News from Baron and Budd

Baron & Budd Expands Fraud-Fighting Practice, Adds False Claims Expert Jan Soifer

enarh — Wed, 3 Sep 2008 09:16:13 -0700

Release Date

September 3, 2008

Summary

Dallas, TX – (September 3, 2008) Former Chief of the Texas Attorney General’s Charitable Trusts Section and Deputy Chief of the Consumer Protection Division Jan Soifer has joined Dallas-based Baron & Budd, P.C. to work on its Qui Tam litigation team, announced the firm today.

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Austin-based Soifer will serve as Special Counsel in the Qui Tam / False Claims Act practice area, led by former head of the Texas Attorney General’s Civil Medicaid Fraud Section, Patrick O’Connell.

“We’re very proud to add Jan’s 25 years of experience and commitment to protecting U.S. taxpayers against fraud to our firm’s portfolio,” said Baron & Budd managing shareholder Russell Budd. “Her extensive record of success and leadership in the legal community will be a great asset as we expand this area of our practice.”

“I’m very excited about this partnership because it will enable me to apply Baron & Budd’s significant legal resources toward aggressively enforcing False Claims Acts throughout the country,” said Soifer. “This should come as good news to state and federal governments seeking to prosecute the perpetrators of fraud – and bad news to those who are engaging in it.”

Soifer, formerly a partner in the firm Lawrence & Soifer LLP, is a graduate of the University of Texas School of Law and Yale University. She has been recognized for her success in representing clients before state and federal trial and appellate courts of Texas, named the Outstanding Young Lawyer in Texas in 1991 by the Texas Young Lawyers Association and a Texas Super Lawyer in 2006, 2007 and 2008 by Law & Politics and Texas Monthly magazine.

Soifer is Board Certified in Consumer and Commercial Law by the Texas Board of Legal Specialization and is AV-rated by Martindale Hubbell Legal Directory, its highest rating. She has served as a Trustee of the Texas Bar Foundation, a Director of the State Bar of Texas, a member of the Supreme Court Gender Bias Reform Implementation Committee, and President of the Austin Bar Association, and she is currently a member of the State Bar’s Women in the Profession Committee and the Austin Bar Association’s Judicial Affairs Committee.

A former president of Volunteer Legal Services of Central Texas, a bar-sponsored project that provides free legal services to people in need, Soifer received the 1995 J. Chrys Dougherty Award for exemplary dedication and commitment to the principle of access to justice for all people regardless of income. She was also appointed one of the initial Commissioners on the Texas Access to Justice Commission, and currently serves on its Legislative Committee.

In addition to her work on Qui Tam and False Claims Act cases, Soifer has successfully represented plaintiffs suing officers and directors who breach their fiduciary duties and commit fraud against nonprofit organizations. She has also been a member of the adjunct faculty of the University of Texas School of Law since 1992, where she teaches trial advocacy classes.

About Baron & Budd, P.C.

For more than 30 years, the law firm of Baron & Budd, P.C. has championed the rights of people and communities harmed by corporate misconduct. With more than 50 attorneys and offices in California, Texas and Louisiana, Baron & Budd enjoys a national reputation as a leader of the plaintiffs’ bar. The firm represents individuals with mesothelioma and other diseases caused by asbestos; leukemia caused by benzene; injuries caused by other toxic substances and unsafe pharmaceuticals; water authorities seeking clean-up costs for drinking water contamination; government entities and whistleblowers fighting corporate fraud through Qui Tam and False Claims Act cases; securities investors defrauded by corporate wrongdoing; and consumers in class actions.

Press Contact

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Jan Soifer

Citibank settles California False Claims Act charges

enarh — Fri, 29 Aug 2008 11:01:26 -0700

Release Date

August 29, 2008

Summary

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Citibank has agreed to settle charges by California Attorney General Edmund G. Brown Jr. that from 1992 to 2003, Citibank had been stealing money from its credit card customers through the use of an illegal “account sweeping” program. In 2005, the California A.G.’s office initiated its investigation to determine whether Citibank violated the state’s False Claims Act by filing false reports omitting any mention of the swept funds. Brown’s three-year investigation revealed that nationally, Citibank pocketed more than $14 million from over 53,000 customers, with the help of a computer program that pilfered positive account balances from credit-card customers and deposited the money into Citibank’s general fund.

