Monday, October 5, 2015

Lancaster Man Sentenced to Nearly 7 Years in Prison for Unemployment Insurance Fraud and Tax Fraud

The federal and state governments are putting priority on fraud against government programs. One case highlights a more extreme example. 

On September 28, 2015, Carl Artis, 55 from Lancaster, California, was sentenced by United States District Judge George Wu to 80 months in federal prison on fraud charges related to a scheme to defraud the state’s unemployment insurance program and a related scheme to obtain fraudulent federal tax refunds.  Judge Wu also ordered the defendant to pay $598,000 in restitution.

Mr. Artis pleaded guilty in February to one count of mail fraud and one count of making false claims against the United States government. According to the plea agreement filed in the case, from at least August 2010 through August 2014, Artis operated a scheme to defraud the California Employment Development Department (EDD) of unemployment insurance benefits. 

To execute this, Mr. Artis allegedly registered fictitious companies with the EDD, submitted false wage information for individuals whom he falsely claimed worked for these companies, and then fraudulently applied for and obtained unemployment insurance benefits in the names of these individuals.

In addition, from at least April 2011 until July 2013, according to the plea agreement Mr. Artis engaged in a scheme to defraud the Internal Revenue Service by submitting fraudulent tax returns that sought tax refunds. In the tax fraud scheme, Mr. Artis allegedly used the identities of many of the same individuals and businesses used in the EDD scheme.

This case shows that given the economy, that the governments (federal and state) are putting priority on unemployment insurance fraud.  

Even individuals who are entitled to benefits must remember that they are signing documents under penalty of perjury and that there is a significant risk if statements made on forms submitted to the state are false or misleading. If there is any issue of whether a statement is false or misleading, seek legal advice before it is submitted.

Posted by Tracy Green

Friday, October 2, 2015

Pharmacy Owners Indicted In U.S. District Court in California For Using Pharmacy to Illegally Distribute Vicodin and OxyContin

The Los Angeles Times reports that two owners of a pharmacy Global Compounding in West Los Angeles have been indicted in federal court on counts of using a front for drug trafficking. The Los Angeles Times has a link to the Indictment. The men are presumed innocent and the allegations are that the men used their ability to buy controlled substances (Vicodin and OxyContin) wholesale and sold them for nonmedical reasons.

Posted by Green and Associates

Saturday, September 26, 2015

September 26th is National Prescription Drug Take-Back Day. Be Careful With Your Excess Prescription Medications.

Today, September 26th, is National Prescription Drug Take-Back Day. 

It’s a day where you can safely, conveniently, and responsibly dispose of expired and unwanted prescription drugs at collection sites in your community. 

This way no one else takes your medications in a way not intended. It used to be that we had to lock up our liquor cabinets, but now we need to lock up our medicine chests and make sure that no one has access to controlled substances. Young people especially may view these prescription drugs as "safe" and not be aware of the danger when they take them in excess of as prescribed or when they are mixed with other drugs or alcohol.

Whether it is that someone might use them for unintended purposes (such as recreational partying or getting high) or may use them to harm themselves or end their life, we have to be careful. Here’s why this matters: More Americans are dying from drug overdoses by improperly using prescribed medications. 

Here's a link on where you can take the drugs. Enter your zip code. Flushing down the toilet affects our drinking water and it is preferable to have them destroyed.  Throwing them away is not ideal either. This is the safest way to make sure the drugs are destroyed in the proper manner.  Physicians and Pharmacists can encourage their patients to do so as well.…/index.html

Posted by Green and Associates, Attorneys at Law.

Friday, September 11, 2015

September 11 - Let Us Never Forget

I am lucky to be a woman lawyer in the United States. But for the flip of a coin, I could have been born somewhere that does not have our democratic system and commitment to equality and justice for all. While I seek to make things better in our country for the justice system and our community (as well as my clients) I never forgot how lucky I am to live in the United States.

I remember the attacks of 9/11 both in 2001 on our country and in 2012 on our embassy in Benghazi. As we remember the evils of September 11th, let us turn our hearts and minds towards the good. Let's mourn all those who perished, were injured and lost loved ones. Let's embrace our nation, and let time never lessen the impact of this day. May we never forget. Protect those who go in harm’s way to save others, and those who suffer and die to safeguard our nation. Give wisdom to our leaders, that they may make choices that prevent another day such as this. Let us banish from the world the darkness that allows such hate to remain.

Monday, September 7, 2015

Lawsuit By Orange County Against Pharma Companies for Fraudulently Marketing Addictive Painkillers Dismissed On Grounds FDA Had Exclusive Jurisdiction

On August 27, 2015, a California state court dismissed a groundbreaking lawuit filed last year by Orange and Santa Clara counties accusing the companies of fraudulently marketing addictive painkillers to undermine the effect of warning labels required by the U.S. Food and Drug Administration. The counties say that the efforts boosted sales of the dangerous drugs at the expense of public health. See Los Angeles Times article on this ruling.

In Thursday's hearing before Orange County Superior Court Judge Robert J. Moss, the companies asked that the case be dismissed on the grounds that the FDA had exclusive jurisdiction over the matter. The court ruled that the FDA had exclusive jurisdiction.

The 105-page lawsuit, filed in Orange County by District Attorney Tony Rackauckas, alleges five pharmaceutical companies spent millions of dollars to convince the public that drugs meant only for short-term use by cancer patients should be taken for chronic pain.  The marketing campaign changed prescription opioids from a niche drug to an $8 billion industry by 2010 and contributed to more than 16,000 overdose deaths that same year, putting profits above health, the suit states.

