News & Success Stories

SEPTEMBER 24, 2008

Bookkeeper jailed for $48,000 fraud

http://www.canada.com/calgaryherald/news/city/story.html?id=c6d35e63-ca1c-4506-932c-d40c5947fe47&k=55949

bookkeeper who defrauded her employers of $48,520 to feed a gambling addiction has been sent to jail.

Provincial court Judge Catherine Skene said in her written decision released Tuesday that Brenda Westerson, 47, wrote fraudulent cheques before and after her employment at Superior Power Products.

"The motivation for the crime was to fund Westerson's serious problem with VLT addiction," wrote Skene.

"She also admits to being envious of her fellow employees at Superior Power Products and their better lifestyles. Gambling was Westerson's way of escaping all her problems. She enjoyed 'being there,' referring to the bar where she spent her money and over $48,000 of her employer's money."

The judge noted the fraud occurred around the same time she suffered a heart attack in May 2006. She had angioplasty and stent implementation and was depressed about potential early death.

Court heard Westerson wrote 11 cheques payable to herself in the amount of $12,000 while she was still employed. She wrote 37 more cheques for another $36,520 after she left in June 2007.

The judge jailed her for one year and ordered her to make full restitution, noting she has not yet paid back any of the stolen funds.

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SEPTEMBER 1, 2008

Whistle-blowers help US recoup $9.3 billion

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By KEVIN FREKING

WASHINGTON (AP) — Whistle-blowers helped authorities recover at least $9.3 billion from health care providers accused of defrauding states and the federal government, according to an analysis of Justice Department records.

The department ramped up efforts in the 1990s to combat health care fraud by using private citizens with inside knowledge of wrongdoing. They now initiate more than 90 percent of the department's lawsuits focusing on health care fraud.

Whistle-blowers start cases by filing a sealed complaint in federal court. The department investigates the allegation and can intervene, assuming the lead role in the lawsuit. Whistle-blowers then get between 15 percent and 25 percent of the amount recovered. Of the $9.3 billion recovered between 1996 and 2005, whistle-blowers got more than $1 billion, say analysts, writing for the Annals of Internal Medicine.

The analysts' findings are conservative. Information was only available for about three-quarters of the 379 cases reviewed. Second, some of the largest recoveries have taken place after the period reviewed.

For example, the study doesn't include the single largest settlement, worth $920 million, which came against Tenet Healthcare Corp., one of the nation's largest hospital chains, in 2006.

Still, the study highlights some important trends in health care fraud. While the number of claims pursued has dropped in recent years, recovery amounts have soared because of a late addition to the cast of defendants — pharmaceutical manufacturers. Recoveries jumped from about $10 million a case in 2002 to $50 million by 2005.

Drug makers are required to sell products to state Medicaid programs at the "best price" offered in the private marketplace. But the companies may artificially inflate the price, according to the report.

Another common scheme is to market drugs for uses not approved by the Food and Drug Administration.

The report's authors, Aaron S. Kesselheim of Brigham and Women's Hospital in Boston, and David M. Studdert of the University of Melbourne in Australia, said data on hundreds of whistle-blower lawsuits should be researched to identify what type of allegations turn out to be legitimate and lead to recoveries so that the department can fast-track such cases. Reports indicate the department rejects about three-quarters of the cases it gets.

The law was recently changed to require larger health care companies to educate employees about protections for whistle-blowers. Some lawmakers also want to expand the class of people who can file whistle-blower suits, such as government employees, which the business community has opposed.

The study indicates the current system is effective in generating significant recoveries for the government, said Matthew Webb, a senior vice president at the U.S. Chamber of Commerce Institute for Legal Reform.

"Some have said the law needs significant changes to make the cases actually stick," Webb said. "If their definition of 'not sticking' is $9.3 billion, I'd hate to see what their definition of sticking is."

Officials representing the trade group for prescription drug manufacturers declined to comment on the Justice Department's greater focus on their members, but said the companies devote significant resources to internal compliance programs that complement the government's efforts to prevent misconduct.

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FEBRUARY 22, 2008

Whistleblower Line Receives 15 Complaints - Calgary Herald

http://www.canada.com/calgaryherald/news/city/story.html?id=3ba1009c-22a5-4282-bcff-bf79004a1160

The city's whistleblower hotline has received 15 complaints since the program began in July, according to a report released Thursday.

The first annual report, prepared by the city auditor, shows there was a total of 15 complaints through the city's website, phone calls or letters from July 5 to Dec. 31.

In the report, city auditor Tracy McTaggart said 10 of the 15 complaints are actively being investigated and two have been referred to management for review.

Two of the complaints were dismissed because there wasn't enough information to proceed with an investigation, while one complaint is still being assessed. The hotline, which was approved by council in May, was set up to allow City of Calgary staff and local taxpayers to report potential wrongdoing or waste.

It will also now be available to take complaints against the Calgary Police Service after policy changes were recently implemented by the police commission. McTaggart said those complaints would still be forwarded to the chief if it involved an officer, and the police commission if it involved the chief. Those complaints, however, would still be recorded in the annual reports to council on the program. The cost of the program is about $50,000, although there are resources within the city auditor's office dedicated toward the program.

Any investigative costs will be absorbed by city departments involved in the complaint. Should the number of complaints increase, the city auditor would ask council to put additional funding into the program.