Cases in Court

In order to resolve a Texas Medicaid fraud case, Dey, Inc., a wholly owned subsidiary of Merck KGaA and California-based prescription manufacturer of drugs used to treat allergies and respiratory diseases, agreed to pay$18.5 million to settle allegations that it submitted false pricing information to the Texas Vendor Drug Program and caused providers to submit fraudulently inflated reimbursement claims to Texas Medicaid.

On June 11, 2003, the Department of Justice announced that the Texas Attorney General's Office originally filed this suit against Dey and two other drug manufacturers. A press release is posted at www.usdoj.gov/opa/pr/2003/June/03_civ_350.htm

CEO of San Diego Tenet Facility Indicted by Federal Grand Jury

Barry Weinbaum, the Chief Executive Officer of Alvarado Hospital Medical Center, San Diego, was named in an eight-count indictment for making illegal payments to physicians to induce patient referrals to the hospital, according to a June 6, 2003, announcement by the U.S. Attorney's Office for the Southern District of California. According to the charges, Weinbaum paid over $10 million to physicians who agreed to relocate their practices to the hospital's service area. Also identified in the indictment is Dr. Paul Ver Hoeve, a primary care physician who had a large Medicare patient base, as being one of the physicians who received illegal remunerations from the hospital. A press release is posted at Alvarado Hospital is owned by Tenet Healthcare Corporation. In 1994, Tenet (f/k/a National Medical Enterprises), entered criminal guilty pleas and paid the United States $325 million to settle an investigation into paying illegal remunerations to physicians to induce referrals to certain psychiatric hospitals. It also agreed to implement a corporate integrity program to prevent future violations.

Qui Tam Whistleblower Seeks to Have Declaratory Action Dismissed

A Washington State physician, Dr. Mauricio Leon, Senior Director, Medical Informatics, announced he had moved to dismiss a Declaratory Judgment action filed by IDX on April 25, 2003 asking the federal court in Seattle to hold that it could fire him without violating the federal False Claims Act and the new anti-retaliatory provisions (which include a criminal statute) of the Sarbanes-Oxley Act of 2002. According to a June 9, 2003, PR Newswire report, Dr. Leon filed a whistleblower suit against IDX on May 20, 2003, that seeks to dismiss the IDX action.

Pennsylvania Health care Network Settles PATH Case for Nearly $2 Million

The Albert Einstein Healthcare Network reached a settlement with the government in which, although denying its liability, the company agreed to pay $1.98 million to the government to settle civil False Claims Act allegations arising from an investigation and audit conducted by the Department of Health and Human Services as part of its PATH (Physicians At Teaching Hospital) initiative. The announcement was released on May 28, 2003, by the U.S. Attorney's Office for the Eastern District of Pennsylvania. A press release is posted at www.usao_edpa.com/Pr/2003/may/einstein.html

Miami Resident Receives Lengthy Prison Term for Insurance Fraud Scheme

On May 22, 2003, the Miami Herald reported that Idania C. Arias of Miami had been sentenced to serve more than 10 years' imprisonment for having orchestrated a $7 million insurance fraud scheme that involved getting physicians to sign blank prescriptions and having pharmacists concoct doses of a toxic and medically unnecessary compound for patients. According to the news report, Arias was considered the lead defendant among eight doctors, pharmacists and family-owned medical-equipment supply company owners who were convicted in July 2002, following a 5-month trial in which 26 South Florida residents were convicted. At sentencing, Arias reportedly blamed her ex-husband and former co-defendant, Jose Arias, for leading the fraud. Mr. Arias, who plead guilty and cooperated with prosecutors by testifying at the trial, received a 6 '-year prison term.

New York Eye Doctor Pleads Guilty to Defrauding Medicare

On the eve of jury selection, Dr. Shaul Debbi pled guilty to defrauding Medicare of about $1 million in a billing scheme that preyed on hundreds of mentally ill people living in adult homes. Debbi had been arrested last year for allegedly performing unnecessary eye surgery on patients at the Leben Home for Adults in Queens, NY. According to the government, as reported on May 20, 2003, in the New York Daily News, patients at Leben and other facilities line up to see Dr. Debbi, who, the government contends, billed Medicare for hundreds of medically unnecessary procedures, including glaucoma tests and cataract surgery.

