Mass Surveillance

Groups Urge U.S. Supreme Court 

to Hear Challenge to NSA's 

Mass Surveillance

     WASHINGTON, D.C. — (ACLU) - 8/26/2022 - The Wikimedia Foundation, the nonprofit that operates Wikipedia, petitioned the U.S. Supreme Court on Aug. 25 to review a challenge to the National Security Agency’s (NSA) mass surveillance of Americans’ private emails, internet messages, and web communications with people overseas, also known as its “Upstream” surveillance program. In its petition, Wikimedia asks the Court to reject the government’s sweeping claims of “state secrets” and allow the case to proceed, arguing that the wealth of public disclosures about Upstream surveillance means the program can and should be subject to constitutional review in the courts. The American Civil Liberties Union, the Knight First Amendment Institute at Columbia University, and the law firm Cooley LLP represent the Wikimedia Foundation in the litigation.

    “When people’s privacy is at risk, free knowledge is at risk,” said James Buatti, senior legal manager at the Wikimedia Foundation. “The NSA’s mass surveillance is a threat to the fundamental rights to privacy and free expression for the hundreds of millions of people worldwide who rely on Wikipedia and other Wikimedia projects for reliable information.” 

    Upstream surveillance is conducted under Section 702 of the Foreign Intelligence Surveillance Act (FISA), which permits the government to intercept Americans’ international communications without a warrant so long as it is targeting individuals located outside the U.S. for foreign intelligence purposes. Section 702 will expire in 2023 unless it is reauthorized by Congress.

    In the course of this surveillance, the NSA copies and combs through vast amounts of internet traffic, including private data showing what millions of people around the world are reading or writing online — whether they are accessing knowledge on Wikipedia and other Wikimedia projects, browsing the web, or communicating with family and friends. This government surveillance has had a measurable chilling effect on Wikipedia users, with research documenting a drop in traffic to Wikipedia articles on privacy-sensitive topics following public revelations about the NSA’s mass surveillance in 2013.

    “It is past time for the Supreme Court to rein in the government’s sweeping use of secrecy to evade accountability in the courts. Upstream surveillance is no secret, and the government’s own public disclosures are the proof,” said Patrick Toomey, deputy director of the ACLU’s National Security Project. “Every day, the NSA is siphoning Americans’ communications off the internet backbone and into its surveillance systems, violating privacy and chilling free expression. The courts can and should decide whether this warrantless digital dragnet complies with the Constitution.”

    In September 2021, a divided panel of the U.S. Court of Appeals for the Fourth Circuit held that even though the Wikimedia Foundation provided public evidence that its communications with Wikipedia users around the world are subject to Upstream surveillance, the government’s assertion of the “state secrets privilege” required dismissal of the entire case. The privilege allows the government to withhold information in legal proceedings if disclosure of that information would threaten national security. The government claimed it might have sensitive information that would — at least in theory — establish a defense to the lawsuit. Over the dissent of Judge Diana Gribbon Motz, a majority of the court held that this possibility was enough to end the litigation.

     Wikimedia’s petition argues that the Fourth Circuit was wrong to dismiss the lawsuit on the basis of the state secrets privilege and that the court should have, instead, excluded any secret evidence, but allowed the case to proceed.

    “For years, the NSA has vacuumed up Americans’ international communications under Upstream surveillance, and to date, not a single challenge to that surveillance has been allowed to go forward,” said Alex Abdo, litigation director of the Knight First Amendment Institute at Columbia University. “The Supreme Court should make clear that NSA surveillance is not beyond the reach of our public courts.”

    The Wikimedia Foundation, which filed the case alongside eight other plaintiffs, sued the NSA in 2015 to protect the rights of Wikipedia readers, editors, and internet users globally. The Supreme Court may consider the petition as early as October 2022.

    Wikimedia v. NSA is a part of the ACLU's Joan and Irwin Jacobs Supreme Court Docket. Lawyers representing the Wikimedia Foundation in the litigation include Patrick Toomey, Ashley Gorski, and Sarah Taitz for the American Civil Liberties Union, Alex Abdo and Jameel Jaffer for the Knight First Amendment Institute at Columbia University, and Ben Kleine, Aarti Reddy, and Maximilian Sladek de la Cal from the law firm Cooley LLP.

Medical Malpractice

Report: Medical Malpractice is Not

A 'Frivolous' Matter

Accusations of Lawsuit Abuse Fall Flat

By Steve Rensberry
RP News

--------------

    EDWARDSVILLE, Ill. - (RP NEWS) - 7/21/2021 - Nearly 10 percent of patients with symptoms caused by major vascular events, infections or cancers will be misdiagnosed in the United States, with more than half of those suffering death or permanent disability as a result. That's the conclusion of a 2020 study by John Hopkins University School of Medicine Director Professor David E. Newman-Toker, along with others involved with the analysis. (1)

    It's a sobering statistic, as are a long list of others involving medical malpractice cited in the latest report by the national consumer organization, Center for Justice and Democracy (CJ&D). See: Medical Malpractice Briefing Book.

    "Among the 15 diseases analyzed, spinal abscesses was the disease most often missed (62.1%). More than one-on-four aortic aneurysms and dissections have a critical delay in diagnosis (27.9%) and more than one in five (22.5%) lung cancer diagnoses are also meaningfully delayed," the John Hopkins study notes.

