Whistleblower Lawsuit Settled After 15 years

This Whistleblower lawsuit which was filed in 1994, alleged that the Diabetes Treatment Centers of America (DTCA) violated the Anti-kickback Statute by paying kickbacks to over 200 doctors in exchange for referring their patients to DTCA's hospitals.

Doctors allegedly became “medical directors” so that payments would not be questioned and hospitals paid the DTCA “management fees” based on the DTCA's promise to increase the number of patients who were referred to the hospitals. However, A. Scott Pogue, a former employee, realized what was happening and filed a whistleblower lawsuit against the company to expose fraudulent acts which affected federal healthcare benefits.

False Claims Act

The False Claims Act is a whistleblower, or Qui Tam, lawsuit. It was created during the Civil War to expose fraud against the government. The government can choose to participate in the lawsuit or abstain from participation and allow the whistleblower to continue the suit on his or her own. It decided on the latter in this case and Pogue and his attorney so the matter through.

$12M payout to whistleblower

Although the case took 15 years to resolve, Pogue is probably glad that he stayed true to his beliefs. The case settled for $40 million, he will receive approximately $12 million and likely feels vindicated for doing the right thing.

Have you witnessed fraud?

If you've witnessed fraudulent activity by your employer against the government and are considering filing a whistleblower lawsuit, it is in your best interest to contact an experienced Qui Tam attorney before starting the process. Whistleblower lawsuits are handled a bit differently than most other lawsuits and can become rather complicated as the government may or may not become involved in the action. Lawyers with experience in this area say that, although you may have been the first person to witness fraudulent acts, you have to be the first one to file the action in order to proceed. So, discretion is key.