Florida Eye Surgeon Receives Lengthy Prison Term for Medicare Fraud

Eye surgeon Gustavo E. Coll of Coral Gables, FL, was sentenced to federal prison for 57 months as a result of 90 counts of Medicare fraud for billing the Medicare program approximately $1 million for services not provided or which were not medically necessary. In addition, Dr. Coll was ordered to pay approximately $792,952 in restitution. In a May 20, 2003, announcement, the U.S. Attorney's Office for the Southern District of Florida reported that the judge found Dr. Coll had recklessly created a risk of serious bodily injury to patients by placing medically unnecessary laser burns in their eyes, and obstructed justice by perjuring himself at trial. The government alleged that Dr. Coll had fabricated medical charts and billing records, claiming to have conducted various diagnostic tests and laser eye surgeries, then submitted hundreds of false claims to Medicare seeking payment for tests and surgeries never rendered; moreover, many elderly Medicare patients were misled into believing that they had serious eye disease that they did not have.

U.S. Attorney's Office Files Civil False Claims Act Suit Against Southern California Hospital

On May 14, 2003, the U.S. Attorney's Office for the Southern District of California announced that the government had filed a civil False Claims Act suit against the former owners of Bayview Hospital, located in Chula Vista. According to the release, the government contends that Robert Bourseau, Rudra Sabaratnam and their corporate entities RIB Medical Management and Navatkuda schemed to defraud Medicare by submitting reimbursement claims for false and inflated costs on the hospital's cost reports (including $5 million in interest expenses not paid by Bayview, about $1.5 million in legal fees, over $1.2 million in management fees, and about $400,000 in lease expenses not incurred by Bayview). and making material misrepresentations that permitted them to keep funds to which Bayview was not entitled. The suit seeks to recover treble the damages of $7.7 million and civil penalties.

Florida Hospital Settles Medicaid Fraud Case

Jackson Memorial Hospital, a Miami-area facility, agreed to reimburse Florida Medicaid $16.9 million ($1.5 million of which will go to a whistleblower) for problems relating to billing practices at 12 primary-care clinics in Miami-Dade County. At issue was the payment of a 'facility fee' paid by the state Agency for Healthcare Administration (AHCA) meant to cover more comprehensive and costly services than those offered at regular doctors' offices. The report first appeared the May 14, 2003, Miami Herald.

Texas Jury Convicts Physicians of Health Care Fraud

Dr. James Mark Murphy and Joseph Robert Kirkham were convicted by a federal jury of health care fraud, 18 U.S.C. ' 1347, as charged in a one-count indictment. On May 12, 2003, the U.S. Attorney's Office for the Northern District of Texas announced that the government's witnesses established the defendants and others submitted fraudulent medical claims to numerous insurers from 1996 to 2000 through medical clinics that were operated in health clubs located in the Dallas-Fort Worth area. Patients testified that they never saw Dr. Murphy, but were billed for medical services that he did not provide or supervise. Mark Darner, a chiropractor who had pled guilty to mail fraud in connection with the filing of false medical claims in this matter testified that Dr. Murphy and Joseph Kirkham both knew about the fraudulent billings and participated in the submission of the fraudulent claims.

Bayer Corp. Sentenced to Pay Over $5.6 Million for Failure to List Drug with FDA

On May 9, 2003, the U.S. Attorney's Office for the District of Massachusetts announced that Bayer Corporation, had been sentenced to pay a criminal fine of $5.59 million after the company pled guilty to having failed to list its drug product, Cipro, with the Food and Drug Administration (FDA) with the intent to defraud or mislead ' a felony violation of the Food, Drug & Cosmetic Act. The guilty plea was part of a global settlement agreement between Bayer and the government in which the company is required to pay over $257 million to resolve criminal charges and civil liabilities in connection with a scheme commonly referred to as 'lick and stick,' in which BAYER sold relabeled products to an HMO at deeply discounted prices, and then concealed and avoided its obligation to pay millions of dollars in additional rebates to the Medicaid program. The government's investigation began in 2000 after a former manager at the company reported the private labeling arrangement to law enforcement authorities and filed a civil False Claims Act suit.

