Allergan Settles for $13 Million after Whistleblowers Sue On Behalf of Government for Fraudulent Kickbacks to Eye Care Providers

A former Orange County, California headquartered company (now they are in Dublin, Ireland to avoid U.S. taxes) by the name of Allergan settled a False Claims Act (“FCA”) whistleblower lawsuit this week for $13 million dollars.  The main Whistleblower allegation was that Allergan engaged in kickback scheme with eye care providers in violation of federal and state FCA laws.   The way that Allergan was able to entice eye care providers to use its products (and thereby over-charge government programs like Medicare and Medicaid) was to provide them with business consulting, continuing medical education and other valuable resources.  Essentially, Allergan gave the eye care providers remuneration/payment in exchange for their prescribing and using Allergan products.  Then, Medicare and Medicaid paid a premium for those products when they were more expensive than alternative treatment options.

FCA or qui tam claims are brought by whistleblowers, or relators.  Our False Claims Act Attorneys in several cities throughout California handle these types of cases.  In return, we have recovered millions of dollars for the government.  We encourage those who witness such fraud against the government to report it.   We will then sue the company on behalf of the government and part of the recovery will go to the whistleblowers.

Under the FCA, the Judge is entitled to order the defendant to pay triple the actual damages that the jury finds.  In addition, the FCA also permits statutory penalties from $5,500 to $11,000 for each false claim submitted by the defendant.  As result, the whistleblower will receive approximately 15 to 25 percent of the total FCA recovery plus attorney’s fees.

As the main enforcement arm of the federal government, the Justice Department reviews all cases filed under the FCA.   Then, once the whistleblower case is assessed, the government decides whether it will prosecute or allow the whistleblower to bring the complaint on the government’s behalf.

The FCA is used to stem out fraud related to billing, staffing, and kickbacks. Examples of these are when financial companies are supposed to abide by state and federal laws and chose to ignore them.  They also bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services.  In addition, financial companies are often fount to illegally bill the government for substandard services by fraudulently certifying otherwise. Alternatively, these companies may realize that they have credit from their services that they have to repay to the government, but the companies do not reimburse the government within the 60 day time frame.  See these blogs for more examples of the FCA.

If you witness any potential false claims in California (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.