Case Highlights

Listed below are highlights from the 2007 Fall semiannual report.

Criminal Investigations

Purdue Companies and Three Executives To Pay Nearly $635 Million for Fraudulently Marketing OxyContin
As part of a global criminal, civil, and administrative settlement agreement, the Purdue Frederick Company, Inc., and Purdue Pharma L.P. (collectively, the Purdue Companies), and three top executives agreed to pay almost $635 million to resolve a variety of Federal, State, and private liabilities. Specifically, the agreement resolved allegations that the Purdue Companies waged a fraudulent and deceptive marketing campaign aimed at convincing doctors nationwide that OxyContin, because of its time-release formula, was less prone to abuse and that it was less likely to cause addiction or to produce other narcotic side effects than competing immediate release opioids. The Purdue Frederick Company, Inc. is subject to a 25-year exclusion; Purdue Pharma L.P. agreed to enter a 5 year corporate integrity agreement (CIA) with OIG.

South Florida Medicare Fraud
OIG has employed a multifaceted approach to fight Medicare fraud in South Florida. Along with our partners and the U.S. Attorney's Office for the Southern District of Florida, we developed innovative methods to identify and prosecute fraud in a timely manner, resulting in $54.3 million in investigative receivables and a number of indictments. Additionally, we analyzed the claims patterns of HIV/AIDS infusion therapy providers and beneficiaries in three South Florida counties and determined that in the last half of 2006, these counties accounted for half of the total amount, and 79 percent of the amount for drugs, billed nationally for Medicare beneficiaries with HIV/AIDS. We also found that the approaches CMS and its contractors have used to control these aberrant billing practices have not proven effective. We recommended that CMS treat South Florida as a high-risk area, mandate site visits for certain providers, adjust contractor standards for processing new applications, modify the Statement of Work for the jurisdiction that includes South Florida, review all reassignments in high-risk areas, and strengthen revocations.

Maximus, Inc., Entered Into a $42.65 Million Settlement
Maximus, Inc., a revenue maximization consulting business for State and local jurisdictions throughout the country, entered into a $42.65 million settlement agreement with the Government to resolve its liability under the FCA. Maximus allegedly filed false claims for Medicaid-funded targeted case management services, which assist foster children with their medical, social, and educational needs. As part of the global settlement agreement, Maximus entered into a 5-year CIA and into a 24-month deferred prosecution agreement. In a novel provision, the CIA requires that OIG's Office of Audit Services perform the claims and contract reviews that are ordinarily performed by an Independent Review Organization.

Child Support Investigations

Indiana - A man was sentenced to 24 months' imprisonment and 1 year of probation and was ordered to pay $218,000 in restitution for failure to pay child support. In 1999, he was ordered to pay $500 a week to support his six children. The investigation revealed that the individual, who was formerly a chiropractic doctor, sold two chiropractic clinics and moved to Massachusetts. He later moved to Florida where he was working as a substitute teacher.

Missouri - A man was sentenced to 3 months' imprisonment and 1 year of supervised release and was ordered to pay $190,000 in restitution for failure to pay child support. The restitution amount includes over $5,000 that he took from his children's personal bank accounts and includes an amount that he owed for spousal support. The investigation revealed that from 1996 to 2004, the individual; earned a six-figure income yet made only minimal support payments, some of which were as little as $32 a month. In addition, to avoid paying child and spousal support, he liquidated or concealed assets. In 2006, he was arrested in New Mexico where he was working as a bartender at a golf resort.

Employee Fraud and Misconduct

Maryland - A former NIH senior researcher was sentenced to 4 years in prison followed by supervised release for life, fined $12,500 and ordered to register as a sex offender for possession of child pornography. The investigation revealed that the researcher used his NIH e-mail account to order child pornography videos. In a search of his home, child pornography videos, as well as a home computer containing over 600 child pornographic images, were discovered.

South Dakota - A former IHS employee was ordered to pay $1,700 in restitution and fines for his guilty plea to theft or embezzlement in connection with health care. While working as a maintenance worker at the Pine Ridge Indian Hospital, the employee illegally took possession of Government property, including tools, a snow blower, a refrigerator, ladders, and other items. Many of the stolen items were recovered at his residence.