On June 11, 2003, the Department of Justice announced that the Texas Attorney General's Office originally filed this suit against Dey and two other drug manufacturers. A press release is posted at www.usdoj.gov/opa/pr/2003/June/03_civ_350.htmBarry Weinbaum, the Chief Exec- utive Officer of Alvarado Hospital Medical Center, San Diego, was named in an eight-count indictment for making illegal payments to physicians to induce patient referrals to the hospital, according to a June 6, 2003, announcement by the U.S. Attorney's Office for the Southern District of California. According to the charges, Weinbaum paid over $10 million to physicians who agreed to relocate their practices to the hospital's service area. Also identified in the indictment is Dr. Paul Ver Hoeve, a primary care physician who had a large Medicare patient base, as being one of the physicians who received illegal remunerations from the hospital. A press release is posted at Alvarado Hospital is owned by Tenet Healthcare Corporation. In 1994, Tenet (f/k/a National Medical Enterprises), entered criminal guilty pleas and paid the United States $325 million to settle an investigation into paying illegal remunerations to physicians to induce referrals to certain psychiatric hospitals. It also agreed to implement a corporate integrity program to prevent future violations. A Washington State physician, Dr. Mauricio Leon, Senior Director, Medical Informatics, announced he had moved to dismiss a Declaratory Judgment action filed by IDX on April 25, 2003, asking the federal court in Seattle to hold that it could fire him without violating the federal False Claims Act and the new anti-retaliatory provisions (which include a criminal statute) of the Sarbanes-Oxley Act of 2002. According to a June 9, 2003, PR Newswire report, Dr. Leon filed a whistleblower suit against IDX on May 20, 2003, seeking to dismiss the IDX action.The Albert Einstein Healthcare Network reached a settlement with the government in which, although denying its liability, the company agreed to pay $1.98 million to the government to settle civil False Claims Act allegations arising from an investigation and audit conducted by the Department of Health and Human Services as part of its PATH (Physicians At Teaching Hospital) initiative. The announcement was released on May 28, 2003, by the U.S. Attorney's Office for the Eastern District of Pennsylvania. A press release is posted at <a href="http://www.usao-edpa.com/Pr/2003/may/einstein.html"www.usao-edpa.com/Pr/2003/may/einstein.htmlOn May 22, 2003, the Miami Herald reported that Idania C. Arias of Miami had been sentenced to serve more than 10 years' imprisonment for having orchestrated a $7 million insurance fraud scheme that involved getting physicians to sign blank prescriptions and having pharmacists concoct doses of a toxic and medically unnecessary compound for patients. According to the news report, Arias was considered the lead defendant among eight doctors, pharmacists and family-owned medical-equipment supply company owners who were convicted in July 2002, following a 5-month trial in which 26 South Florida residents were convicted. At sentencing, Arias reportedly blamed her ex-husband and former co-defendant, Jose Arias, for leading the fraud. Mr. Arias, who pled guilty and cooperated with prosecutors by testifying at the trial, received a 6 1/2-year prison term.On the eve of jury selection, Dr. Shaul Debbi pled guilty to defrauding Medicare of about $1 million in a billing scheme that preyed on hundreds of mentally ill people living in adult homes. Debbi had been arrested last year for allegedly performing unnecessary eye surgery on patients at the Leben Home for Adults in Queens, NY. According to the government, as reported on May 20, 2003, in the New York Daily News, patients at Leben and other facilities lined up to see Dr. Debbi, who, the government contends, billed Medicare for hundreds of medically unnecessary procedures, including glaucoma tests and cataract surgery.Eye surgeon Gustavo E. Coll of Coral Gables, FL, was sentenced to federal prison for 57 months as a result of 90 counts of Medicare fraud for billing the Medicare program approximately $1 million for services not provided or which were not medically