Michigan Personal Injury Blog - Fraud

Debt Settlement Company Ordered to Pay $200,000 for Defrauding New York State Customers

David Mittleman — Sat, 17 Oct 2009 10:00:00 GMT

During a time when most people are desperate to pay off those high-interest rate credit card balances, it can be tempting to call up a debt settlement company. They often promise a quick fix: by paying them a fee, they agree to negotiate much lower settlement amounts with your creditors. Indeed, for many people debt settlement seems like the answer to fix all of their financial woes and a way to avoid bankruptcy. However, a recent lawsuit against a debt settlement company in New York state might make you think twice before “signing on the dotted line”, so to speak.

In a ruling on Thursday, the Arizona-based Nationwide Asset Services was ordered to pay $200,000 for defrauding 1,981 customers in New York State. Furthermore, the company was also barred from conducting further business in New York, unless they provide a $500,000 performance bond to protect their customers.

In their advertisements, Nationwide Asset Services promised to help customers pay off outstanding debts by as much as 25 to 40 percent. However, less than 1% of the 2,000 New York State residents actually saved that much. Currently, there is another lawsuit pending against CSA-Credit Solutions, a Richardson, Texas debt-consolidation company. That case has yet to be resolved.

Originally posted at InjuryBoard by David Mittleman

Biomed Firm Claims it was Duped by Doc Who Falsified Prostate Cancer Findings

David Mittleman — Sun, 06 Sep 2009 15:26:00 GMT

The University of Pittsburgh and one of its former cancer researchers are in hot water after the biomedical research firm, Onconome, Inc., filed a lawsuit against the university and researcher alleging fraud, breach of contract, and failure to supervise.

The court documents paint a story that, if true, describes a quest to collect millions of dollars in exchange for made up results. According to the lawsuit, Onconome, Inc., paid millions to the university and researcher, Dr. Robert Getzenberg, hoping to develop and test a prostate cancer screening method. The doctor then allegedly falsified his results and left the company hanging as it tried to replicate his methods to no avail. He now directs urology research at the prestigious Johns Hopkins University School of Medicine. This lawsuit comes on the heels of an earlier lawsuit filed in state court against Johns Hopkins by the biomed firm.

Originally posted at InjuryBoard by David Mittleman

Las Vegas Lawyers and Doctors Go All In For Fraud

Devon Glass — Thu, 20 Aug 2009 14:44:06 GMT

Beginning in 1999, a few doctors and lawyers in the Las Vegas area decided it would be a great idea to trump up accident related injuries to increase the damages awarded to people injured in automobile accidents or bring false medical malpractice claims against innocent doctors. According to an indictment issued through the FBI and US Attorney Gregory Brower, Dr. Mark Kabins, Noel Gage, Howard Awand, and Dr. John Thalgott, all conspired to falsify medical records, improperly refer an person to a personal injury attorney, and sue an innocent doctor in order to cover up the improper treatment by Drs. Kabins and Thalgott. If this is starting to sound like a John Grisham novel, things are just getting started. But before we get too far into the details of this case, I would like to make it clear the lawyers and doctors involved in this are awful people who have no business practicing law or medicine. The lawyers involved certainly acted unethically and did things I personally would never even think about, but they also do not represent the vast majority of lawyers who represent injured people. Those attorneys make it easier for people to stereotype attorneys as sleazy so I want to make it clear those attorneys are despicable and unprofessional and I want to do what I can to help keep that stereotype from spreading since it's false.

An article on CNNMoney sums up how the scheme worked for the Las Vegas "medical mafia".

Prosecutors charge that a group of top Las Vegas plaintiffs lawyers and doctors, with the 64-year-old Awand at its center, conspired in an audacious fraud. The participants appeared to act independently but instead colluded. Unwitting accident victims were recruited as plaintiffs and then persuaded to undergo serious, sometimes needless, surgeries. The procedures, in turn, helped inflate the size of personal-injury claims. The result was multimillion-dollar insurance settlements, even for dubious cases, and lucrative fees for the doctors, the lawyers, and, of course, Howard Awand.

The alleged scheme began in 1999 and lasted for at least six years, prosecutors charge. Business and court records and local press reports suggest that the group -- which numbered about 30 -- colluded in hundreds of suits that yielded hundreds of millions in settlements. According to government evidence, the group coordinated their testimony as expert witnesses, lied under oath, protected one another from malpractice lawsuits -- even after the surgeries left a few patients paralyzed -- and ate away at the plaintiffs' settlement money with kickbacks disguised as contingency fees.

The case that finally got them caught involved Cynthia Johnson and her relatively minor auto accident.

Cynthia Johnson, an office manager for a real estate company, was driving to work on Interstate 15 near the Las Vegas strip when a fellow commuter clipped the rear bumper of her Toyota Avalon, propelling it into the truck in front. No one seemed hurt, and the drivers exchanged information.

