Whistleblower lawsuit leads to federal complaint against CEOs
The U.S. Justice Department on April 4, 2022, said it has filed a complaint alleging False Claims Act violations by two laboratory CEOs, one hospital CEO and other individuals and entities.
The United States filed its complaint in a lawsuit originally filed under the qui tam or whistleblower provisions of the False Claims Act.
According to the United States’ complaint, laboratory executives and employees at True Health Diagnostics LLC (THD) and Boston Heart Diagnostics Corporation (BHD) allegedly conspired with small Texas hospitals, including Rockdale Hospital doing business as Little River Healthcare (LRH), to pay doctors to induce referrals to the hospitals for laboratory testing, which was then performed by BHD or THD.
The complaint alleges that the hospitals paid a portion of their laboratory profits to recruiters, who in turn kicked back those funds to the referring doctors.
The United States’ complaint also alleges that various THD employees, including THD’s CEO, participated in schemes to pay other forms of kickbacks.
“Paying kickbacks to physicians distorts the medical decision-making process, corrupts our healthcare system and increases the cost of healthcare funded by the taxpayer,” said U.S. Attorney Brit Featherston for the Eastern District of Texas. “Laboratories, marketers and physicians cannot immunize their conduct by attempting to disguise the kickbacks as some sort of investment arrangement. Our office is committed to looking through the disguise and putting an end to any arrangement where the purpose is to improperly influence medical decision making through the payment of kickbacks.”
The original whistleblower lawsuit was filed by STF LLC, whose members are Dr. Felice Gersh M.D. and Chris Riedel. Under the act, a private party can file an action on behalf of the United States and receive a portion of the recovery. The act permits the United States to intervene in such lawsuits and add claims and defendants, as it has done here.
The Justice Department said its pursuit of this lawsuit illustrates the government’s emphasis on combating healthcare fraud.
Scott Williams, CEO of Ethic Alliance, noted that the Justice Department’s complaint illustrates why potential whistleblowers should contact Ethic Alliance.
“Healthcare fraud is a multi-billion dollar annual problem in the US. The scope is so broad that no single enforcement body can keep up; they rely on individuals like Dr. Gersh and Chris Riedel to have the courage to do the right thing and reward them for doing so. Working with experienced attorneys and professionals that have a history of working with the Justice Department and other government entities is critical for success,” said Williams.
Ethic Alliance is a for-profit corporation and law firm whose purpose is to empower, educate and protect whistleblowers, ensuring they receive the protection they need and the rewards they are entitled to under US law (the US government will typically reward whistleblowers 10%-30% of the amount recovered or sanctioned under various whistleblower laws), generating profits for investors while reducing corruption, fraud, theft, lying and cheating in our society.
Ethic Alliance protects whistleblowers through a secure, encrypted reporting and messaging platform, attaching the strong legal protection of attorney-client privilege from the moment a report is filed, and access to a network of specialty attorneys that have made careers protecting and supporting whistleblowers, and working with the US government to win whistleblower lawsuits.
Contact Ethic Alliance at info@ethicalliance.com
Related link: https://www.justice.gov/opa/pr/justice-department-files-false-claims-act-complaint-against-two-laboratory-ceos-one-hospital
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