necessary. In addition, Dr. Coll was ordered to pay approximately $792,952 in restitution. In a May 20, 2003, announcement, the U.S. Attorney's Office for the Southern District of Florida reported that the judge found Dr. Coll had recklessly created a risk of serious bodily injury to patients by placing medically unnecessary laser burns in their eyes, and obstructed justice by perjuring himself at trial. The government alleged that Dr. Coll had fabricated medical charts and billing records, claiming to have conducted various diagnostic tests and laser eye surgeries, then submitted hundreds of false claims to Medicare seeking payment for tests and surgeries never rendered; moreover, many elderly Medicare patients were misled into believing that they had serious eye disease that they did not have. The release is posted at www.usdoj.gov/usao/fls/Gorrin.htmlOn May 14, 2003, the U.S. Attorney's Office for the Southern District of California announced that the government had filed a civil False Claims Act suit against the former owners of Bayview Hospital, located in Chula Vista. According to the release, the government contends that Robert Bourseau, Rudra Sabaratnam and their corporate entities RIB Medical Management and Navatkuda schemed to defraud Medicare by submitting reimbursement claims for false and inflated costs on the hospital's cost reports (including $5 million in interest expenses not paid by Bayview, about $1.5 million in legal fees, over $1.2 million in management fees, and about $400,000 in lease expenses not incurred by Bayview), and making material misrepresentations that permitted them to keep funds to which Bayview was not entitled. The suit seeks to recover treble the damages of $7.7 million and civil penalties. The release is posted at www.usdoj.gov/usao/fls/Gorrin.htmlJackson Memorial Hospital, a Miami-area facility, agreed to reimburse Florida Medicaid $16.9 million ($1.5 million of which will go to a whistleblower) for problems relating to billing practices at 12 primary-care clinics in Miami-Dade County. At issue was the payment of a 'facility fee' paid by the state Agency for Healthcare Administration (AHCA) meant to cover more comprehensive and costly services than those offered at regular doctors' offices. The report first appeared the May 14, 2003, Miami Herald.Dr. James Mark Murphy and Joseph Robert Kirkham were convicted by a federal jury of health care fraud, 18 U.S.C. ' 1347, as charged in a one-count indictment. On May 12, 2003, the U.S. Attorney's Office for the Northern District of Texas announced that the government's witnesses established the defendants and others submitted fraudulent medical claims to numerous insurers from 1996 to 2000 through medical clinics that were operated in health clubs located in the Dallas-Fort Worth area. Patients testified that they never saw Dr. Murphy, but were billed for medical services that he did not provide or supervise. Mark Darner, a chiropractor who had pled guilty to mail fraud in connection with the filing of false medical claims in this matter testified that Dr. Murphy and Joseph Kirkham both knew about the fraudulent billings and participated in the submission of the fraudulent claims.On May 9, 2003, the U.S. Attorney's Office for the District of Massachusetts announced that Bayer Corporation, had been sentenced to pay a criminal fine of $5.59 million after the company pled guilty to having failed to list its drug product, Cipro, with the Food and Drug Administration (FDA) with the intent to defraud or mislead ' a felony violation of the Food, Drug & Cosmetic Act. The guilty plea was part of a global settlement agreement between Bayer and the government in which the company is required to pay over $257 million to resolve criminal charges and civil liabilities in connection with a scheme commonly referred to as 'lick and stick,' in which BAYER sold relabeled products to an HMO at deeply discounted prices, and then concealed and avoided its obligation to pay millions of dollars in additional rebates to the Medicaid program. The government's investigation began in 2000 after a former manager at the company reported the private labeling arrangement to law enforcement authorities and filed a civil False Claims Act suit.