    Research by the Emergency Care Research Institute (ECRI) in 2020 points to similar results, concluding that "missed and delayed diagnosis" were a top patient safety concern. Diagnostic errors contributing to death were found in about 10 percent of autopsies, they said, leading to 40,000-80,000 deaths annually. Based on outpatient studies, approximately 1 in 20 adults experience a diagnostic error. (2)

More insights from the CJ&D's briefing book:

• Despite the Emergency Medical Treatment and Labor Act (EMTALA), which requires emergency departments to treat emergency patients regardless of ability to pay, hundreds of violations of the Act are seen each year. An analysis of 10 years of EMTALA violations (2008-2018), showed more than 4,300 violations involving 1,682 hospitals, roughly 1/3 of the nation's hospitals. (3)
  

• Approximately 1 in 12 errors involved women who were pregnant or in labor, while 1 in 7 involved people who were having a mental health crisis, including thoughts of suicide. "Yet experts say the raw numbers belie both the scope and severity of the problem they see. That's because enforcement of the law depends on someone filing a complaint. Although anyone can file a complaint, it's most often a doctor, nurse, or hospital administrator," the report notes.

•  A study by Professor Ziad Obermeyer of Harvard Medical School, et al, of early death after discharges from emergency departments, using U.S. insurance claims data, shows a significant number of deaths from people on Medicare soon after discharge. "In this national analysis, we found over 10,000 Medicare beneficiaries each year died within seven days after being discharged from emergency departments, despite mean age of 69 and no obvious life limiting illnesses," the report stated. (4)

•  A 2019 study by University of Michigan School of Public Health candidate Jun Li et al, looked at the amount of data available made available by the U.S. Centers for Medicare and Medicaid Services on 1 million U.S. doctors. Its conclusions: Three quarters of clinicians had no information about their quality of care, 99 percent had no data tied to individual job performance, and lax reporting requirements do not require that every outcome be considered, meaning clinicians may be selective in which cases to submit information on. (5)

• Diagnostic errors are the most common and costly errors, according to an 2020 analysis by Coverys Inc. of data from 2010-2019, with death and high-severity injury making up approximately 52 percent of events and 74 percent of indemnity paid; emergency department-related events accounts for 66 percent of indemnity paid.

    The bottom line, as stated in Part I of the CJ&D's briefing book, is that medical malpractice litigation, and the cases that are filed on account of it, are not fundamentally "frivolous," despite the allegations.

    As stated in the book: "According to averages calculated from the most recent data release by the National Center for State Courts (2019): 1) Medical malpractice cases represented only 0.15 percent of state civil caseloads in 2019. This rate is consistent with NCSC data from the previous seven years. 2) Medical malpractice cases represented only 3.9 percent of state tort caseloads in 2019. This rate is consistent with NCSC data from the previous seven years."

    A 2014 study, "Medical Harm: Patient Perceptions and Follow-up Action," by Johns Hopkins University School of Medicine Professor of Surgery Martin A. Makary and others, showed lawsuits being filed following patient harms in just 1 out of every 5 cases, or 19.9 percent. "This is similar to the Harvard Medical Practice Study, which reported an estimated ratio of adverse event to malpractice claim of 7.6 to 1. Other studies have estimated that as few as 2% - 3 % of patients pursue litigation. These findings all suggest that the vast majority of patient harms never result in a lawsuit." (6)

    The argument that patient lawsuit increase medical and insurance costs also is weak, given the data.

    According to the group Americans for Insurance Reform, claims per physician were at their lowest level in four decades in 2016, when adjusted for medical care inflation. When adjusted according to the Consumer Price Index, claims are at their lowest since 1982. (7)

    “Even aside from COVID-19, the briefing book includes a number of new studies that undercut the medical industry’s principal argument for so-called ‘tort reform’ laws: cost savings. It is clear that health care and insurance costs fail to decrease when ‘tort reforms’ are enacted, meaning there is no reason for patients to lose their legal rights.” CJ&D Executive Director Joanne Doroshow stated in a March 2021 press release.

Citations

1) Medical Liability Monitor (Feb. 2021) "Rate of diagnostic errors and serious misdiagnosis-related harms for major vascular events, infections, and cancers: toward a national incidence estimate using the 'Big Three.'" ECRI Executive Brief, "Top 10 Patient Safety Concerns 2020 (March 2020).

2) ECRI, "Diagnostic Errors: Why Do They Matter, and What Can You Do?" (2019).

3) Brenda Goodman and Andy Miller, "Deprived of Care: When ERs Break the Law," WebMD and Georgia Health News, Nov. 29, 2018.

4) Ziad Obermeyer et al, "Early death after discharge from emergency departments: analysis of national US insurance claim data," BMJ, Feb. 2, 2017.

5) Lena M. Chen, Anup Das and Jun Li, "Assessing the Qualithy of Public Reporting of US Physician Performance," Jame Intern. Med, May 6, 2019; University of Michigan, "System Grading Doctors is Inefficient, Needs Revisions," May 7, 2019; Lisa Rapaport, "U.S. government website for comparing doctors lacks data on most MDs," Reuters, May 6, 2019.

