WHISTLEBLOWER NEWS QUOTE OF THE DAY:

“The whistleblower program has seen tremendous growth since its inception and we anticipate the continued issuance of significant whistleblower awards in the months and years to come.”

— Sean X. McKessy, Chief of the SEC’s Office of the Whistleblower  

DAILY WHISTLEBLOWER HEADLINES:

Supreme Court says Glaxo must face racketeering lawsuits over a diabetes pill

The United States Supreme Court on Monday rejected a bid by GlaxoSmithKline to avoid a lawsuit brought by three health plans, which claimed they overpaid for the Avandia diabetes pill because the drug maker hid some of the safety risks.

In their lawsuit, the health plans contended Glaxo deliberately concealed significant side effects associated with Avandia and continued to promote the pill as a safer treatment for diabetes despite heart attack risks. read more » 

CFTC Charges Haena Park and Her Companies Phaetra Capital GP LLC, a/k/a/ Argenta Capital GP LLC, Phaetra Capital Management LP, a/k/a Argenta Capital LLC, and Argenta Group LLC with Misappropriation and Fraud

The Complaint also charges Park and Yul Kaseman with False Statements to the NFA

The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil enforcement action in the U.S. District Court for the Southern District of New York, charging Haena Park (Park) and her companies Phaetra Capital GP LLC, a/k/a/ Argenta Capital GP LLC, Phaetra Capital Management LP, a/k/a Argenta Capital LLC, and Argenta Group LLC, (collectively, Pool Defendants) with fraudulently operating a commodity pool and misappropriation of pool participants’ assets. The complaint also charges Park and Yul Kaseman with making false statements to the National Futures Association.

The CFTC complaint charges that from at least January 2010 through the present (the Relevant Period), Pool Defendants engaged in at least two fraudulent schemes in violation of the Commodity Exchange Act (Act): (1) the Pool Defendants fraudulently solicited at least $23 million from members of the public to participate in a commodity pool that traded futures contracts, as well as leveraged or margined retail off-exchange foreign currencies, and (2) Park, as the agent and officer Argenta Capital LLC, a predecessor of Phaetra Management, duped at least one investment firm to authorize Park to manage the firm’s investment account.

The CFTC complaint alleges that the Pool Defendants fraudulently solicited approximately 50 members of the public (pool participants) who deposited over $23 million into bank accounts opened in Park’s name and/or controlled by Park. In her solicitations, Park made material misrepresentations and omissions concerning her trading expertise and the purported profits she generated from her trading. For example, Park falsely claimed that an initial investment in November 2009 of $1 million achieved a cumulative return of 393.2% and grew to $4,778,229 by February 27, 2015. read more » 

Feds crack down on Medicare ambulance fraud

When the feds closed Brotherly Love Ambulance Inc. in October 2011 amid allegations of Medicare fraud, the owner's son quickly opened his own ambulance company and picked up where his mother had left off.

For a while, anyway. Bassem Kuran, who also was a driver for Brotherly Love, is to be arraigned this month for making false statements in a healthcare matter, related to his operation of VIP Ambulance Inc.

For years, teams of federal officials have been trying to stamp out this "whack-a-mole" pattern of one fraudulent ambulance operator shutting down only to have another - sometimes headed by a friend or family member - replace it.

But since 2014, authorities have hit on an effective strategy. They don't allow new ambulance firms in the Philadelphia region to be paid by Medicare. And they require all repetitive nonemergency trips - dialysis, for example - to receive prior authorization.

The impact of the crackdown has been huge in Southeastern Pennsylvania, where Medicare's annual spending on basic ambulance services plummeted to $12.7 million last year from $55.4 million in 2010, federal data show.

"We're never going to claim victory, but we think we did a good job of rooting out a lot of these fraudulent companies," said Nick DiGiulio, special agent in charge of the Philadelphia regional office of the U.S. Department of Human Services' Office of Inspector General.

Since early 2014, 83 ambulance firms - more than a quarter of the total in Southeastern Pennsylvania - have closed, according to Pennsylvania Department of Health data.

After 30 criminal convictions in the last five years leading to an aggregate of 82 years in prison and restitution orders totaling $22 million, DiGiulio said, "we're not hearing as much about this fraud."

The fraud, he said, centered on Medicare beneficiaries who needed kidney dialysis three times a week.