California Medical Device Maker Pleads Guilty in Cover-up of Malfunctions

Endovascular Technologies, Inc., a wholly owned subsidiary of Guidant Corporation, based in Menlo Park, CA, pled guilty to a criminal information with ten felony counts, and agreed to pay $92.4 million to settle criminal and civil charges for covering up thousands of incidents involving the malfunction of a medical device (the 'Ancure device') used to treat aneurysms in the aorta. The incidents involved 12 deaths and dozens of invasive surgeries, according to a June 12, 2003, announcement by the U.S. Attorney's Office for the Northern District of California. Because the company knowingly failed to file required Medical Device Reports with the FDA, which the company knew about since it had a sales representative present in the operating room each time one of these devices was surgically implanted in a patient, it violated 21 U.S.C. ” 331(a) and 333(a)(2) ('Interstate Shipment of Misbranded Devices'). According to investigators, the government may charge company executives. The press release is available at www.usdoj.gov/usao/can/press/html/2003_06_12_endovascular.html

Pharmaceutical Company Agrees to Pay $18.5 Million

In order to resolve a Texas Medicaid fraud case, Dey, Inc., a wholly owned subsidiary of Merck KGaA and California-based prescription manufacturer of drugs used to treat allergies and respiratory diseases, agreed to pay$18.5 million to settle allegations that it submitted false pricing information to the Texas Vendor Drug Program and caused providers to submit fraudulently inflated reimbursement claims to Texas Medicaid.

On June 11, 2003, the Department of Justice announced that the Texas Attorney General's Office originally filed this suit against Dey and two other drug manufacturers. A press release is posted at www.usdoj.gov/opa/pr/2003/June/03_civ_350.htm

CEO of San Diego Tenet Facility Indicted by Federal Grand Jury

Barry Weinbaum, the Chief Executive Officer of Alvarado Hospital Medical Center, San Diego, was named in an eight-count indictment for making illegal payments to physicians to induce patient referrals to the hospital, according to a June 6, 2003, announcement by the U.S. Attorney's Office for the Southern District of California. According to the charges, Weinbaum paid over $10 million to physicians who agreed to relocate their practices to the hospital's service area. Also identified in the indictment is Dr. Paul Ver Hoeve, a primary care physician who had a large Medicare patient base, as being one of the physicians who received illegal remunerations from the hospital. A press release is posted at Alvarado Hospital is owned by Tenet Healthcare Corporation. In 1994, Tenet (f/k/a National Medical Enterprises), entered criminal guilty pleas and paid the United States $325 million to settle an investigation into paying illegal remunerations to physicians to induce referrals to certain psychiatric hospitals. It also agreed to implement a corporate integrity program to prevent future violations.

Qui Tam Whistleblower Seeks to Have Declaratory Action Dismissed

A Washington State physician, Dr. Mauricio Leon, Senior Director, Medical Informatics, announced he had moved to dismiss a Declaratory Judgment action filed by IDX on April 25, 2003 asking the federal court in Seattle to hold that it could fire him without violating the federal False Claims Act and the new anti-retaliatory provisions (which include a criminal statute) of the Sarbanes-Oxley Act of 2002. According to a June 9, 2003, PR Newswire report, Dr. Leon filed a whistleblower suit against IDX on May 20, 2003, that seeks to dismiss the IDX action.

Pennsylvania Health care Network Settles PATH Case for Nearly $2 Million

The Albert Einstein Healthcare Network reached a settlement with the government in which, although denying its liability, the company agreed to pay $1.98 million to the government to settle civil False Claims Act allegations arising from an investigation and audit conducted by the Department of Health and Human Services as part of its PATH (Physicians At Teaching Hospital) initiative. The announcement was released on May 28, 2003, by the U.S. Attorney's Office for the Eastern District of Pennsylvania. A press release is posted at www.usao_edpa.com/Pr/2003/may/einstein.html

Miami Resident Receives Lengthy Prison Term for Insurance Fraud Scheme

On May 22, 2003, the Miami Herald reported that Idania C. Arias of Miami had been sentenced to serve more than 10 years' imprisonment for having orchestrated a $7 million insurance fraud scheme that involved getting physicians to sign blank prescriptions and having pharmacists concoct doses of a toxic and medically unnecessary compound for patients. According to the news report, Arias was considered the lead defendant among eight doctors, pharmacists and family-owned medical-equipment supply company owners who were convicted in July 2002, following a 5-month trial in which 26 South Florida residents were convicted. At sentencing, Arias reportedly blamed her ex-husband and former co-defendant, Jose Arias, for leading the fraud. Mr. Arias, who plead guilty and cooperated with prosecutors by testifying at the trial, received a 6 '-year prison term.

