CORPORATE CRIME REPORTER
Billion Dollar False Claims Act Settlements Clog the Pipeline
25 Corporate Crime Reporter 25, June 15, 2011
There are at least ten False Claims Act settlements in the works that are likely to top a billion dollars each.
“A billion dollar settlement isn’t shocking anymore,” said Patrick Burns of Taxpayers Against Fraud. “People are talking of going to $2 billion or higher. The real question is – what do we have to do to get their attention? And the answer is – quite a lot.”
The ten cases in the works that Burns guesses will settle for $1 billion or more ?
Abbott Labs (Depakote), Johnson & Johnson (Risperdal), Pfizer (Protonix), Deutsche Bank (mortgage fraud), Ranbaxy (HIV drugs), Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial (mortgage fraud settlement with state Attorneys General and Department of Justice), Public Warehouse (Kuwait food fraud), State Street and Mellon Bank New York (foreign currency fraud), Quest Diagnostics and six other companies brought by the same relator (lab fraud), Merck/Schering Plough (Vytorin).
“Two years ago, I said the big pharma companies needed to run, not walk, to the settlement table,” Burns said. “And this is why. The numbers are getting bigger, and getting bigger faster. The Department of Justice's hand is getting stronger every day. The American people are beyond disgust with the scope of fraud. Every American has seen their house value decline by 15 to 25 percent due to mortgage fraud. They have seen their 401ks decline due to various kinds of stock market, banking and investment fraud. They are seeing rising debt in the country, and through it all has been this drumbeat of fraud. Juries want to send a message, and God help any company that takes its case before a jury of taxpayers.”
“In South Carolina, Johnson & Johnson foolishly took a case to trial involving Risperdal. The jury came back with $327 million for off-label marketing. That’s not a jaw dropping settlement for a national settlement. But this is South Carolina. The state has a population of 4.5 million. You have to multiply that South Carolina number by about 68 to get a national number. We are looking at the equivalent of $21 billion settlement for one drug if it were a national verdict.”
“Regardless of whether the South Carolina verdict stands or falls, the message has been sent. The cheapest deal these drug companies have is with the Department of Justice in the False Claims Act arena. But even here the numbers are going north fast. We have broken through the threshold. The Department of Justice and everyone else realizes we will not get change until we bring the pain. And more pain is clearly coming. My advice is still the same – the companies need to run, not walk, to the settlement table.”
Corporate Crime Reporter
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