Powerful Whistleblower Attorney: US Protection and Bounty System Helps Root Out Financial Scandal

This article was written by Lianna Brinded, Business Editor for the International Business Times on September 25, 2013.

One of the world’s most prominent whistleblower attorneys tells IBTimes UK about the differences between US and UK whistleblower protection.

The only way to prevent and root out large scale financial and company scandals is by installing bounty programmes and protection systems that reward those who risk their careers to flag up wrongdoing, says one of the world’s most prominent whistleblower attorneys.

In the US, there are a number programmes, such as ones with the US Internal Revenue Service (IRS) and the Securities Exchange Commission (SEC) coupled with the protection through the Dodd-Frank Act, since 2010.

The programmes allow whistleblowers to not only be rewarded for information, depending on the significance of information and how much it results in recovery for the government or shareholders, but also protects them employer retaliation, such as dismissal or being investigated themselves.

However, the UK lags behind rewarding or protecting whistleblowers.

Reuben Guttman is one of the world’s most prominent whistleblower attorneys and a co-founder of Guttman, Buschner & Brooks PLLC in Washington DC. He has served as counsel in some of the largest recoveries under the False Claims Act and has recovered billions of dollars for the government from fraudulent mortgage assignments and a number of pharmaceutical firms.

In 2012, he represented one of the four main whistleblowers in a case against GSK that returned over $3bn to the government and here he speaks with IBTimes UK exclusively.

China’s Pharmaceutical Bribery Scandal is ‘Tip of the Iceberg’

Chinese authorities are cracking down on its pharmaceutical sector after officials revealed that four China-based senior executives at British drugmaker GlaxoSmithKline had channelled millions of pounds in bribes through travel agencies and consultancies.

Reuben Guttman is one of the world’s most prominent whistleblower attorneys who practice with Guttman, Buschner & Brooks PLLC in Washington DC. He has served as counsel in some of the largest recoveries under the False Claims Act and has recovered billions of dollars for the government from fraudulent mortgage assignments and a number of pharmaceutical firms.

In 2012, he represented one of the four main whistleblowers in a case against GSK that returned over $3bn to the government and here he speaks with IBTimes UK exclusively.

(Source: International Business Times at http://www.ibtimes.co.uk/articles/508530/20130924/gsk-china-pharmaceutical-scandal-bribery-whistleblower.htm)

See the full interview. . .

Guttman & Buschner Represent Whistleblowers in Justice Dept. $257 Million Civil Settlement with Wyeth over Unlawful Marketing of Rapamune

Pfizer subsidiary pleads guilty to off-label marketing of powerful immunosuppressent Rapamune; settlement latest in series of major off-label whistleblower cases against Abbott, GlaxoSmithKline and Amgen

WASHINGTON, DC (July 30, 2013) – Leading whistleblower attorneys Reuben Guttman and Traci Buschner of Guttman, Buschner & Brooks PLLC represented two key whistleblowers behind a $257.4 million settlement announced today between drugmaker Wyeth Pharmaceuticals, a subsidiary of Pfizer, and the U.S. Department of Justice stemming from alleged marketing abuses of Wyeth’s powerful immunosuppressant drug Rapamune. The case was originally brought by  Marlene Sandler and Scott Paris, both of whom were sales representatives for the company.

Today’s blockbuster settlement of the whistleblower case was originally panned by the Justice Department, but raised the ire of a Congressional oversight committee in 2010.

The case, filed under seal in 2005 in U.S. District Court for the Eastern District of Pennsylvania, led to an investigation by the Justice Department and multiple states into abusive marketing practices related to Rapamune, which is primarily approved by the FDA for individuals following kidney transplants to help the body prevent organ rejection. On Dec.3, 2006, the DOJ filed a formal notice with the Eastern District declining to intervene in the case.

Guttman and Buschner continued to move forward with the case, and filed an amended complaint on behalf of the whistleblowers on May 24, 2010 ─ which spurred a formal inquiry by the U.S. House of Representatives Committee on Oversight and Government Reform, then chaired by U.S. Representative Edolphus Towns.

On Sept. 21, 2010, the Justice Department intervened in the case and transferred it to the U.S. the District Court for the Western District of Oklahoma in Oklahoma City, where an investigation was initiated with regard to claims brought by a third whistleblower.

