SC Man Liable in $51 Million Whistleblower Case

Mr. Louthian and the Louthian Law Firm provided me with excellent legal services regarding a legal issue with a major corporation.

Errick Bethel Sr.

Mr. Louthian and the Louthian Law Firm provided me with excellent legal services regarding a legal issue with a major corporation.

Errick Bethel Sr.
March 27, 2018

Three separate qui tam cases that ended up being litigated as one concluded on January 31, 2018, when a federal jury handed down a unanimous verdict of fraud against the three defendants, one of whom is from Lexington, South Carolina.

Floyd Calhoun “Cal” Dent, III, a Midlands-area man, and his partner, Robert Bradford “Brad” Johnson of Hanceville, Alabama, ran BlueWave Healthcare Consultants Inc., a sales and marketing company which contracted with Health Diagnostics Laboratory, Inc. (“HDL”) of Richmond, Virginia. The third defendant was the co-founder and ex-CEO of HDL, LaTonya “Tonya” Mallory of Richmond, Virginia. The three of them were found liable of defrauding Medicare and Tricare of more than $51 million.

According to evidence presented at trial, BlueWave recruited physicians who were willing to order medically unnecessary and expensive blood tests for their Medicare and Tricare patients. In exchange, Dent and Johnson were given commissions based on the tests done by HDL, Mallory’s firm, and another lab company, Singulex, of Alameda, California. HDL paid the doctors $17 per ordered test, and both HDL and Singulex submitted false claims to Medicare and Tricare for the unnecessary lab tests. The fees given to the doctors, argued the prosecution, amounted to illegal kickbacks, which violated both the False Claims Act (FCA) and the Anti-Kickback Statute.

The arrangement was lucrative. Allegedly, Mallory received $21 million, Johnson collected $53.5 million, and Dent got $52 million. Some of the money they received came from private health insurance companies as well as the federal government.

HDL’s business took in $375 million during 2013, with about 40 percent of the money ($152 million) coming from Medicare. But a special fraud alert in 2014 originating with the Department of Health and Human Services led to HDL’s stopping payments to physicians. HDL filed for bankruptcy in 2015 after the company agreed to settle for $48.5 million with the Department of Justice (DOJ). However, the settlement excluded Mallory, Johnson, and Dent, which enabled the DOJ to pursue a civil case against them.

The trio could also be legally obligated to pay many more millions in civil penalties if the judge decides to make them financially accountable for each false claim. According to the FCA, the amount that can be assessed per claim runs between $5,500 and $11,000. That would mean another $192 million to $385 million in penalties for the three of them.

The company BlueWave Healthcare Consultants Inc. was not found liable by the jury

First Assistant U.S. Attorney Lance Crick commented in a statement, “This jury verdict sends a strong message of accountability to those who would seek to take advantage of federal health care programs. The District of South Carolina will continue to battle against Medicare and Tricare fraud.”

The whistleblowers, a physician and three others, will receive between 15 and 30 percent of the total recovery. The award has not yet been announced.

The False Claims Act, along with whistleblowers who are willing to step forward, are two of our country’s most powerful and effective tools for fighting the health care fraud that ultimately robs both patients and taxpayers.

Working with whistleblowers tirelessly to shed light on fraudulent practices

If you think you have the facts needed to bring a whistleblower case, the experienced whistleblower attorneys at the Louthian Law Firm can review your case and help you file the appropriate disclosure statement. Under some circumstances, the government will intervene, or join in your lawsuit.

Your chances of succeeding are greater if your whistleblower claim is substantive, clear, and to the point. Because of this, meeting with a qualified whistleblower attorney can increase your chances of winning. The Louthian Law Firm can help you form your claim so that the government will be more inclined to intervene in your case; government intervention can sometimes increase the chances of recovering reward money. Even if the government decides not to intervene, it could still be a good idea to pursue your case without government involvement. Our strong support system can assist you through every step of the process.

For a free, confidential evaluation of your case, call the Louthian Law Firm today at 1-803-454-1200 or, if you prefer, you can fill out our online contact form.

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