When a Citibank employee uncovered the scam in 2001 and notified his bosses, the information was buried and the whistle blower was sacked for informing an internal audit team about the illegal credit sweeps. One Citibank executive reasoned, “Stealing from our customers is a business decision, not a legal decision.” According to Brown, the same executive explained that the illegal sweep program was necessary to fund the executive bonus pool.

Under the terms of the California settlement, Citibank will now be paying refunds with interest to its credit card customers and $3.5 million in damages and civil penalties to the State of California. In addition, Citibank will be prevented from future attempts at the credit sweeps and the company will submit to an independent audit to ensure that Citibank’s customers do indeed receive refunds in accordance with the settlement.

For the full story, go to ConsumerAffairs.com.

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Baron & Budd Prevails in Case Against Manufacturers of Atrazine

enarh — Mon, 25 Aug 2008 09:21:19 -0700

Release Date

August 25, 2008

Summary

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DALLAS, Texas (August 25, 2008) Scott Summy of Baron & Budd, as co-lead counsel, and Steve Tillery of Korein Tillery have won a major legal battle in what will most likely become a harbinger of detection and clean-up of America's public water supply. Summy and Tillery are representing a public drinking water provider in Illinois whose water supplies are contaminated with the herbicide Atrazine. This is one of the first cases of its kind in the United States.

The legal battle took place after the six chemical manufacturers of Atrazine attempted twice to have the lawsuit dismissed at an early stage–moves that Scott Summy termed "delay tactics that threaten America's water supply." The July 7, 2008 ruling by Madison County Circuit Court Judge Daniel Stack allows the lawsuit to proceed after finding that the water providers had sufficient facts to show that the manufacturers had knowledge of the possible harm of the chemical.

Atrazine is a widely-used agricultural chemical that is commonly applied to crops in the United States to control weeds. Despite the threat of water contamination and industry knowledge of the environmental risks, approximately 77 million pounds of Atrazine are sprayed on U.S. crops each year. Some of the Atrazine migrates into surface water supplies and into wells that supply public drinking water. Approximately 1,200 public drinking water systems are currently contaminated with Atrazine and that number is expected to increase.

"Both Steve and I believe that the manufacturers should be held liable for the damage they have caused to public water supplies and the resulting cleanup costs," says Scott Summy of Baron & Budd.

The court’s ruling clears the way for the parties to proceed with discovery.

About Baron & Budd, P.C.

For more than 30 years, the Dallas-based law firm of Baron & Budd has championed the rights of people and communities harmed by corporate misconduct. With more than 50 attorneys and offices in California, Texas and Louisiana, Baron & Budd enjoys a national reputation as a leader of the plaintiffs' bar. Scott Summy, who leads the firm’s water contamination litigation section, has extensive experience in representing public water providers seeking to recover cleanup costs for drinking water contamination. The firm also represents individuals with asbestos-related mesothelioma and other diseases caused by exposure to toxic substances; government entities and whistleblowers fighting corporate fraud through qui tam and False Claims Act cases; securities investors defrauded by corporate wrongdoing; and consumers in class actions.

About Korein Tillery, L.L.C.

The Korein Tillery law firm, based on St. Louis, Missouri, represents individuals in personal injury suits involving products liability, medical malpractice, railroad and maritime claims and tobacco-related claims. The firm also handles a variety of commercial and class action claims. Like Baron & Budd, Korein Tillery has spent many years aggressively and successfully representing the firm’s clients in the courtroom.

Press Contact

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Scott Summy

Broward County, Florida auditor fired in retaliation for reporting fraud, whistle-blower suit alleges

enarh — Wed, 20 Aug 2008 09:03:00 -0700

Release Date

August 20, 2008

Summary

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David Richstone claims he was fired from his auditing position with the North Broward Hospital District after he persisted in an investigation that revealed irregular payments to the District's former CEO and President Alan Levine. As a result, Richstone has filed a whistle-blower suit against his former employer alleging that his termination violated Florida's Whistle Blower Act, which prevents corporations from retaliating against employees who challenge an employer's illegal behavior. The former auditor is suing for compensatory damages, back pay and benefits, and for reinstatement to his former position. Richstone's former boss—who also is no longer with the South Florida-based public-health system—admits that he received some improper payments, but claims he is owed more money than he was mistakenly paid.

