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Whistleblower to Collect $45 Million Under False Claims Act

Whistle Blowers Under the False Claims Act
The False Claims Act allows people who are not affiliated with the government to file actions against federal contractors claiming fraud against the government.  Most of these cases involve a corporation overcharging the U.S. government for goods or services.  Whistleblowers are entitled to 15-25% of in return for contribution to the investigation (per the Act's qui tam* provision).

California Businessman/Biochemist Sues Quest Diagnostics
Quest Diagnostics supplied the Medicare with PTH test kits to aid doctors in determining treatment for dialysis patients.  Thomas Cantor conducted research at his own cost and, beginning in 2000, attempted to warn the medical community and the federal government that the test kits were faulty.  He found that the tests were inaccurate and resulting in painful overdoses of Vitamin D supplements.  He also learned that more than 2000 patients had unnecessary operations due to the inaccurate results.  Finally, in 2004, Cantor found an article on the Internet alerting him that he could sue Quest Diagnostics under the False Claims Act because the company had defrauded the U.S. governemnt.  He filed a complaint.

The Settlement and the Whistleblower Cut
The settlement was one of the largest recoveries involving a medical devise.  Quest and its subsidiary, Nichols Institute Diagnostics, will pay $262 million plus interest to resolve civil charges.  Nichols will also pay a $40 million fine for criminal misbranding. 

Cantor will collect 18% of the $253 million qui tam settlement ($45 million).  He intends to use the entire reward to fund research into antibody therapies to treat drug-resistant infections, HIV, and hepititis.

Source: Am Law Litigation Daily

*Qui Tam is short for the latin phrase "He who brings a case on behalf of our lord the King, as well as for himself."

Full post as published by Fastcase Legal News on April 30, 2009 (boomark / email).