6) Heather G. Lye et al, "Medical Harm: Patient Perceptions and Follow-up Actions," Journal of Patient Safety, November 13, 2014.

7) Americans for Insurance Reform, "Stable Losses/Unstable Rates 2016" (November 2016).

Government Transparency

DHS, ICE Sued For Withholding

Documents On COVID-19 Precautions

By Steve Rensberry 

RP News

__________

EDWARDSVILLE - (RP News) - 11/9/2020 - Documents withheld by the Department of Homeland Security and Immigrations and Customs Enforcement involving the COVID-19 pandemic are the subject of a lawsuit filed on Nov. 6 by the American Civil Liberties Union.

According to a news release about the filing, ICE has reported 490 active cases of COVID-19 among those currently being detained. Critics suggest the number is much higher, however, given limited testing.

“We know, from discovery in more than 50 suits the ACLU has filed against ICE around the country, that the agency has fundamentally refused the basic precautions to keep people safe from COVID,” ACLU-DC Senior Counsel Arthur Spitzer said. “ICE claims it is spending hundreds of millions of dollars on the medical needs of detained people, and yet they’re still getting sick, and some are dying. The American people deserve to know what horrors people are being subjected to on our soil.”

Requested records include the following:

• The transfer or deportation of detained people who have tested positive for COVID-19 or exhibited symptoms.

• Any documentation from the start of the Trump administration and onward related to planning for a possible infectious disease outbreak.

• Models or predictions related to infection and mortality rates of detained people, ICE employees and contractors, and employees of third-party contractors.

• Any suspected or confirmed exposures, infections, and deaths of people living or working in immigration detention facilities.

• The risk of spreading COVID-19 to surrounding communities via staff, third-party contractors, visitors, detained people, and transfers.

• Access to hygiene products and personal protective equipment, and the possibility of social distancing.

• The testing of detained people, ICE employees and contractors, and employees of third-party contractors at ICE facilities, and testing, treatment, and care of detained people.

• Directives, policies, protocols, and trainings related to COVID-19 in immigrant detention.

• Congressional or state-based inquiries into coronavirus-related issues.

The notice said public health experts had been sounding the alarm for months that such centers could become COVID-19 hotspots, and that FY 2020 (ending Sept. 30) was one of the deadliest for ICE detention in 15 years. “This year has also seen numerous reports about the lack of even basic COVID precautions taken by ICE, as well as evidence that ICE has attempted to silence detainees who tried to speak out for better care,” the release stated.

“In a year with so many disasters in the headlines, the escalating humanitarian crisis at ICE detention centers has not received the kind of alarm it deserves,” said Eunice Cho, senior staff attorney at the ACLU’s National Prison Project. “The abuse, neglect, and degradation our clients regularly face in ICE custody have only worsened since the pandemic began: This year alone, we've seen allegations of sexual abuse, increased use of force, rampant use of solitary confinement, attempts by ICE to minimize its role in the deaths of detained people, and hunger strikes to protest the horrendous conditions. The decisions and policies that ICE uses to guide it during this pandemic are a matter of life or death for tens of thousands of detained people and the staff who work at these facilities. It is simply unacceptable that this agency thinks it can act with so little transparency and accountability.”

False Claims Act Reaps $3.5 Billion in FY 2015

   WASHINGTON – 1/1/2016 - The U.S. Department of Justice obtained more than $3.5 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, announced in December, 2015. This is the fourth year in a row that the department has exceeded $3.5 billion in cases under the False Claims Act, and brings total recoveries from January 2009 to the end of the fiscal year to $26.4 billion.

    “The False Claims Act has again proven to be the government’s most effective civil tool to ferret out fraud and return billions to taxpayer-funded programs,” Mizer said. “The recoveries announced today help preserve the integrity of vital government programs that provide health care to the elderly and low income families, ensure our national security and defense, and enable countless Americans to purchase homes.”

    Of the $3.5 billion recovered last year, $1.9 billion came from companies and individuals in the health care industry for allegedly providing unnecessary or inadequate care, paying kickbacks to health care providers to induce the use of certain goods and services, or overcharging for goods and services paid for by Medicare, Medicaid, and other federal health care programs. The $1.9 billion reflects federal losses only. In many of these cases, the department was instrumental in recovering additional millions of dollars for consumers and state Medicaid programs.

   The next largest recoveries were made in connection with government contracts. The government depends on contractors to feed, clothe, and equip our troops for combat; for the military aircraft, ships, and weapons systems that keep our nation secure; as well as to provide everything that is needed to fund myriad programs at home. Settlements and judgments in cases alleging false claims for payment under government contracts totaled $1.1 billion in fiscal year 2015.

  The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government contracts, including national security and defense contracts, as well as under government programs as varied as Medicare, veterans’ benefits, federally insured loans and mortgages, highway funds, research grants, agricultural supports, school lunches, and disaster assistance. In 1986, Congress strengthened the Act by amending it to increase incentives for whistleblowers to file lawsuits on behalf of the government.

    Most false claims actions are filed under the Act’s whistleblower, or qui tam, provisions that allow individuals to file lawsuits alleging false claims on behalf of the government. If the government prevails in the action, the whistleblower, also known as the relator, receives up to 30 percent of the recovery. Whistleblowers filed 638 qui tam suits in fiscal year 2015 and the department recovered $2.8 billion in these and earlier filed suits this past year. Whistleblower awards during the same period totaled $597 million.