For the full story, go to Fierce Healthcare.

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Justice Department slow to engage in whistleblower suits involving fraud in Iraq war effort

enarh — Thu, 14 Aug 2008 09:28:36 -0700

Release Date

August 14, 2008

Summary

The number of whistleblower suits brought since 2001 is so great that the Justice Department is unable to keep up with their investigation and prosecution. This appears to be particularly true in suits claiming that government contractors are bilking the government in connection with the war in Iraq. Unfortunately, the delay is costing the U.S. taxpayers money. Suits brought under the False Claims Act in recent years have recovered nearly $13 billion to the U.S. Government.

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The number of whistleblower suits brought since 2001 is so great that the Justice Department is unable to keep up with their investigation and prosecution. This appears to be particularly true in suits claiming that government contractors are bilking the government in connection with the war in Iraq.
Unfortunately, the delay is costing the U.S. taxpayers money. Suits brought under the False Claims Act in recent years have recovered nearly $13 billion to the U.S. Government.

The qui tam provision of the False Claims Act authorizes private citizens to file suit on behalf of the federal government to recover funds owed to it by contractors engaging in fraudulent practices.
Once a case is filed, it is placed under seal until it is reviewed by lawyers at the Justice Department. In cases involving the war in Iraq, it can take years for the government to investigate claims that government contractors knowingly sold defective products or overcharged federal agencies. The Justice Department reports that it has rejected 19 cases alleging government contractor fraud in Iraq and Afghanistan, and that it has 32 more cases currently under investigation.

The Justice Department admits that it is not sufficiently staffed to investigate all the whistleblower suits now on file. But the Department claims that its decisions on the cases concerning Iraq are based on merit, not on politics. Still, even Republican lawmakers have urged the Justice Department to step up the pace. "Whistle-blowers are the key to the secrets locked in closets throughout the federal bureaucracy and government contractors," stressed Sen. Charles E. Grassley (R-Iowa). "These patriotic Americans stick their necks out, against all odds, to help the federal government pursue fraud and save taxpayers tens of billions of dollars that would otherwise be lost."

For the full story, go to the Washington Post.

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Freight companies agree to pay substantial settlement in bid-rigging conspiracy case

enarh — Tue, 12 Aug 2008 16:15:43 -0700

Release Date

August 12, 2008

Summary

In yet another instance of corporate America swindling the U.S. government in its military contracts, seven freight companies have agreed to settle bid rigging claims against them.

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In yet another instance of corporate America swindling the U.S. government in its military contracts, seven freight companies have agreed to settle bid rigging claims against them. The companies, under contract with the Defense Department, move household goods belonging to U.S. military and civilian families. The government filed suit under the False Claims Act case alleging that moving companies in Europe agreed among themselves to raise and to fix the rates charged by the companies for packing and unpacking services performed for U.S. military families stationed in Germany and other countries in Europe. In turn, freight companies working in the U.S. then conspired to submit their bids to the Defense Department at agreed-upon rates that were spiked in accordance with the scheme devised by the European freight companies. As a result of the freight companies' illegal and conspiratorial actions, the U.S. Government overpaid on its transportation contracts for at least two years.

The United States became aware of the conspiracy after two suits were filed—one in Virginia by two employees of one of the German freight companies and another in Missouri by the owner of an American freight forwarding company. The whistle-blower suits were filed under the qui tam provision of the False Claims Act, which allows individual citizens (called “relators”) to make claims on the Government's behalf to recover ill-gotten gains.

The seven settling freight companies are: Air Land Forwarders; Arpin International Group; Covan International; Jet Forwarding; SIRVA, the parent company of Allied Freight Forwarding; Global Worldwide; and North American Van Lines.

For the full story, go to Market Watch.

