Headlines that Matter for Companies and Executives in Regulated Industries
DOJ’s FCA Recoveries Were Lowest Level Since 2008
On February 7, 2023, the US Department of Justice (DOJ) released statistics about False Claim Act (FCA) settlements and judgments for the 2022 fiscal year. Total recoveries for FCA litigation were at just $2.2 billion, which is the lowest level since 2008 and a steep drop from the nearly $5.7 billion recovered in the 2021 fiscal year.
Although the dollar amount recovered may be the lowest in recent memory, DOJ noted that the government and whistleblowers were party to over 350 FCA settlements and judgments, representing the second-highest number of settlements and judgments in a single year. According to Brian Boynton, head of DOJ’s Civil Division, “The large number of settlements and judgments this past year demonstrates that the [FCA] remains one of the most important tools for ensuring that public funds are spent properly and advance the public interest.”
Of the more than $2.2 billion in FCA-related recoveries, more than half related to matters involving the health care industry, including drug and medical device manufacturers, durable medical equipment, home health and managed care providers, hospitals, pharmacies, hospice organizations, and physicians. Other matters were related to protecting service members and first-responders, COVID-related fraud (particularly involving improper payments under the Paycheck Protection Program), cybersecurity and cyber fraud, and other fraud.
DOJ’s press release is available here.
Ohio Neurologist Sentenced to 2.5 Years for Role in Kickback Scheme
On February 3, 2023, Dr. Deepak Raheja, a Cleveland-area neurologist was sentenced to two and a half years in federal prison and fined $50,000 for participating in a scheme to bribe doctors to prescribe Nuedexta, a neurological medication manufactured by Avanir Pharmaceuticals Inc. Raheja was also ordered to pay more than $2.1 million in restitution.
According to prosecutors, Raheja and others received kickbacks for writing prescriptions for Nuedexta, including for patients who did not need the drug. Raheja allegedly received over $330,000 from Avanir between 2011 and 2016 and wrote over 10,000 prescriptions for Nuedexta — making him the highest prescriber in the country, per DOJ — during that time. Between 2011 and 2016, Raheja gave over 200 presentations as part of Avanir’s speaker’s bureau and received about $1,500 for each presentation.
Raheja pled guilty to one count of conspiracy to solicit, receive, offer, and pay health care kickbacks. As part of the plea agreement, Raheja agreed to surrender his medical license, but he has already appealed his plea, conviction, and sentence.
DOJ’s press release is available here.
Former Coinbase Employee Pled Guilty to Insider Trading
On February 7, 2023, Ishan Wahi, a former Coinbase product manager, pled guilty to helping others buy digital tokens based on confidential information about the crypto-exchange’s upcoming listings.
In particular, Wahi admitted to passing inside information to his brother and a college friend about crypto tokens that he knew would soon be listed on the exchange, allowing them to make $1.5 million through illicit trades. Wahi’s brother previously pled guilty to conspiracy and was sentenced in January to 10 months in prison. Wahi’s college friend — Sameer Ramani — who was charged in the case, remains at large. A parallel US Securities and Exchange Commission action against the Wahi brothers and Ramani is still pending.
Wahi pled guilty to two counts of conspiracy to commit wire fraud, which each carry a maximum sentence of 20 years in prison. Wahi is scheduled to be sentenced on May 10, 2023.
DOJ’s press release is available here.
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