Health Care Fraud

    Including this past year’s $1.9 billion, the department has recovered nearly $16.5 billion in health care fraud since January 2009 to the end of fiscal year 2015 – more than half the health care fraud dollars recovered since the 1986 amendments to the False Claims Act. These recoveries restore valuable assets to federally funded programs such as Medicare, Medicaid, and TRICARE – the health care program for the military. But just as important, the department’s vigorous pursuit of health care fraud prevents billions more in losses by deterring others who might otherwise try to cheat the system for their own gain. The department’s success is a direct result of the high priority the Obama Administration has placed on fighting health care fraud. In 2009, the Attorney General and the Secretary of the Department of Health and Human Services, the department that administers Medicare and Medicaid, announced the creation of an interagency task force called the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement. Additional information on the government’s efforts in this area is available at StopMedicareFraud.gov, a webpage jointly established by the Departments of Justice and Health and Human Services.

    Two of the largest health care recoveries this past year were from DaVita Healthcare Partners, Inc., the leading provider of dialysis services in the United States. DaVita paid $450 million to resolve allegations that it knowingly generated unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients, and then billed the government for costs that could have been avoided. DaVita paid an additional $350 million to resolve claims that it violated the False Claims Act by paying kickbacks to physicians to induce patient referrals to its clinics. DaVita is headquartered in Denver, Colorado, and has dialysis clinics in 46 states and the District of Columbia.

   Hospitals were involved in nearly $330 million in settlements and judgments this past year. A cardiac nurse and a health care reimbursement consultant filed a qui tam suit against hundreds of hospitals that were allegedly implanting cardiac devices in Medicare patients contrary to criteria established by the Centers for Medicare and Medicaid Services in consultation with cardiologists, professional cardiology societies, cardiac device manufacturers, and patient advocates. The department settled with nearly 500 of these hospitals for a total of $250 million, including $216 million recovered in the past fiscal year. For details, see 500 Hospitals.

    Several settlements involved violations of the Stark Law. The Stark Statute prohibits certain financial relationships between hospitals and doctors that could improperly influence patient referrals. Services provided in violation of the Stark Statute are not reimbursable by Medicare or Medicaid. Hospitals settling false claims involving Stark violations include Adventist Health System for $115 million, an organization that operates hospitals and other health care facilities in 10 states; North Broward. Hospital District for $69.5 million, a special taxing district of Florida that operates hospitals and other health care facilities in Broward County, Florida; and Georgia hospital system Columbus Regional Healthcare System and Dr. Andrew Pippas for $25 million plus contingent payments up to an additional $10 million The Adventist settlement also involved allegations of miscoding claims to obtain higher reimbursements for services than allowed by Medicare and Medicaid

    Claims involving the pharmaceutical industry accounted for $96 million in settlements and judgments. Daiichi Sankyo Inc., a global pharmaceutical company with its U.S. headquarters in New Jersey, paid $39 million to resolve allegations of false claims against the United States and state Medicaid programs. Daiichi allegedly paid kickbacks to physicians to induce them to prescribe Daiichi drugs, including Azor, Benicar, Tribenzor and Welchol. Medicare and Medicaid prohibit reimbursement for drugs involved in kickback schemes. AstraZeneca LP and Cephalon Inc. paid the United States $26.7 million and $4.3 million, respectively, in separate settlements for allegedly underpaying rebates owed under the Medicaid Drug Rebate Program. As part of those settlements, the two drug manufacturers agreed to pay an additional $23 million to state Medicaid programs for their losses. And in another settlement, PharMerica Corp., the nation’s second largest nursing home pharmacy, agreed to pay the United States $9.25 million to resolve allegations that it solicited and received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the drug Depakote for nursing home patients. PharMerica is headquartered in Louisville, Kentucky.

    Skilled nursing homes and rehabilitation facilities have also been fertile ground for civil fraud and false claims actions. In the largest failure of care settlement with a skilled nursing home chain in the department’s history, Extendicare Health Services Inc. and its subsidiary, Progressive Step Corporation, agreed to pay the United States $32.3 million to resolve allegations that Extendicare billed Medicare and Medicaid for deficient nursing services and billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services. Extendicare and Pro-Step paid an additional $5.7 million to eight states for their Medicaid losses. The department has ongoing litigation against additional nursing home chains and rehabilitation centers based on similar allegations of false claims for medically unreasonable or unnecessary rehabilitation therapy. For example, see HCR ManorCare.

Housing and Mortgage Fraud

    The department has recovered over $5 billion in housing and mortgage fraud from January 2009 to the end of fiscal year 2015, including this past year’s recoveries of $365 million. Notable recoveries this past year include a $212.5 million settlement with First Tennessee Bank N.A. First Tennessee admitted that from 2006 to 2008, through its subsidiary, First Horizon Home Loans Corporation, it originated and endorsed mortgages for federal insurance by the Federal Housing Administration (FHA) that did not meet eligibility requirements. First Tennessee also admitted failing to report such deficiencies to the authorities as required under the program despite widespread knowledge by its senior managers by early 2008. In August 2008, First Tennessee sold First Horizon to MetLife Bank N.A., a wholly-owned subsidiary of MetLife Inc. Metlife admitted similar misconduct regarding the loans it originated and endorsed from September 2008 to March 2012. MetLife paid the United States $123.5 million to resolve liability under the False Claims Act arising from its misconduct in endorsing mortgagees for FHA insurance.

