Glaxo’s Fallout in China

After a whistle-blower working for one of the world’s biggest pharmaceutical companies began sending anonymous tips about fraud and corruption inside its operation in China, authorities there moved in. They arrested top executives and corporate detectives the company had hired to track down the whistle-blower. Here is how the events transpired. read more »

As China Battles Corruption, Glaxo Lands in the Cross Hairs

China sought to make an example of the GlaxoSmithKline case, which involved bribery of doctors and investigators and ended with guilty pleas and record penalties.

Peter Humphrey was in the bathroom of his Shanghai apartment when the police kicked the door off its hinges and knocked him to the ground. Nearly two dozen officers stormed his home. They confiscated files, laptops and hard drives related to his work as a corporate investigator.

Mr. Humphrey and his wife, Yu Yingzeng, were taken to Building 803, a notoriously bleak criminal investigation center normally reserved for human smugglers, drug traffickers and political activists. Sleep-deprived and hungry, he was transferred later that day to a detention house, placed in a cage and strapped to an iron chair. Outside, three officers sat on a podium and demanded answers.

Mr. Humphrey knew the reason for the harsh interrogation. He and Ms. Yu had been working for GlaxoSmithKline, the British pharmaceutical maker under investigation in China for fraud and bribery. read more »

US Department of Justice announces settlement of HUD whistleblower case against Fairfield

The federal government said Tuesday that Fairfield and its housing authority paid $680,000 to settle False Claims Act allegations that Fairfield received money to pay for two coordinator positions in a U.S. Housing and Urban Development department program and did not use the grant for that purpose. read more »

U.S. top court skeptical toward State Farm hurricane fraud appeal

The Supreme Court on Tuesday appeared unlikely to throw out a jury verdict against State Farm that found the insurance company defrauded the U.S. government when it assessed damage caused by Hurricane Katrina along the Gulf of Mexico coast in 2005.

The eight justices heard arguments in State Farm's challenge to a 2015 lower court ruling upholding the verdict in a 2006 lawsuit brought by two whistleblowers, sisters Cori and Kerri Rigsby, under the False Claims Act, which lets people sue on behalf of the government over allegations it has been defrauded. read more »

Feds secure $1.2M judgment against former Texas hospital owner

The federal government has secured a $1.2 million civil judgment against Tariq Mahmood, MD, the former owner of several Texas hospitals, according to the Department of Justice.

From January 2010 to April 2013, Dr. Mahmood and others participated in a fraud scheme that involved changing, deleting and incorrectly sequencing diagnostic codes in a way that did not reflect the actual diagnoses and conditions of patients. Dr. Mahmood and others submitted the fraudulently coded claims to government and commercial payers.

In July 2014, after a four-day jury trial, Dr. Mahmood was found guilty of conspiracy to commit healthcare fraud, seven counts of healthcare fraud and seven counts of aggravated identity theft. He was sentenced to 135 months in federal prison and ordered to pay $599.1 million in restitution to Medicare, Medicaid and Blue Cross Blue Shield of Texas.

Following his conviction, the federal government brought a False Claims Act case against Dr. Mahmood. The court issued its final judgment in that case Oct. 28. The judge ordered Dr. Mahmood to pay $1.2 million to the federal government, which includes $288,414.50 in damages and an additional $935,000 in civil penalties arising from the submission of 85 false claims, according to the DOJ. read more »