October 29, 2013 /24-7PressRelease/
-- Retailer to pay over $2.5 million to settle False Claims Act violations
An employee of Kmart filed a whistleblower claim against his employer, alleging that the company was defrauding the government. The company reached a settlement with the government in October 2013, agreeing to pay more than $2.5 million. The case shows the importance of protecting employees' abilities to act as whistleblowers to report when companies are committing wrongdoings. People should be aware of the laws that protect employees who are whistleblowers.
False claims to government health care programs
A man who formerly worked as a travelling pharmacist for Kmart Corporation filed a claim with the FBI saying that the company was violating the False Claims Act in the way that the company filled prescriptions in its national pharmacy centers from January 1, 2004 through October 17, 2005. The pharmacist said that the company's practice was to fill only portions of prescriptions of patients who were using government health care programs such as the Federal Employee Health Benefits Program, Medicaid and Tricare, but bill the government for the whole amount of the prescription. The employees would then return the extra drugs to the company's stock, rather than giving the medication to patients.
A number of states, including Utah, will receive money from the settlement the government reached with Kmart to refund money that their Medicaid programs lost to the company's fraud. The employee who reported the violations will also receive a portion of the settlement money under the False Claims Act's qui tam provision.
Laws protecting whistleblowers
The False Claims Act allows the government to pursue treble damages against those who knowingly file false claims with the government, as well as penalties between $5,500 and $11,000 per claim. The False Claims Act also has a qui tam provision, which means that those who act as whistleblowers
and report companies' false claims can obtain a portion of the money that the government recovers from the companies at fault.
The False Claims Act also has provisions that protect employees who act as whistleblowers from retaliation by employers. Employees who are fired, demoted, harassed or experience other discrimination
because of whistleblowing activities may pursue claims for damages against employers. The relief employees may seek includes reinstatement into a position, double back pay, litigation costs and attorney fees.
Speak with an attorney
Employees are the ones who are most aware of a company's business practices and are the ones who are in the best position to report when a company is committing fraud. It is important that employees feel safe enough to report a company's wrongdoings. Laws protect whistleblowers, but not all employees are aware of their rights. If you have questions about reporting an employer's activities, speak with a seasoned employment law attorney who can discuss your options with you.
Article provided by Stavros Law, P.C.
Visit us at www.stavroslaw.com