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Better Buses for California School Children

enarh — Wed, 6 Aug 2008 07:15:41 -0700

Release Date

August 6, 2008

Summary

SAN FRANCISCO (August 6, 2008) Environmental Law Foundation, Our Children’s Earth and Communities for a Better Environment, three Bay Area environmental organizations, and Laidlaw Transit, Inc. agreed to a settlement of a lawsuit, under which Laidlaw will provide California’s school children with newer and cleaner buses.

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Laidlaw Transit to Provide Clean School Buses

Under this agreement, Laidlaw will invest a minimum of $4.7 million dollars over the next five years to continue retrofitting buses in its California fleet that are more than five years old with air pollution control devices to reduce diesel exhaust. In addition, Laidlaw will make substantial investments in its fleet over the next seven years by either retrofitting additional buses or purchasing new buses that meet the most stringent air pollution standards in the country.

“This agreement shows that Laidlaw Transit, Inc. and its parent, First Group America, Inc., are committed to protecting public health and the environment and going above and beyond the requirements of the law,” said FirstGroup America spokesperson Glenda Lamont.

“This is a great step forward for public health and the environment. This case provides a great example of the benefits the voters intended when they passed Proposition 65,” said Mike Costa of Our Children’s Earth.

Various state, federal and international agencies agree that diesel exhaust is potentially dangerous
and should be avoided. California limits exposure to diesel exhaust on school buses through an “anti-idling law” that minimizes the amount of time children are exposed to it. However, the agreement reached today goes further by reducing the amount of diesel exhaust the buses generate.

“This is a win-win for children, the environment and Laidlaw’s ongoing operations in California," stated Shana Lazerow, attorney for Communities for a Better Environment.

“With this agreement, Laidlaw is showing that it is possible to provide clean buses to California’s school children. We hope all of the other bus operators follow Laidlaw’s lead,” said Jim Wheaton of the Environmental Law Foundation.

Baron & Budd represented the environmental groups in this litigation.

The National Transportation Safety Board and the National Highway Traffic Safety Administration and other authoritative studies have shown that riding a school bus is safer than taking private transportation, walking or riding a bike to school.

For more information about the foundations and Laidlaw, please see these web links:

Environmental Law Foundation: www.envirolaw.org
Our Children’s Earth Foundation: www.ocefoundation.org
Communities for a Better Environment: www.cbecal.org
Laidlaw Transit, Inc., a member of the FirstGroup America, Inc. companies: www.firstgroup.com

Press Contacts

Baron & Budd P.C.
Susan Jones Knape
214.629.0596

Environmental Law Foundation
James Wheaton
510.208.4555

Communities for a Better Environment
Shana Lazerow
510.302.0430 ext. 18

Our Children’s Earth Foundation
Mike Costa
415.342.0042

About Baron & Budd, P.C.

For more than 30 years, the law firm of Baron & Budd, P.C. has championed the rights of people and communities harmed by corporate misconduct. With more than 50 attorneys and offices in California, Texas and Louisiana, Baron & Budd enjoys a national reputation as a leader of the plaintiffs’ bar. The firm represents individuals with mesothelioma and other diseases caused by asbestos; injuries caused by other toxic substances and unsafe pharmaceuticals; water authorities seeking clean-up costs for drinking water contamination; government entities and whistleblowers fighting corporate fraud through qui tam and False Claims Act cases; securities investors defrauded by corporate wrongdoing; and consumers in class actions.

Press Contact

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Cincinnati Health Providers sued in False Claims Act case

enarh — Tue, 5 Aug 2008 08:08:16 -0700

Release Date

August 5, 2008

Summary

The federal government has filed a civil fraud case against several Cincinnati health care providers: Christ Hospital, the Health Alliance of Greater Cincinnati, Ohio Heart and Vascular Center and the now defunct Medical Diagnostic Associates. The suit alleges that from 1997 to 2004, Ohio Heart and Christ Hospital swapped referrals for patients whose services were billed to Medicare. Under the False Claims Act, the government could ask the court to triple the damages.