    The department also settled claims against Walter Investment Management Corp. for $29.63 million. The government alleged that the company, through subsidiaries Reverse Mortgage Solution Inc., REO Management Solutions LLC, and RMS Asset Management Solutions LLC, caused false claims for fees and other costs in servicing reverse mortgages under the Department of Housing and Urban Development’s (HUD’s) Home Equity Conversion Mortgages (HECM) program. Reverse mortgage loans allow elderly people to access the equity in their homes. The loans provide monthly payments that enable the elderly to meet their day-to-day living expenses while remaining in their homes. To encourage these loans, HUD insures banks and other institutions that service the mortgages against loss, providing the institution complies with requirements to ensure the quality of such loans. Walter Investment allegedly failed to comply with these requirements.

    These recoveries are part of the broader enforcement efforts by President Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force in 2009, to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force, visit www.stopfraud.gov.

Government Contracts

    Government contracts and federal procurement accounted for $1.1 billion in fraud settlements and judgments in fiscal year 2015, bringing procurement fraud totals to nearly $4 billion from January 2009 to the end of the fiscal year. Significant cases include a $146 million settlement with Supreme Group B.V. and several of its subsidiaries for alleged false claims to the Department of Defense (DoD) for food, water, fuel, and transportation of cargo for American soldiers in Afghanistan. Supreme Group is based in Dubai, United Arab Emirates (UAE). In addition, Supreme Group affiliates Supreme Foodservice GmbH, a privately held Swiss company, and Supreme Foodservice FZE, a privately-held UAE company, pleaded guilty to related criminal violations and paid more than $288 million in criminal fines.

    In two other defense contract settlements, Lockheed Martin Integrated Systems, a subsidiary of aerospace giant Lockheed Martin Inc., paid $27.5 million and DRS Technical Services Inc. paid $13.7 million to resolve allegations that their employees lacked required job qualifications while the companies charged for the higher level, qualified employees required under contracts with U.S. Army Communication and Electronics Command (CECOM). The CECOM contracts were designed to give the Army rapid access to products and services for operations in Iraq and Afghanistan.

In a pair of cases involving contracts with the General Services Administration, VMware Inc. and Carahsoft Technology Corporation paid the United States $75.5 million and Iron Mountain Companies paid $44.5 million to settle their respective liability under the False Claims Act. The government alleged that California-based VMware and Virginia-based Carahsoft misrepresented their commercial sales practices, which resulted in overcharging government agencies for their software products and services sold through GSA’s Multiple Award Schedule. Similarly, Iron Mountain, a records storage company headquartered in Massachusetts, misrepresented its commercial sales practices to GSA and failed to give certain discounts given to its commercial customers, as required to gain access to the vast federal marketplace available to contractors through the Multiple Award Schedule.

    The department settled allegations that private contractor U.S. Investigations Services Inc. (USIS) violated the False Claims Act in performing a contract with the Office of Personnel Management (OPM) to perform background investigations of federal employees and those applying for federal service. The government alleged that USIS took shortcuts that compromised its contractually-required quality review and that, had the government known, it would not have paid for the services. USIS agreed to forego at least $30 million in payments legitimately owed to the company to settle the government’s allegations.

Other Fraud Recoveries and Actions

    Although health care, mortgage, and government contract fraud dominated fiscal year 2015 recoveries, the U.S. Justice Department has aggressively pursued fraud wherever it is found in federal programs.The department recovered $44 million from Fireman’s Fund Insurance Company for alleged fraud under the U.S. Department of Agriculture’s federal crop insurance program. The United States alleged that Fireman’s Fund knowingly issued federally reinsured crop insurance policies that were ineligible for federal reinsurance. Specifically, Fireman’s Fund allegedly backdated policies, forged farmers’ signatures, accepted late and altered documents, whited-out dates and signatures, and signed documents after relevant deadlines. The policies were issued by Fireman’s Fund offices in California, Kansas, Mississippi, North Dakota, Texas, and Washington.

    The department also recovered $13 million from Education Affiliates, a for-profit education company based in White Marsh, Maryland, for alleged false claims to the Department of Education for student aid for students whose qualifications for admission were falsified to get them enrolled so they could receive aid which would be paid to the school. Education Affiliates operates 50 campuses throughout the United States under various trade names.

    In other actions, the department filed lawsuits to recover funds disbursed under the Troubled Asset Relief Program (TARP) and payments made under contracts awarded to benefit disadvantaged populations identified under the Small Business Administration’s set-aside programs. In one action, the department sued the estate and trusts of the late Layton P. Stuart, former owner and president of One Financial Corporation, and its operating subsidiary, One Bank & Trust N.A., both based in Arkansas, alleging that Stuart made misrepresentations to induce the Department of the Treasury to invest TARP funds in One Financial as part of Treasury’s Capital Purchase Program. The department recently settled with the Stuart estate and trusts for $4 million, but claims remain pending against One Financial Corporation.