The accident, on June 12, 2002, might have been forgotten. But Johnson woke up the next day with back pain. She went to her regular doctor but was told that she'd have to pay all her treatment costs upfront, since a car accident could result in lawsuits and her health insurance might not cover her. Worried about the costs, she consulted a physician friend, who pledged to find someone to help her.

No more than 30 minutes later she got a call from a man named Howard Awand, who said he was in the business of handling such cases. Awand (pronounced AY-wand) managed to get her an appointment that night with one of the busiest spine surgeons in the country, Mark Kabins. After examining her, the surgeon referred her to several other doctors and said that Awand had also arranged for her to see one of the town's most prominent plaintiffs attorneys, Robert Vannah. All for a routine accident on the way to work. Johnson couldn't believe her luck.

Better still, she didn't have to pay any money upfront. On her first visit to Vannah's office, she signed a medical lien. Such agreements mean injured parties pay nothing unless they collect a settlement; if that happens, the person holding the lien (which could be a plaintiffs lawyer, a doctor, or a hospital) is then paid from the settlement. "Over the next six weeks, I had so many doctor's appointments that I couldn't keep up," recalls Johnson, who was grateful for the attention but also confused by a directive from Vannah's office: Don't mention Howard Awand's name to anybody.

Awand is the thread that ties all of the players together. He was the one at the center of the alleged conspiracy, getting injured people doctor appointments and an attorney. In the end, the lawyer would pay back the doctors who helped provide falsified medical records or who helped pin the blame on the wrong doctor. This unethical behavior between the doctors and lawyers eventually got so big that the federal government took notice. It's not hard to believe that would happen when you are talking about hundreds of cases and millions of dollars, with all of the cases working out just right for the plaintiff.

The scheme began to unravel when Dr. Thalgott decided he wanted out. Melodie Simon, 41, had vertebrae fusion surgery performed by Dr. Thalgott in August 2000, afterwords he went on a preplanned vacation. Ms. Simon developed numbness and tingling related to a blood clot in her spine. Dr. Kabins, the surgeon who was supposed to be covering Dr. Thalgott's patients while he was on vacation, allegedly ignored the complaints until it was too late, Ms. Simon would be paralyzed from the chest down for the rest of her life.

Ms. Simon hired Noel Gage to represent her, and Mr. Gage then worked with Dr. Thalgott, Mr. Awand, and Dr. Kabins to pin the blame on the anesthesiologist who had drained Ms. Simon's spine during the surgery. As a result of the coordinated effort, Mr. Gage settled the case for 2 million. While that is a huge amount by most standards, had Ms. Simon been able to sue Dr. Thalgott or Dr. Kabins, it would likely have settled for closer to 10 million. That is a significant difference to someone who is paralyzed for the rest of their life due to a doctors medical malpractice.

After Dr. Thalgott had a change of heart on his unethical practices, he agreed to pay Ms. Simon 1.5 million for the trouble he caused. He is still being investigated by the county and state medical boards for the problems he helped create by falsifying records and providing questionable treatments. Although Dr. Thalgott was provided immunity for his testimony, there has yet to be a conviction against Gage, Awand or Kabins at this time. The legal proceedings continue at this time against all of them, and it's best to read the litany of articles that exist if you want a more detailed picture of what is exactly happening currently.

This is an unfortunate situation that ended up harming the people the lawyers and doctors were supposed to be helping. They all claim innocence on the allegations, but I am hopeful they will get what's coming to them. It is deplorable for people to prey on the innocent and weak at their most vulnerable, and to so completely and utterly exploit them for sinister motives and financial gain. I have nothing but contempt for the so-called professionals caught in this situation.

Originally posted at InjuryBoard by Devon Glass

Rick Scott: Health Care Reform Opponent

Devon Glass — Tue, 21 Jul 2009 10:32:33 GMT

Rick Scott, a name you might not have heard too commonly, if at all, is a name that everyone should be watchful of during this era of health care reform. He is much more conservative on the issue of health care reform than the Republican Party. He is the master mind behind a 20 million dollar deal trying to squash President Obama’s health care reform. Scott, the would be spokesperson of his own version of health care reform, is arguable the antithesis of positive reform.

Defraud and Rick Scott should never be more than four words apart in any sentence. Scott, while bolstering himself as an advocate of patient’s rights, helped found a for-profit hospital chain that had a habit of defrauding the government for hundreds of millions of dollars. Scott argued that health care reform was happening in the market place, not in the government. Scott was on a mission to put nonprofit hospitals out of business, stating that no health care reform was taking place in these “nontax paying’ hospitals”

The only thing that Scott’s hospitals reformed was their book keeping practices. This chain of for profit hospitals would keep two sets of financial records. An internal copy, which actually documented the hospitals expenses, and an external (government) copy, which inflated the hospital’s costs and expenses. Scott’s hospitals also over exaggerated patient’s illness and gave doctors kickbacks if they worked with this system.