New York Eye Doctor Pleads Guilty to Defrauding Medicare

On the eve of jury selection, Dr. Shaul Debbi pled guilty to defrauding Medicare of about $1 million in a billing scheme that preyed on hundreds of mentally ill people living in adult homes. Debbi had been arrested last year for allegedly performing unnecessary eye surgery on patients at the Leben Home for Adults in Queens, NY. According to the government, as reported on May 20, 2003, in the New York Daily News, patients at Leben and other facilities line up to see Dr. Debbi, who, the government contends, billed Medicare for hundreds of medically unnecessary procedures, including glaucoma tests and cataract surgery.

Florida Eye Surgeon Receives Lengthy Prison Term for Medicare Fraud

Eye surgeon Gustavo E. Coll of Coral Gables, FL, was sentenced to federal prison for 57 months as a result of 90 counts of Medicare fraud for billing the Medicare program approximately $1 million for services not provided or which were not medically necessary. In addition, Dr. Coll was ordered to pay approximately $792,952 in restitution. In a May 20, 2003, announcement, the U.S. Attorney's Office for the Southern District of Florida reported that the judge found Dr. Coll had recklessly created a risk of serious bodily injury to patients by placing medically unnecessary laser burns in their eyes, and obstructed justice by perjuring himself at trial. The government alleged that Dr. Coll had fabricated medical charts and billing records, claiming to have conducted various diagnostic tests and laser eye surgeries, then submitted hundreds of false claims to Medicare seeking payment for tests and surgeries never rendered; moreover, many elderly Medicare patients were misled into believing that they had serious eye disease that they did not have.

U.S. Attorney's Office Files Civil False Claims Act Suit Against Southern California Hospital

On May 14, 2003, the U.S. Attorney's Office for the Southern District of California announced that the government had filed a civil False Claims Act suit against the former owners of Bayview Hospital, located in Chula Vista. According to the release, the government contends that Robert Bourseau, Rudra Sabaratnam and their corporate entities RIB Medical Management and Navatkuda schemed to defraud Medicare by submitting reimbursement claims for false and inflated costs on the hospital's cost reports (including $5 million in interest expenses not paid by Bayview, about $1.5 million in legal fees, over $1.2 million in management fees, and about $400,000 in lease expenses not incurred by Bayview). and making material misrepresentations that permitted them to keep funds to which Bayview was not entitled. The suit seeks to recover treble the damages of $7.7 million and civil penalties.

Florida Hospital Settles Medicaid Fraud Case

Jackson Memorial Hospital, a Miami-area facility, agreed to reimburse Florida Medicaid $16.9 million ($1.5 million of which will go to a whistleblower) for problems relating to billing practices at 12 primary-care clinics in Miami-Dade County. At issue was the payment of a 'facility fee' paid by the state Agency for Healthcare Administration (AHCA) meant to cover more comprehensive and costly services than those offered at regular doctors' offices. The report first appeared the May 14, 2003, Miami Herald.

Texas Jury Convicts Physicians of Health Care Fraud

Dr. James Mark Murphy and Joseph Robert Kirkham were convicted by a federal jury of health care fraud, 18 U.S.C. ' 1347, as charged in a one-count indictment. On May 12, 2003, the U.S. Attorney's Office for the Northern District of Texas announced that the government's witnesses established the defendants and others submitted fraudulent medical claims to numerous insurers from 1996 to 2000 through medical clinics that were operated in health clubs located in the Dallas-Fort Worth area. Patients testified that they never saw Dr. Murphy, but were billed for medical services that he did not provide or supervise. Mark Darner, a chiropractor who had pled guilty to mail fraud in connection with the filing of false medical claims in this matter testified that Dr. Murphy and Joseph Kirkham both knew about the fraudulent billings and participated in the submission of the fraudulent claims.