   In a second action, the department filed suit against Florida-based Air Ideal Inc. and its owner, Kim Amkraut. The government alleged that Air Ideal and Amkraut falsely certified that the company qualified for preferences given to small businesses located in a Historically Underutilized Business Zone (HUBZone) when Air Ideal’s HUBZone location was no more than a virtual office and its principal place of business was in a non-HUBZone location. The government further alleged that Air Ideal used its fraudulently-procured HUBZone certification to obtain contracts from the Coast Guard, Army, Army Corps of Engineers, and Department of the Interior that were worth millions of dollars. The department settled with Air Ideal and Amkraut for $250,000 plus five percent of Air Ideal’s gross revenues for five years.

    In addition to those suits involving individuals described above, the department settled or filed suit against individuals in an array of cases. For example, Two Florida couples agreed to pay the United States $1.137 million collectively, to resolve allegations that they accepted kickbacks in exchange for home health care referrals to A Plus Home Health Care Inc. The United States previously settled with A Plus, its owner Tracy Nemerofsky, and five other couples that allegedly accepted payments from A Plus. Dr. Charles Denham, of Laguna Beach, California, paid the United States $1 million to settle allegations that he solicited and accepted kickbacks from CareFusion in return for promoting a CareFusion product and influencing recommendations by the National Quality Forum.

    Denham was a patient safety consultant who co-chaired a National Quality Forum Committee. After settling with two cardiovascular testing laboratories for $48.5 million - Health Diagnostics Laboratory Inc. (HDL) and Singulex Inc., the department intervened in three qui tam suits against another laboratory, Berkeley HeartLab Inc., a marketing company, BlueWave Healthcare Consultants Inc. and three individuals – BlueWave’s owners, Floyd Calhoun Dent III and Robert Bradley Johnson and HDL’s co-founder and former chief executive officer, LaTonya Mallory. The department also intervened in two qui tam suits against Florida cardiologist Dr. Asad Qamar and his practice, the Institute for Cardiovascular Excellence PLLC, alleging that Qamar and his practice billed Medicare for medically unnecessary peripheral artery procedures and interventions and paid kickbacks to patients by waiving Medicare copayments irrespective of financial hardship. The department also filed a complaint against H. Ted Cain, Julie Cain, Corporate Management Inc. and Stone County Hospital Inc. for false claims for Medicare reimbursement. The government alleged that Ted and Julie Cain, the hospital and hospital management company owned and controlled by Ted Cain, claimed reimbursement for the hospital’s costs at inflated rates and for ineligible expenses. These matters are ongoing.

    Outside the health care arena, EDF Resource Capital Inc. agreed to transfer assets worth $5.8 million to the United States, and its chief executive officer, Frank Dinsmore, agreed to pay $200,000 to the United States, to settle allegations that they violated the False Claims Act in failing to remit payments to the Small Business Administration under the 504 loan program. The 504 loan program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. The program operates through local lenders like EDF, who reap benefits from the program in return for shouldering certain financial obligations which Dinsmore and EDF allegedly ignored. The department also entered settlements with two individuals for evasion of Customs duties owed on imports of aluminum extrusions from the People’s Republic of China (PRC). Robert Wingfield, the U.S. sales representative of a Chinese manufacturer, and Bill Ma, owner of an ostensible importer, allegedly misrepresented the country of origin of goods to avoid steep antidumping and countervailing duties imposed by the Department of Commerce and collected by U.S. Customs and Border Protection on imports of aluminum extrusions from the PRC to protect domestic manufacturers from unfair foreign pricing practices. The government previously settled related allegations with four importers, bringing total settlements in the case to $4.6 million, including the $435,000 from Wingfield and Ma.

Recoveries in Whistleblower Suits

    Of the $3.5 billion the government recovered in fiscal year 2015, more than $2.8 billion related to lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $597 million to the individuals who exposed fraud and false claims by filing a qui tam complaint, often at great risk to their careers.

    The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 638 qui tam suits filed this past year. The growing number of qui tam lawsuits, particularly since 2009, has led to increased recoveries. From January 2009 to the end of fiscal year 2015, the government recovered $19.4 billion in settlements and judgments related to qui tam suits and paid whistleblower awards of $3 billion during the same period.

    “Many of the recoveries obtained under the False Claims Act result from courageous men and women who come forward to blow the whistle on fraud they are often uniquely positioned to expose,” said Principal Deputy Assistant Attorney General Mizer.

    In 1986, Senator Charles Grassley and Representative Howard Berman led successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009, Senator Patrick J. Leahy, along with Senator Grassley and Representative Berman, championed the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and other fraud statutes. And in 2010, the passage of the Affordable Care Act provided additional inducements and protections for whistleblowers and strengthened the provisions of the federal health care Anti-Kickback Statute.

   Principal Deputy Assistant Attorney General Mizer also expressed his deep appreciation for the many dedicated public servants who investigated and pursued these cases – the attorneys, investigators, auditors and other agency personnel throughout the Department of Justice’s Civil Division and the U.S. Attorneys’ Offices, as well as the agency Offices of Inspector General and the many federal and state agencies that contributed to the department’s recoveries this past fiscal year.

    “The department’s lawyers and staff, together with our law enforcement partners in federal and state governments, work tirelessly and often overcome daunting challenges to achieve these successes on behalf of the taxpayers,” Mizer said.

