Tag Archives: settlement

TN Getting $5M More from Abbot Laboratories

News release from Attorney General’s office:
Tennessee Attorney General Bob Cooper and Health Care Finance and Administration (HCFA) Deputy Commissioner Darin Gordon announced Tennessee will receive at least $5 million as part of a $1.5 billion settlement with a major pharmaceutical company. The announcement comes on the heels of a separate consumer protection agreement announced Monday with Abbott Laboratories of almost $2 million designated for Tennessee.
The agreement resolves allegations by Tennessee, several other states and the federal government that Abbott Laboratories illegally marketed Depakote. The states contend that from January 1998 through Dec. 31, 2008, Abbott promoted the sale and use of Depakote for uses that were not approved by the Food and Drug Administration as safe and effective. This alleged conduct resulted in false claims to Medicaid and other federal healthcare programs.
In addition, Abbott is alleged to have made false and misleading statements about the safety, efficacy, dosing and cost-effectiveness of Depakote for some unapproved uses; improperly marketed the product in nursing homes; and paid illegal remuneration to healthcare professionals and long term care pharmacy providers to induce them to promote and/or prescribe Depakote.
The $1.5 billion settlement is the second largest recovery from a pharmaceutical company in a single civil and criminal global resolution. Abbott Laboratories will pay the states and the federal government a total of $800 million in civil damages and penalties to compensate Medicaid, Medicare, and various federal healthcare programs for harm suffered as a result of its conduct. In addition to the civil settlement, Abbott Laboratories has pleaded guilty to a violation of the Food, Drug, and Cosmetic Act (FDCA) and agreed to pay a criminal fine and forfeiture of $700 million. Further as a condition of the settlement, Abbott Laboratories will enter into a corporate integrity agreement with the U.S. Department of Health and Human Services, Office of the Inspector General. By law, the whistleblowers will receive a portion of the proceeds.
“Our Office will continue work diligently with our state and federal partners to pursue any company that attempts to illegally divert funds designated for TennCare,” Attorney General Cooper said.
“The hard work from state and federal authorities to ensure taxpayer dollars are not misused is vital to the success of the TennCare program,” Deputy Commissioner Gordon said. “The continued investigation and prosecution of Medicaid fraud is a significant component in keeping TennCare’s trend well below national levels.”
This settlement is based on four whistleblower cases that were consolidated and are pending in the United States District Court for the Western District of Virginia in Abingdon, Virginia. The cases were filed under Federal and State false claims statutes. A state team appointed by the National Association of Medicaid Fraud Control Units participated in the investigation and conducted the settlement negotiations with Abbott on behalf of the participating states.

TN To Get $146 Million in Settlement With Mortgage Servicers

NASHVILLE, Tenn. (AP) — Tennessee’s share in the $25 billion agreement with five mortgage servicers will be an estimated $146 million.
State Attorney General Bob Cooper said Thursday the agreement, once approved in court, provides major and tangible relief to distressed homeowners who need the help now.
State banking commissioner Greg Gonzales said provisions in the agreement protect consumers now and are similar to what he called common sense treatment that Tennesseans are likely to receive from smaller community lenders.
Officials urged Tennesseans to consult http://www.KeepMyTNHome.org .

TN Gets Part of $34 Million Bond Derivatives Settlement

News release from state attorney general’s office:
Tennessee Attorney General Bob Cooper and 26 other state attorneys general announced a $34.25 million agreement with GE Funding Capital Market Services, Inc. (“GEFCMS”) as part of an ongoing nationwide investigation of alleged anticompetitive and fraudulent conduct in the municipal bond derivatives industry.
As part of the multistate agreement, GEFCMS has agreed to pay $30 million in restitution to affected state agencies, municipalities, school districts and not-for-profit entities nationwide that entered into municipal derivative contracts with GEFCMS between 1999 and 2005. In addition, GEFCMS agreed to pay a $1.25 million civil penalty and $3 million in fees and costs of the investigation to the participating states.
Tennessee entities will receive approximately $742,776. Eligible Tennessee entities include the Memphis Shelby County Airport Authority, Metropolitan Health and Educational Facilities Board and the Knox County Health Education & Housing Facilities Board.
Municipal bond derivatives are contracts that tax-exempt issuers use to reinvest proceeds of bond sales until the funds are needed. They may also be used to avoid fluctuating interest rates. In April 2008, the multistate working group began investigating allegations that some large financial institutions, including national banks and insurance companies, and brokers, engaged in various schemes to rig bids and commit other deceptive, unfair and fraudulent conduct in the municipal bond derivatives market.
The states’ investigation developed evidence that certain traders at GE Funding, in concert with certain brokers, engaged in conduct that allowed the broker to determine in advance that GE Funding would win a bid for a guaranteed investment contract by allowing GE Funding to receive a “last look” and arrange for other financial institutions to submit purposely non-winning courtesy bids. On many occasions, due to the “last look”, GE Funding was able to lower its bid to the issuer and still win the transaction.
“This is an ongoing effort,” Attorney General Cooper said. “We will continue working to ensure there are no financial entities benefiting at the expense of taxpayers through anticompetitive activity. We appreciate the cooperation GEFCMS has demonstrated in this ongoing matter.”
The multistate task force agreement is part of a coordinated global $70 million agreement that GEFCMS entered into today. The financial institution also reached agreement with the U.S. Department of Justice’s Antitrust Division, the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Internal Revenue Service
UPDATE: Josh Flory has more on the Knoxville angle.