Date: 08-23-2000

Case Style: United States of America, et al. v. Transworld Healthcare, Inc.

Case Number: 4:99cv225

Judge: J. Brown

Court: United States District Court for the Eastern District of Texas

Plaintiff's Attorney: Mitch Kreindler of Phebus & Winkelmann, West Chester, Pennsylvania; Mary Louise Cohen of Phillips & Cohen, Washington, D.C.; and Robert S. Kitchenoff of Weinstein, Kitchenoff, Scarlato & Goldman, Philadelphia, Pennsylvania.

Defendant's Attorney: Stuart Gerson, Lynn Shapiro Snyder, Kirsten Backstrom and John Rah of Epstein Becker & Green, Washington, D.C.

Description: False Claims Act Claim - Whistleblower - Plaintiff, a New Jersey businessman, field this qui tam suit on behalf of the United States on the theory that Transworld and its subsidiaries were engaging in a massive kickback scheme in order to generate patient referrals for medication sold and distributed by Transworld. Most of the medicines involved were pre-mixed, unit-dose repiratory medications, including Albuterol. Mr. Piacentile complaint alleged that Transworld engaged in a systematic process of defrauding Medicare and other government funded health insurance programs by claiming or causing excessive reimbursements as part of the marketing scheme. Plaintiff further alleged that Transworld paid up to $750 in kickbacks to durable medical equipment suppliers and physicians for a patient referral. The payments were made in small increments over time as the patient received the medications. Transworld was essentially buying patients for the drugs it had for sale. Plaintiff claimed that the scheme resulted in significantly higher costs and potentially dangerous over-utilization of the drugs.

Outcome: Settled for $10 million.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: According to newspaper reports, Mr. Piacentile will be paid a reward of $1,350,000 for his efforts.