    The government’s claims in the matters described above are allegations only; except where indicated, there has been no determination of liability.

    Source: U.S. Department of Justice release of 12/19/2015

Lawsuit Challenges U.S. Deportation Policy

   WASHINGTON — 8/24/2014 - The American Civil Liberties Union, American Immigration Council, National Immigration Project of the National Lawyers Guild, and National Immigration Law Center today sued the federal government to challenge its policies denying a fair deportation process to mothers and children who have fled extreme violence, death threats, rape, and persecution in Central America and come to the United States seeking safety.
    The groups filed the case on behalf of mothers and children locked up at an isolated detention center in Artesia, New Mexico — hours from the nearest major metropolitan area. The complaint charges the Obama administration with enacting a new strong-arm policy to ensure rapid deportations by holding these mothers and their children to a nearly insurmountable and erroneous standard to prove their asylum claims, and by placing countless hurdles in front of them.
    "These mothers and their children have sought refuge in the United States after fleeing for their lives from threats of death and violence in their home countries," said Cecillia Wang, director of the ACLU's Immigrants' Rights Project. "U.S. law guarantees them a fair opportunity to seek asylum. Yet, the government's policy violates that basic law and core American values — we do not send people who are seeking asylum back into harm's way. We should not sacrifice fairness for speed in life-or-death situations."
   According to the complaint, the Obama administration is violating long-established constitutional and statutory law by enacting policies that have:

• Categorically prejudged asylum cases with a "detain-and-deport" policy, regardless of individual circumstances.
• Drastically restricted communication with the outside world for the women and children held at the remote detention center, including communication with attorneys. If women got to make phone calls at all, they were cut off after three minutes when consulting with their attorneys. This makes it impossible to prepare for a hearing or get legal help. 
• Given virtually no notice to detainees of critically important interviews used to determine the outcome of asylum requests. Mothers have no time to prepare, are rushed through their interviews, are cut off by officials throughout the process, and are forced to answer traumatic questions, including detailing instances of rape, while their children are listening.
• Led to the intimidation and coercion of the women and children by immigration officers, including being screamed at for wanting to see a lawyer.

   "Fast-tracking the deportations of women and children from immigration detention is an assault on due process. There is no way that justice can be served when so many people are being rushed through the system without any real opportunity to assert claims for relief. What we are seeing in Artesia is nothing less than a sham process that values expediency over justice," said Melissa Crow, legal director of the American Immigration Council.
    The plaintiffs include:

• A Honduran mother who fled repeated death threats in her home country to seek asylum in the United States with her two young children. The children's father was killed by a violent gang that then sent the mother and her children continuous death threats. When she went to the police they told her that they could not do anything to help her. It is common knowledge where she lived that the police are afraid of the gang and will do nothing to stop it.
• A mother who fled El Salvador with her two children because of threats by the gang that controls the area where they lived. The gang stalked her 12-year-old child every time he left the house and threatened kidnapping. She fears that if the family returns to El Salvador, the gang will kill her son. Some police officers are known to be corrupt and influenced by gangs. The mother says she knows of people who have been killed by gang members after reporting them to police.
• A mother who fled El Salvador with her 10-month-old son after rival gangs threatened to kill her and her baby. One gang tried to force the mother to become an informant on the activities of another gang, and when she refused, told her she had 48 hours to leave or be killed.

    "The women and children detained in Artesia have endured brutal murders of loved ones, rapes, death threats, and similar atrocities that no mother or child ever should have to endure, and our government is herding them through the asylum process like cattle," said Trina Realmuto, an attorney at the National Immigration Project of the National Lawyers Guild. "The deportation-mill in Artesia lacks even the most basic protections, like notice and the opportunity to be heard, that form the cornerstone of due process in this country."
    The lawsuit, M.S.P.C. v. Johnson, was filed in the U.S. District Court for the District of Columbia. Co-counsel in this case includes the law firms of Jenner & Block, and Van Der Hout, Brigagliano & Nightingale, LLP; and the ACLU of New Mexico, ACLU of San Diego & Imperial Counties, and ACLU of the Nation's Capital.
    "Any mother will do whatever it takes to make sure her children are safe from harm's way," said Karen Tumlin, managing attorney for the National Immigration Law Center. "Our plaintiffs are no different: they have fled their homes to protect their children, only to find that the U.S. deportation system is intent upon placing them back in the dangerous situations they left. We are filing this lawsuit today to ensure that each mother is able to have her fair day in court, and that we are not sending children and their mothers back to violence or their deaths."
   The complaint is available at: aclu.org/immigrants-rights/mspc-v-johnson-complaint