Bayer Corp. Sentenced to Pay Over $5.6 Million for Failure to List Drug with FDA

On May 9, 2003, the U.S. Attorney's Office for the District of Massachusetts announced that Bayer Corporation, had been sentenced to pay a criminal fine of $5.59 million after the company pled guilty to having failed to list its drug product, Cipro, with the Food and Drug Administration (FDA) with the intent to defraud or mislead ' a felony violation of the Food, Drug & Cosmetic Act. The guilty plea was part of a global settlement agreement between Bayer and the government in which the company is required to pay over $257 million to resolve criminal charges and civil liabilities in connection with a scheme commonly referred to as 'lick and stick,' in which BAYER sold relabeled products to an HMO at deeply discounted prices, and then concealed and avoided its obligation to pay millions of dollars in additional rebates to the Medicaid program. The government's investigation began in 2000 after a former manager at the company reported the private labeling arrangement to law enforcement authorities and filed a civil False Claims Act suit.

On June 11, 2003, the Department of Justice announced that the Texas Attorney General's Office originally filed this suit against Dey and two other drug manufacturers. A press release is posted at www.usdoj.gov/opa/pr/2003/June/03_civ_350.htmBarry Weinbaum, the Chief Exec- utive Officer of Alvarado Hospital Medical Center, San Diego, was named in an eight-count indictment for making illegal payments to physicians to induce patient referrals to the hospital, according to a June 6, 2003, announcement by the U.S. Attorney's Office for the Southern District of California. According to the charges, Weinbaum paid over $10 million to physicians who agreed to relocate their practices to the hospital's service area. Also identified in the indictment is Dr. Paul Ver Hoeve, a primary care physician who had a large Medicare patient base, as being one of the physicians who received illegal remunerations from the hospital. A press release is posted at Alvarado Hospital is owned by Tenet Healthcare Corporation. In 1994, Tenet (f/k/a National Medical Enterprises), entered criminal guilty pleas and paid the United States $325 million to settle an investigation into paying illegal remunerations to physicians to induce referrals to certain psychiatric hospitals. It also agreed to implement a corporate integrity program to prevent future violations. A Washington State physician, Dr. Mauricio Leon, Senior Director, Medical Informatics, announced he had moved to dismiss a Declaratory Judgment action filed by IDX on April 25, 2003, asking the federal court in Seattle to hold that it could fire him without violating the federal False Claims Act and the new anti-retaliatory provisions (which include a criminal statute) of the Sarbanes-Oxley Act of 2002. According to a June 9, 2003, PR Newswire report, Dr. Leon filed a whistleblower suit against IDX on May 20, 2003, seeking to dismiss the IDX action.The Albert Einstein Healthcare Network reached a settlement with the government in which, although denying its liability, the company agreed to pay $1.98 million to the government to settle civil False Claims Act allegations arising from an investigation and audit conducted by the Department of Health and Human Services as part of its PATH (Physicians At Teaching Hospital) initiative. The announcement was released on May 28, 2003, by the U.S. Attorney's Office for the Eastern District of Pennsylvania. A press release is posted at <a href="http://www.usao-edpa.com/Pr/2003/may/einstein.html"www.usao-edpa.com/Pr/2003/may/einstein.htmlOn May 22, 2003, the Miami Herald reported that Idania C. Arias of Miami had been sentenced to serve more than 10 years' imprisonment for having orchestrated a $7 million insurance fraud scheme that involved getting physicians to sign blank prescriptions and having pharmacists concoct doses of a toxic and medically unnecessary compound for patients. According to the news report, Arias was considered the lead defendant among eight doctors, pharmacists and family-owned medical-equipment supply company owners who were convicted in July 2002, following a 5-month trial in which 26 South Florida residents were convicted. At sentencing, Arias reportedly blamed her ex-husband and former co-defendant, Jose Arias, for leading the fraud. Mr. Arias, who pled guilty and cooperated with prosecutors by testifying at the trial, received a 6 1/2-year prison term.On the eve of jury selection, Dr. Shaul Debbi pled guilty to defrauding Medicare of about $1 million in a billing scheme that preyed on hundreds of mentally ill people living in adult homes. Debbi had been arrested last year for allegedly performing unnecessary eye surgery on patients at the Leben Home