The settlement agreement notes the broad scope of Wyeth’s alleged unlawful marketing of Rapamune for well over a decade, spanning from September 1999 to December 2011:

Wyeth (a) knowingly promoted the sale and use of Rapamune for uses for which it had not been approved by the United States Food and Drug Administration (FDA), including for use in connection with solid organ transplant patients other than kidney transplant patients, which were not medically-accepted indications (as defined in 42 U.S.C. § 1396r-8(k)(6)), and were not covered by Medicare, Medicaid and other Federal health care programs; and (b) knowingly promoted the sale and use of Rapamune in treatment regimens that had not been approved by the FDA including the use of Rapamune with transplant patients who used another immunosuppressant drug before using Rapamune and the use of Rapamune in combination with certain types of products other than cyclosporine and corticosteroids.

Ms. Sandler and Mr. Paris were represented by Reuben Guttman and Traci Buschner. Mr. Guttman is one of the country’s preeminent whistleblower lawyers, having representing individuals in some of the largest pharmaceutical and financial services cases on record.

“Pfizer subsidiary Wyeth joins a parade of other pharma giants to plead guilty and pay significant penalties for unlawfully marketing their drugs,” said Mr. Guttman. “The abuses related to illicit marketing of Rapamune paint a disturbing portrait. Wyeth leadership placed a highly vulnerable patient population at serious health risk. Exposing those whom drug makers have pledged to heal to increased risk merits immediate congressional oversight. Hopefully, the settlement will prompt Congress to take action.”

Mr. Guttman continued: “Over the past five years, at least half a dozen pharma giants have paid fines for conduct that places patients in harm’s way, yet not a single individual has been held accountable. Our nation can no longer afford the expenditure for drugs that don’t work, cause additional harm and saddle the country with the long-term of obligation of paying for the medical care of victims. These cases are reported in terms of dollars but they are more about conduct that impacts patients and taxpayer.”

In the last three years, Guttman and Buschner have had unprecedented success representing lead whistleblowers in the government’s $1.6 billion settlement with Abbott (2012); its $1.04 billion settlement with GlaxoSmithKline (2012); and its $24.9 million dollar settlement with Amgen (2013). The firm also represented whistleblower Lynn Szymoniak, who first reported claims of robo-signing to 60 Minutes and whose allegations led to a $95 million settlement as part of the government’s historic $25 billion settlement with the country’s four largest banks (2012).

Mr. Guttman and Ms. Buschner currently represent several relators in an ongoing case, in which the government has intervened, against defense contractor LockheedMartin regarding alleged environmental noncompliance and mishandling of hazardous waste at the Paducah Kentucky Gaseous Diffusion Plant.

Q&A: Whistle-blower lawyer on Amgen settlement, False Claims Act

This interview with Reuben Guttman was conducted by journalist Terry Baynes with Thomson Reuters.

California-based drugmaker Amgen Inc agreed on Tuesday to pay $24.9 million to settle allegations that it provided kickbacks to long-term care pharmacy providers to entice them to switch patients to its anemia drug Aranesp. Whistle-blower Frank Kurnik, a longtime Amgen employee, and the Justice Department accused the company of giving pharmacy providers rebates based on their volume of Aranesp prescriptions.

Reuben Guttman, a lawyer at Guttman, Buschner & Brooks PLLC, who brought the lawsuit on behalf of Kurnik, said the case reflects how prosecutions under the False Claims Act are focusing on conduct higher up the corporate ladder.

Amgen declined to provide a lawyer to discuss the settlement. The company in a statement about the settlement denied all of the allegations.

Reuters asked Guttman about the case and developments in False Claims Act litigation. The questions and answers have been edited for brevity and clarity.

Reuters: What does the case reveal about the type of conduct coming under scrutiny in False Claims Act cases?

Guttman: Typically, you’re talking about kickbacks paid to doctors in a lot of these cases. Instead of going from doctor to doctor and hospital to hospital, Amgen allegedly orchestrated a scheme that paid kickbacks to long-term care pharmacy providers who influenced prescriptions at nursing homes. The case showed how decisions about patient care are being made hundreds of miles away, at a corporate level. Healthcare fraud schemes orchestrated at a corporatewide level are schemes that are going to draw more prosecutorial focus.

Reuters: What were some of the biggest challenges in bringing the case?

Guttman: Typically, in cases like this, you’re talking about numbers of witnesses who can testify to specific kickbacks paid to doctors. This was more complicated, which is why it’s significant. We had to show that the contractual relationships with these long-term care pharmacy providers were actually orchestrated to engage in unlawful conduct. It involved the aggregation of documents and testimony. The challenge is to dig down and show how the schemes are implemented.

Reuters: Was there anything unusual about the case?

Guttman: In comparison to other pharmaceutical cases, this one had a short lifespan. False Claims Act cases can last for more than five years. This one was filed in 2010 and resolved in 2013. That’s light speed for the investigation and resolution of a pharmaceutical case of any magnitude.