Zillow, Inc. Faces Class Action Suit Over Stock

   SEATTLE - (BUSINESS WIRE) - 11/30/2012 - Securities law firm Hagens Berman Sobol Shapiro, LLP (“Hagens Berman”), recently  announced the filing of a class-action securities lawsuit against Zillow, Inc. (NASDAQ:Z) (“Zillow”) on behalf of a proposed class of investors who purchased Zillow stock during the period from Feb. 15, 2012, to Nov. 6, 2012 (the “Class Period”), inclusive.
    Shareholders who purchased or otherwise acquired Zillow common stock during the Class Period are encouraged to contact Hagens Berman attorney Karl Barth at 206-623-7292 or to contact the Hagens Berman legal team through e-mail at Zillow@hbsslaw.com to discuss their legal rights. Investors can also contact Mr. Barth by visiting www.hb-securities.com/cases/Zillow.
    Investors who wish to serve as lead plaintiff in the case must move the court no later than Jan. 28, 2013. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Class members need not seek to become a lead plaintiff in order to share in any possible recovery.
    Hagens Berman’s lawsuit, filed Nov. 29, 2012, in the United States District Court for the Western District of Washington, alleges that Zillow and certain of its officers violated the Securities Exchange Act of 1934.
    On Nov. 5, 2012, Zillow announced its third quarter, 2012, financial results and reduced guidance for the fourth quarter and the full 2012 year. On the news, Zillow’s stock price fell nearly 18 percent, closing at $28.15 per share.
    The complaint alleges that the defendants issued false and misleading statements to investors during the Class Period, causing the company’s stock to trade at an artificially high level. It claims the company misled investors regarding issues the company was having in signing up new real estate agents as subscribers, among other issues.
    The complaint further alleges that company insiders sold 3.1 million shares of Zillow stock for nearly $115 million while the stock traded at an artificially high price.
    The plaintiff in the case seeks to recover damages on behalf of the class and is represented by Hagens Berman Sobol Shapiro, LLP. Hagens Berman is a nationwide investor-protection law firm, with many years of experience prosecuting investor class actions and actions involving financial fraud.
    For more information about Hagens Berman Sobol Shapiro, LLP, or to review a copy of the complaint filed in this action, visit www.hb-securities.com/cases/Zillow.

Best Buy, Employees Reach Settlement Over Suit

   SAN FRANCISCO - (BUSINESS WIRE) - 6/18/2011 - Best Buy and civil rights lawyers announced on June 17 a proposed settlement of an employment discrimination class action brought on behalf of women and minority employees of Best Buy. The settlement remains subject to court approval.
   Through this settlement, Best Buy agrees to changes to its personnel policies and procedures that will enhance the equal employment opportunities of the thousands of women, African Americans, and Latinos employed by Best Buy nationwide.
    One of the counsel for Plaintiffs, Eve Cervantez, said that “Best Buy’s commitment to these changes makes it a ‘best in class’ employer of women and minorities and a leader in the areas of diversity and inclusion.” Best Buy said that these changes are part of Best Buy’s continuous improvement of its employees' experience and the systems which support that experience.
    The settlement has been submitted for approval to the Hon. Phyllis J. Hamilton, United States District Judge for the Northern District of California.
   The lawsuit, filed in December 2005, alleged that Best Buy discriminates against women, African American, and Latino employees of Best Buy retail stores in the United States by denying them promotions and more lucrative sales positions. Best Buy has denied any wrongdoing throughout the litigation.
    In reaching this proposed settlement, the parties agreed that it was in the interest of Best Buy, the plaintiffs, and the employee classes to resolve the matter through a settlement that provides injunctive relief to all class members, rather than to proceed with litigation.
   The case is entitled Holloway v. Best Buy, Civil Action No. 3:05-cv-05056-PJH (N.D. Cal.).

Machinists Union Sues South Carolina Governor

   WASHINGTON - (BUSINESS WIRE) - 1/23/2011 - The International Association of Machinists and Aerospace Workers (IAM) is suing South Carolina’s new Republican governor over her pledge to use state resources to deprive South Carolina citizens of rights guaranteed by federal labor law and the 1^st and 14^th amendments of the U.S. Constitution.
   The suit, filed today in U.S. District Court in Charleston, SC, charges Republican Gov. Nikki Haley with violating the federal constitutional and statutory rights to free speech, free association and due process by establishing a State governmental policy of hostility to unions and workers seeking to join unions.
   The IAM and the South Carolina AFL-CIO filed the suit under 42 U.S.C. § 1983, which prohibits state officials from acting in a way that deprives citizens of Federally-protected rights. The IAM suit also names Catherine Templeton as a co-defendant. Templeton is Gov. Haley’s pick to head South Carolina’s Department of Labor, Licensing and Regulation.
    “Gov. Haley placed her hand on a bible and swore to defend the Constitution of the United States,” said IAM Southern Territory Vice President Bob Martinez. “But her stated intention is to actively oppose workers in South Carolina who wish to exercise their legal right to join a union. There is nothing in the governor’s oath of office that gives her the right to choose which laws to enforce and which to ignore.”
    On December 8, 2010, Governor Haley announced she would nominate union avoidance attorney Catherine Templeton to head South Carolina’s Department of Labor, Licensing and Regulation (LLR), declaring unequivocally, “We’re going to fight the unions and I needed a partner to help me do it.”
    “By tasking Ms Templeton to lead the fight against union organizing in South Carolina, and specifically against the IAM at the Boeing facility in North Charleston, Gov. Haley is requesting a state official to violate the very law she is charged with enforcing,” said Martinez. “The state has no business whatsoever taking sides or exerting influence in a worker’s decision to join or not to join a union.”
Full text of the lawsuit is available here.
   The IAM represents more than 30,000 Boeing workers and is among the largest industrial trade unions in North America, with nearly 700,000 active and retired members in dozens of industries. For more information about the IAM, visit www.goiam.org.