CORPORATE CRIME REPORTER
Matria
to Pay $9 Million to Settle False Claims Act Charge
20 Corporate Crime Reporter 11(4), March 7, 2006
Matria Healthcare will pay $9 million to settle a False Claims Act lawsuit brought
by the federal government.
Two former employees alleged that the Marietta, Georgia based company defrauded
the federal government by
engaging in a series of improprieties in the sale of diabetes self care products.
The former employees alleged that the management of the company also sought
to cover-up the fraud by firing them when they raised the fraud with top management.
“A lot of pressure was put on the workers to play ball,” said Mike
Bothwell of Bothwell & Simpson, who represented the two former employees.
One of the whistleblowers, Sandra Clarke, alleged in her complaint that top
management not only condoned of the fraudulent schemes, but in some cases developed
them.
One of the schemes involved shipping products to dead people – and then
billing the federal government.
According to the complaint,
the company would ship out supplies to people and institutions who didn’t
order them. Medicare would be billed for the shipments. The customers would
return the supplies to the company because they didn’t order them. But
Medicare would not be reimbursed.
Clarke claims that she was fired “in substantial part” because she
sought to resolve the false claims allegations internally.
According to the settlement
agreement, of the $9 million paid to the government, Clarke will receive
$1,188,000.
Another whistleblower, Kim Politisky will receive $792,000.
Under the False Claims Act, the whistleblower who brings the fraud to the attention
of the government may be awarded a portion of the funds recovered by the federal
government – typically between 15 and 25 percent.
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