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The government's suit springs from a whistleblower action filed in 2003 by cardiologist Harry Fry, which case was sealed until the U.S. joined the case in the spring of 2008. The suit charges that the hospital and cardiologists ran an illegal kickback scheme. According to the complaint, Christ Hospital granted time to cardiologists in its state-of-the-art diagnostic center based on how much business the physicians sent to the hospital for surgical procedures. Further, when patients who required heart procedures arrived in Christ Hospital’s emergency room, those patients were sent along to the cardiologists who generated the most business for the hospital's diagnostic center. The chosen Ohio Heart physicians were allowed to use hospital facilities and equipment without having to pay overhead. Medicare and other federal insurance programs footed the bills. Government attorneys argue that such kickbacks are illegal when Medicare is paying for it.

Dr. Fry filed the initial whistle-blower action under the qui tam provision of the False Claims Act, which allows a private citizen to institute a claim for fraud on the government's behalf and to share in any money received. Under that provision, the whistleblower, Dr. Fry, would be entitled to a share of any recovery.

For the full story, go to http://news.cincinnati.com/apps/pbcs.dll/article?AID=/20080729/NEWS01/307290012.

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Amerigroup reaches settlement of Illinois qui tam litigation

enarh — Mon, 4 Aug 2008 08:48:05 -0700

Release Date

August 4, 2008

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Healthcare company Amerigroup Corp. (AGP) has announced a settlement agreement to conclude its civil qui tam litigation arising out of the provider's fraudulent Medicaid practices in Illinois. The company will pay a substantial award to the U.S. and the State of Illinois, including a hefty bill for legal fees. The company will also enter into a corporate integrity agreement with the U.S. Department of Health and Human Services, the federal agency that provides partial funding for state Medicaid programs. Such agreements sometimes require a health-care provider to retain a compliance officer, develop written standards and policies, and implement a comprehensive employee training program. Amerigroup will not admit any wrongdoing.

Amerigroup provides managed care for beneficiaries of Medicaid in ten states. A former Amerigroup employee cried foul on the provider's practice in Illinois of discouraging pregnant women and individuals with special needs from enrolling in the plan. The employee-whistle blower, the state of Illinois and the federal government filed suit against Amerigroup, charging that the company defrauded state and federal agencies by such practices. A federal jury awarded the plaintiffs damages, which amount was tripled in accordance with state and federal "whistle blower" statutes. The trial court imposed additional fraud-related penalties. In 2007, the court ordered Amerigroup to pay damages in the nine figures, plus the plaintiffs' attorneys' fees. Amerigroup appealed the judgment to the U.S. Court of Appeals for the 7th Circuit and posted a bond. The settlement was reached while the appeal was pending.

Amerigroup has also announced that, unrelated to the case, it has voluntarily ended its 2006 contract with Illinois and no longer operates there.

For more information, go to http://www.rttnews.com/Content/BreakingNews.aspx?Id=661488&Category=Breaking%20News&SimRec=1&Node=&pageNum=2266_2523_1.

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Sizeable settlement in Grainger “whistle blower” suit

enarh — Sat, 2 Aug 2008 08:50:05 -0700

Release Date

August 2, 2008

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W.W. Grainger Inc. (GWW) has agreed to pay a substantial amount to settle a lawsuit that accused the Fortune 500 industrial supply company of improperly over-billing the U.S. government on its supply contracts. The lawsuit was filed in federal court in Milwaukee in 2006 by former Grainger executive Brian Holbrook, a district sales manager of government sales. The suit alleged that Grainger routinely cheated the Federal General Services Administration by charging more than double the specified 26% above cost markup rate agreed upon under the government's supply contract. In addition, the whistle blower suit claimed that Grainger obtained and re-labeled products made in non-Trade Agreement countries, such as China and Taiwan, and supplied the products to the government. After the federal government joined in the action, the Justice Department announced that Grainger had not fulfilled the disclosure obligations and pricing provisions of the General Services Administration contract. Following discussions with the Justice Department, Grainger reached the settlement agreement.

Holbrook, the former Grainger employee, filed the "whistle blower" suit under the "qui tam" provision of the U.S. False Claims Act, allowing a private citizen to institute a claim for fraud on the government's behalf and to share in any money received. It is estimated that Holbrook could receive 15%-25% of the settlement proceeds.

For the full story, go to http://www.chicagotribune.com/business/chi-grainger-settles-whistleblower-suit-jul25,0,5572142.story.