The rise in highly addictive painkillers also created an atmosphere where doctors made life-and-death decisions based not on science but on hype and marketing by the company to doctors directly, the suit states. Orange County was hit particularly hard by this epidemic. 

Rackauckas stated in prior interviews that the pharmaceutical companies are like the tobacco industry. “What we’re after is to make these companies stop the practice of false advertising and false claims that these drugs are benign,” he said. “The effort is to require them to be truthful.” The Orange County DA also apparently wanted to capitalize on the fact that Purdue and its executives plead guilty in 2007 to illegally marketing OxyContin.

The lawsuit was filed after an extensive series of Orange County Register columns over 3 years blaming much of the epidemic on drug companies. The lawsuit named Purdue Pharma (maker of OxyContin), Teva Pharmaceutical Industries, Janssen Pharmaceuticals – a subsidiary of Johnson & Johnson, Endo Health Solutions, and Actavis, as well as affiliated companies.

One reason why the lawsuit was filed is that Purdue, which makes the best-selling painkiller OxyContin, has never gone to trial on a case of OxyContin abuse. It has won dismissals in more than 400 personal-injury lawsuits related to the drug. And while it has settled some product-liability cases related to OxyContin under secret terms, Purdue has defeated more than 10 efforts to wage class-actions against it. 

All the companies were accused of false advertising, unfair competition and creating a public nuisance. With the state court dismissal, Orange County and Santa Clara will have to determine whether an appeal will be filed.  The marketing was not geared to patients but to family practice doctors who treat non-cancer patients. 

One of the issues is that FDA only has limited jurisdiction over the marketing of prescription medications directly to physicians. That is left to the Federal Trade Commission. When Purdue Pharma introduced OxyContin in 1996, it was aggressively marketed and highly promoted. Sales grew from $48 million in 1996 to almost $1.1 billion in 2000. Ultimately, the high availability of OxyContin correlated with increased abuse, diversion, and addiction, and by 2008 OxyContin had become a leading drug of abuse in the United States. 

Sunday, September 6, 2015

OxyContin Maker Continues To Fight With Government And FDA Regarding Its Formulation In Light Of Prior Plea Agreement

Purdue Pharmacy continues to battle the government over its controversial prescription drug OxyContin. Now Purdue wants Medicare, Medi-Cal or Medicaid and other government programs to approve payment even after longstanding lawsuits and concerns about Purdue's actions in the past. Purdue cancelled a meeting with the FDA this past July to go over whether this formulation will deter abuse.

The history here is lengthy. In 2007, in United States of America v. The Purdue Frederick Company, Inc., Purdue and its top executives pleaded guilty to charges that it misled doctors and patients about the addictive properties of OxyContin and misbranded the product as "abuse resistant." Prosecutors found a "corporate culture that allowed this product to be misbranded with the intent to defraud and mislead." Purdue Pharma paid $600 million in fines, among the largest settlements in U.S. history for a pharmaceutical company. 

Three former and current executives of Purdue Pharma, LP, the maker of OxyContin, pled guilty to misdemeanor charges of drug misbranding on May 10, acknowledging that they deceived consumers about the risks associated with the drug. Michael Friedman, the company's president, Howard Udell, Purdue's principal lawyer, and Paul Goldenheim, the company's former chief medical officer, will pay $634.5 million in fines for alleging that OxyContin had a lower incidence of abuse and addiction than the drug's competitors, according to United States Attorney John Brownlee. 

"With its OxyContin, Purdue unleashed a highly abusable, addictive, and potentially dangerous drug on an unsuspecting and unknowing public. For these misrepresentations and crimes, Purdue and its executives have been brought to justice," Brownlee said. 

The plea deal is yet another juncture in the drug's legal history. Two days prior to the agreement, Purdue Pharma, LP, said it would pay $19.5 million to resolve allegations that it persuaded physicians to overprescribe OxyContin in 26 states across the United States, as well as the District of Columbia.

The addictive side effects of OxyContin were discovered by the company in 1995 when physicians in focus groups voiced their concerns over the likelihood of drug dependence. However, even after that information was obtained, the company knowingly provided sales representatives with inaccurate data about the drug's addictive nature in comparison with other painkillers, specifically regarding the high potential the drug has for abuse.  

Ken Jost from the Justice Department's Office of Consumer Litigation said the case would serve as a deterrent to ward off other pharmaceutical companies who may be tempted to provide false information about their drugs in order to increase their profits. And, more importantly, the case will show that if other companies have misled the public, they too will be prosecuted. 

OxyContin's maker acknowledged and assumed responsibility for the wrongdoings of its employees. Purdue Pharma explained in a news release, "During the past six years, we have implemented changes to our internal training, compliance, and monitoring systems that seek to ensure that similar events do not occur again." 

According to the FDA, OxyContin, whose active ingredient is oxycodone, is "a narcotic drug approved for the treatment of moderate to severe pain." When properly used, the drug is intended to be consumed whole and subsequently digested over an eight- to 12-hour time span. However, when used improperly, the drug is known to cause a high that is similar to that of heroin. Illegal use of the drug entails individuals crushing OxyContin pills and then swallowing, snorting, or injecting the drug. 

According to a United States Drug Enforcement Administration report, oxycodone-related deaths increased by 500%, which directly corresponded to a significant increase in prescriptions of the drug. The three Purdue Pharma executives, Friedman, Udell, and Goldenheim, are personally responsible for $34.5 million of the $634.5 million fine, which will be divided among several federal and state law enforcement agencies, as well as the federal government, among other organizations. Additionally, $5 million will be used by Purdue Pharma to ensure conformity with the deal. 


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