Reuters: What explains the faster timeline in this case?

Guttman: The Justice Department is getting more aggressive about investigating these cases. In addition, recent amendments to the False Claims Act give the government more expansive use of “civil investigative demands” before intervening in a case to obtain documents, which they can share with the whistle-blower’s lawyers. That has created new paradigms of government and whistle-blower lawyers working together in reviewing documents. Efficiencies from changes in the law allow cases to move quicker.

Reuters: Is the Justice Department intervening in these cases more often?

Guttman: It really depends on the evidence that’s brought to the Justice Department and the way in which the case is presented. Last year, the Justice Department got about 700 false claims cases. It gets harder and harder for the Justice Department to investigate cases when there are so many cases being filed. If the case is well documented, if the whistle-blower has sufficient facts and is credible, and the whistle-blower’s counsel is present and can present a case, there’s a greater chance of intervention.

Reuters: How is the role of the whistle-blower lawyer changing?

Guttman:
Lawyers for whistle-blowers have to anticipate that when they file a case, they’ll have to see that case through to trial. The frauds are more complex. Even where the case is a great one, you can’t count on the government intervening due to the number of fraud cases being filed. There’s a role for the whistle-blower lawyer who’s willing to be active, work with experts and cooperate with the government in pursuing cases. The government is going to be looking for mechanisms to leverage their resources.

Reuters: Does the case change if or when the government intervenes?

Guttman: Defendants act differently if the government is involved or not. There’s a fear factor that the government is bearing down on you.

$24.9 Million Settlement with Biotechnology Company Amgen, Inc. Resolves South Carolina False Claims Act Lawsuit

PRESS NOTICE
BILL NETTLES
UNITED STATES ATTORNEY
DISTRICT OF SOUTH CAROLINA
1441 Main Street, Suite 500 * Columbia, SC 29201 * (803) 929-3000

April 16, 2013
FOR IMMEDIATE RELEASE
CONTACT PERSON: Fran Trapp
(803) 929-3000
Fran.Trapp@usdoj.gov

COLUMBIA, South Carolina —-United States Attorney Bill Nettles announced a $24.9 million settlement with Amgen, Inc., a California based biotechnology company. Amgen, Inc. agreed to the settlement to address allegations it paid kickbacks to long-term care pharmacy providers Omnicare Inc., PharMerica Corporation, and Kindred Healthcare Inc. in return for implementing “therapeutic interchange” programs that were designed to switch Medicare and Medicaid beneficiaries from a competitor drug to Aranesp. The Government alleged that the kickbacks took the form of performance-based rebates on Aranesp. As part of that program, the Government alleged that Amgen distributed materials designed to recommend Aranesp’s use in patients who did not have “anemia associated with chronic renal failure,” as specified in the approved labeling for Aranesp.

The Government alleged that the kickbacks took the form of performance-based rebates on Aranesp.

The District of South Carolina began investigating these False Claims Act allegations in the summer of 2010. In particular, the investigation focused on whether Aranesp was marketed to patients, many of whom were in skilled nursing facilities, who did not have “anemia associated with chronic renal failure.”

The False Claims Act allows the government to bring civil actions against entities that knowingly use or cause the use of false documents to obtain money from the government or to conceal an obligation to pay money to the government. The lawsuit in this case was initially filed by an Amgen employee under the qui tam or whistleblower provision of the False Claims Act. This provision entitles a private person to bring a lawsuit on behalf of the United States, where the private person has information that the named defendant has knowingly violated the False Claims Act. Under the False Claims Act, the private person, also known as a “whistleblower,” is entitled to a share of the government’s recovery. In this matter, the whistleblower shall receive over $3 million from the proceeds of the settlement.

“By this agreement we are making important strides in holding drug manufacturers accountable for fraudulent and abusive practices not only in South Carolina, but nationwide. I am proud of the tireless work of this office to investigate this case across the country,” said U.S. Attorney Nettles.

This settlement was the result of a coordinated effort by Assistant United States Attorneys Fran Trapp and James Leventis of the U.S. Attorney’s Office for the District of South Carolina, along with the Commercial Litigation Branch of the Justice Department’s Civil Division, FDA’s Office of Inspector General, HHS’s Office of Inspector General, and Defense Criminal Investigating Service, who diligently worked to investigate the allegations and litigate the case.

The whistleblower was represented by South Carolina attorney Richard Harpootlian along with Reuben Guttman and Traci Buschner, of Guttman, Buschner & Brooks PLLC.

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