Scott’s plans of future health care reform seem just as misguided as his past. Scott was recently quoted as saying “Congress wants to spend all that cash on a plan nobody wants”. The truth of the matter is that approximately 69% of Americans are actually in favor of a Government Health Care Option, more commonly known as the public option. It appears Scott thinks most Americans are nobodies.

The public option, or as Scott states “a nice way of saying ‘government run’ health care,” would actually be an improvement on premiums to the public, estimated at 23 percent lower price than similar private premiums. Scott’s for profit hospitals have made their money from the private health care field, so the opposition to the public option seem to be purely self involved.

Rick Scott has been very careful to hide his past while voicing opposition to this idea of health care reform. When making an informed decision about your opinion as to the issue health care reform, be sure to research not only the facts, but those who are giving you the facts. Do not be swayed by Scott’s ad campaigns or inflated statistics. Because as we have seen, Rick Scott seems to do a great job of inflating statistics.

Originally posted at InjuryBoard by Devon Glass

Estech settles lawsuit over bogus Medicare claims and false advertising for $1.4 Million

David Mittleman — Fri, 17 Jul 2009 14:50:00 GMT

Endoscopic Technologies, Inc. or Estech recently settled a lawsuit for $1.4 million after the Food and Drug Administration accused the company of violating the Food, Drug and Cosmetic Act and the False Claims Act. Specifically, the FDA accused Estech of falsely marketing its product, and of encouraging bogus Medicare claims as well as paying kickbacks to healthcare providers.

The San Ramon, California company makes medical devices for surgical ablation, where focused energy is used to create scar tissue on a patient’s heart or other organs. However, Estech also marketed its product to treat atrial fibrillation (the most common type of heart arrhythmia), which was not a use of the device that was approved by the FDA. Furthermore, Estech promoted costly heart surgeries to increase use of their product, when other less invasive treatments were more appropriate. The company also advised doctors to classify surgical procedures using the devices to increase Medicare payments and paid kickbacks to health-care providers who used it devices.

The allegations were made in a lawsuit filed in the U.S. District Court for the Southern District of Texas by a private citizen, under the qui tam provisions in the False Claims Act. Under these specific provisions of the act, private citizens may act as “relators” who can bring lawsuits on behalf of the U.S. and receive a portion of the settlement award. In this case, the relator will receive $210,000 as their share of the settlement. However, Estech denies the accusations and has not admitted any wrongdoing in the settlement.

Originally posted at InjuryBoard by David Mittleman

Ex HealthSouth CEO Ordered to Pay $2.8 Billion to Shareholders in Civil Suit

David Mittleman — Sun, 28 Jun 2009 12:56:02 GMT

Richard Scrushy, former HealthSouth CEO, will finally have to pay the price for his primary role in the company's notorious accounting and fraud scandal. Although Scrushy was acquitted back in 2005 on criminal charges, an Alabama court judge ordered Scrushy to pay shareholders $2.8 billion, supporting the shareholders' claims that Scrushy used the company's money for his personal expenses.

Scrushy is currently serving a seven-year prison term for a bribery case and was sued by the company’s shareholders for nearly sending the healthcare company into bankruptcy. The company stated that they are satisfied with the outcome of the civil suit, and that the money represents a 40% recovery of their net losses.

HealthSouth continues to operate in 26 states and in Puerto Rico as the largest provider of inpatient rehabilitative health-care services.

Originally posted at InjuryBoard by David Mittleman

Department of Justice Cracks Down on Insurance Fraud

David Mittleman — Fri, 26 Jun 2009 17:34:25 GMT

The U.S. Department of Justice has announced that the former managing pharmacist of a New Jersey pharmacy has pleaded guilty to submitting fraudulent claims to health insurers. Ruben Aguilar admitted to conspiring with others to submit claims for prescriptions that the pharmacy never dispensed over a five-year period spanning from 2002 to 2007. Aguilar could serve up to five years in prison and be forced to pay a hefty fine.

Among the many insurers that fell victim to the fraud was the federal Medicaid program, which insures low-income individuals in conjunction with certain state Medicaid programs. Medicaid and Medicare, which insures those over 65 years old and certain other qualifying individuals, are frequent targets of attempted fraud. The Department of Justice has partnered with the U.S. Department of Health and Human Services to prevent waste and abuse in the system. The goal is to keep the cost of these federal programs down, thus saving money and improving the quality of services provided.

Aguilar’s plea came on the same day as a major health care fraud sting operation resulted in the arrests of 53 individuals, including doctors, executives, and beneficiaries, in the Detroit area. In addition, eight Miami-area residents were arrested today on similar charges.

