits against Amgen, it was not a “party” to the matter, and thus Rule 4.2(a) did not apply.  The court further held that Amgen was not a “party” to the grand jury investigation; therefore, Rule 4.2(a) did not prohibit Government attorneys or investigators from communicating directly with Amgen employees in connection with the investigation.

The public disclosure bar generally precludes qui tam relators from bringing actions based upon publicly disclosed information unless the relator is an original source of the information. Before the passage in 2010 of the Patient Protection and Affordable Care Act (“Affordable Care Act”), the False Claims Act (“FCA”) specifically prohibited private suits “based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media.” In Schindler Elevator Corporation v. United States ex rel. Kirk, the Supreme Court held that a federal agency’s written response to a Freedom of Information Act (“FOIA”) request constitutes a “report” within the meaning of the FCA’s public disclosure bar.

Relator Daniel Kirk, a Vietnam veteran, was employed by Schindler Elevator Corporation (“Schindler”) from 1978 until 2003. He filed an action against Schindler in 2005, alleging that Schindler had submitted false claims for payment under its Government contracts because the company had falsely certified compliance with the Vietnam Era Veterans’ Readjustment Assistance Act of 1972. Kirk supported his allegations with information his wife had received from the Department of Labor (“DOL”) in response to three FOIA requests.

The Supreme Court held that the DOL’s written responses to the FOIA requests were “reports” within the meaning of the FCA’s public disclosure bar. (Note: The Supreme Court considered the version of the public disclosure bar in existence at the time Kirk’s suit was filed, prior to amendment by the Affordable Care Act.) It remanded the case to the United States Court of Appeals for the Second Circuit to determine whether Kirk’s suit was “based upon . . . allegations or transactions” disclosed in those reports.

Last month, ABC News consulted attorney Joel Androphy on the costs that Toyota will be facing, following the significant number of car malfunctions that have left Toyota drivers injured, scared and distraught. See what he has to say in this article about a legal case involving an injured Toyota driver who experienced sudden acceleration and accident.

Local family files lawsuit against Toyota
…”Toyota is going to have to set aside billions and billions of dollars in order to compensate consumers, not only from just traffic accidents but everything from the value of the car to fender benders to people’s emotional damages,” said KTRK Legal Analyst Joel Androphy. Read More