for Adults in Queens, NY. According to the government, as reported on May 20, 2003, in the New York Daily News, patients at Leben and other facilities lined up to see Dr. Debbi, who, the government contends, billed Medicare for hundreds of medically unnecessary procedures, including glaucoma tests and cataract surgery.Eye surgeon Gustavo E. Coll of Coral Gables, FL, was sentenced to federal prison for 57 months as a result of 90 counts of Medicare fraud for billing the Medicare program approximately $1 million for services not provided or which were not medically necessary. In addition, Dr. Coll was ordered to pay approximately $792,952 in restitution. In a May 20, 2003, announcement, the U.S. Attorney's Office for the Southern District of Florida reported that the judge found Dr. Coll had recklessly created a risk of serious bodily injury to patients by placing medically unnecessary laser burns in their eyes, and obstructed justice by perjuring himself at trial. The government alleged that Dr. Coll had fabricated medical charts and billing records, claiming to have conducted various diagnostic tests and laser eye surgeries, then submitted hundreds of false claims to Medicare seeking payment for tests and surgeries never rendered; moreover, many elderly Medicare patients were misled into believing that they had serious eye disease that they did not have. The release is posted at www.usdoj.gov/usao/fls/Gorrin.htmlOn May 14, 2003, the U.S. Attorney's Office for the Southern District of California announced that the government had filed a civil False Claims Act suit against the former owners of Bayview Hospital, located in Chula Vista. According to the release, the government contends that Robert Bourseau, Rudra Sabaratnam and their corporate entities RIB Medical Management and Navatkuda schemed to defraud Medicare by submitting reimbursement claims for false and inflated costs on the hospital's cost reports (including $5 million in interest expenses not paid by Bayview, about $1.5 million in legal fees, over $1.2 million in management fees, and about $400,000 in lease expenses not incurred by Bayview), and making material misrepresentations that permitted them to keep funds to which Bayview was not entitled. The suit seeks to recover treble the damages of $7.7 million and civil penalties. The release is posted at www.usdoj.gov/usao/fls/Gorrin.htmlJackson Memorial Hospital, a Miami-area facility, agreed to reimburse Florida Medicaid $16.9 million ($1.5 million of which will go to a whistleblower) for problems relating to billing practices at 12 primary-care clinics in Miami-Dade County. At issue was the payment of a 'facility fee' paid by the state Agency for Healthcare Administration (AHCA) meant to cover more comprehensive and costly services than those offered at regular doctors' offices. The report first appeared the May 14, 2003, Miami Herald.Dr. James Mark Murphy and Joseph Robert Kirkham were convicted by a federal jury of health care fraud, 18 U.S.C. ' 1347, as charged in a one-count indictment. On May 12, 2003, the U.S. Attorney's Office for the Northern District of Texas announced that the government's witnesses established the defendants and others submitted fraudulent medical claims to numerous insurers from 1996 to 2000 through medical clinics that were operated in health clubs located in the Dallas-Fort Worth area. Patients testified that they never saw Dr. Murphy, but were billed for medical services that he did not provide or supervise. Mark Darner, a chiropractor who had pled guilty to mail fraud in connection with the filing of false medical claims in this matter testified that Dr. Murphy and Joseph Kirkham both knew about the fraudulent billings and participated in the submission of the fraudulent claims.On May 9, 2003, the U.S. Attorney's Office for the District of Massachusetts announced that Bayer Corporation, had been sentenced to pay a criminal fine of $5.59 million after the company pled guilty to having failed to list its drug product, Cipro, with the Food and Drug Administration (FDA) with the intent to defraud or mislead ' a felony violation of the Food, Drug & Cosmetic Act. The guilty plea was part of a global settlement agreement between Bayer and the government in which the company is required to pay over $257 million to resolve criminal charges and civil liabilities in connection with a scheme commonly referred to as 'lick and stick,' in which BAYER sold relabeled products to an HMO at deeply discounted prices, and then concealed and avoided its obligation to pay millions of dollars in additional rebates to the Medicaid program. The government's investigation began in 2000 after a former manager at the company reported the private labeling arrangement to law enforcement authorities and filed a civil False Claims Act suit.