These recent arrests are a clear indication of the administration’s aggressive policy of attacking Medicaid and Medicare fraud. If you become aware of fraudulent activity, you can report it by e-mailing HHSTips@oig.hhs.gov or by calling 1-800-HHS-TIPS.

Originally posted at InjuryBoard by David Mittleman

Going Off-label, Again

David Mittleman — Sat, 07 Mar 2009 09:36:00 GMT

Forest Laboratories is the latest drug maker being charged with defrauding federal and state governments of millions of dollars by illegally marketing two of it’s medications, Celexa and Lexapro, for unapproved uses in kids.

Federal prosecutors alleged in their civil complaint that former top executives at Forest concealed a clinical study that showed that the medications were ineffective in children and might even pose risks, including suicidal tendencies.

Forest aggressively marketed results from an internally financed clinical trial which showed that the medications were safe and effective, without providing the negative study to those scientists, its own sales representatives or its medical advisors.

By failing to disclose the negative clinical trial results, Forest was able to deceive prescribing doctors and the public as to the potential risks involved in using the treatments. Off-label prescribing is a widely used and legal practice, whereby doctors are free to prescribe medications to patients for whom those drugs are not approved by federal regulators. However, it is illegal for drug makers to actively promote such uses.

The government is seeking treble damages against Forest for the amount of money spent by federal programs to pay for pediatric prescriptions of Celexa and Lexapro. Prosecutors have also alleged that Forest used pay-offs, in the form of baseball tickets and gift cards to pricey restaurants, to doctors who played ball--some even received paid vacations. The complaint also charges that Forest ran seeding studies, or trials that were used as marketing tools to promote the drugs. Lexpro is Forest’s biggest product, with sales totaling $2.3 billion in 2008.

Originally posted at InjuryBoard by David Mittleman

The IRS warns of Tax Preparer Fraud

Timothy Smith — Wed, 28 Jan 2009 15:51:34 GMT

It's that time of year. We start gathering our tax documents and sharpening our pencils as we hope for the best. For those that use a tax preparer, be advied: the IRS is already issuing warnings.

The main warning is more of a reminder that the individual, not the tax preparer is responsible if a fraudulent return is submitted under their name.

What does this mean? It means penalties and interest will be owed by the individual, even if they had no idea that their tax preparer committed fraud.

The IRS is quick to point out that most tax preparers are honest, but for those that aren't, why would they do this? I'm not sure, but a fat refund means a fat bill to the client. If the refund was obtained through a fraudulent return, you have problems.

According to the IRS Criminal Investigation Division, in 2008, there were 214 investigations of what was thought to be tax preparer fraud. This brought about 142 indictments and 124 of the tax preparers were convicted and sentenced.

Jail Time? You bet. An average of 18 months.

So what is a consumer to do when they find out their tax preparer has committed fraud and now they are on the hook for return of their refund, and penalties and interest? Well, you need to deal with the IRS immediately. You owe it and there is no way around it. You'll need to work out a payment plan of sort with the IRS and, in the meantime, put the tax preparer and his/her firm on notice of your claim. Even though you have to pay the IRS what is owed, you should be able to get reimbursed from the tax-preparer and/or his office.

Click here for some tips from the IRS on selecting a tax preparer

Originally posted at InjuryBoard by Timothy Smith

Doctors: Starting to Figure it Out?

David Mittleman — Mon, 26 Jan 2009 14:04:26 GMT

It’s not the trial lawyers they have to fear and hate - it’s the insurance industry. A pediatrician has filed a federal class-action lawsuit against Hometown Health Plan and Renown Health, claiming they bilked thousands of Nevada doctors out of tens of millions of dollars by failing to pay claims, manipulating payment codes, and forcing the doctors into one-sided contracts.

Dr. Kevin Windisch of Sparks Pediatric & Adolescent Medicine says, "Those behaviors drive doctors out of business, and other doctors won’t come to this community because of it." According to Dr. Windisch, the loss of good doctors ultimately hurts the patients, some of whom may lose longtime family physicians because of the insurance companies’ behavior.

In addition to seeking compensatory and punitive damages, the suit asks the court for an injunction preventing the companies from engaging in these improper practices that adversely affect the doctors and their patients.

Recently,UnitedHealthcare agreed to pay $350 million in a settlement between the company and 40 states. UnitedHealth is the biggest U.S. health insurer. The payment is as a result of the healthcare giant defrauding its members by underpaying and manipulating reimbursements made to doctors and patients. Under the terms of the agreement, UnitedHealth has agreed to set up an independent database to reduce the likelihood of a repeat offense.

If you or someone you know has been a victim of insurance abuse, contact us. Our firm has been fighting insurance companies for over 50 years. Know your rights, let us protect them.

Originally posted at InjuryBoard by David Mittleman