Teva and DOJ May Reach Settlement in Closely Watched AKS Lawsuit

On June 16, Teva Pharmaceuticals filed a request with the First Circuit Court of Appeals seeking to hold in abeyance its interlocutory appeal concerning the US Department of Justice’s (DOJ) lawsuit alleging violations of the Anti-Kickback Statute (AKS). Teva’s filing stated that the government consented to holding the appeal in abeyance because “[t]he parties are actively engaged in settlement negotiations, and Teva is optimistic that the parties can reach a resolution, but additional time is needed to do so.”

The lawsuit concerns the section of the AKS providing that billing claims “resulting from” kickbacks can be actionable under the False Claims Act. There is presently a split among the circuit courts as to whether that “resulting from” language requires that claims would not have been submitted to federal health care programs “but for” the kickbacks. The Sixth and Eighth Circuits have applied this “but for” standard, while the Third Circuit has found that there must merely be “some connection” between the submission of claims and the kickbacks. There have also been disparate interpretations within the trial courts in the First Circuit, amplifying the split and the importance of the appeal. The federal district court in Teva’s case concluded that there needed to be only a “sufficient causal connection,” while the federal district court in a similar kickback case the DOJ brought against Regeneron Pharmaceuticals found in favor of Regeneron. Absent this request for the appeal to be held in abeyance, both interlocutory appeals were scheduled to be heard for oral argument on July 22. It is unclear the extent to which a potential settlement in Teva’s case will impact the DOJ’s lawsuit against Regeneron.

The cases are US v. Teva Pharmaceuticals USA Inc. et al., case number 23-1958, and US v. Regeneron Pharmaceuticals Inc., case number 23-2086, both in the US Court of Appeals for the First Circuit.

Indiana Man Sentenced in $5.6 Million International Advance-Fee Scheme

Following a federal jury trial in Houston, an Indiana man was sentenced to three years in prison for his role in an international advance-fee scheme that defrauded victims of over $5.6 million.

From at least February 2015 to January 2018, defendant Tochukwu Nwosisi participated in an advance-fee scheme concerning fraudulent offers of investment funding and inheritances. Nwosisi’s co-conspirators, based in Nigeria, induced victims to make large wire payments to US bank accounts under the false impression that the advance fee payment was necessary for the bank to issue the subsequent investment funding or inheritance. According to court documents and evidence presented at trial, Nwosisi’s role was to launder victim funds into his US-based bank accounts and direct the proceeds to other members of the conspiracy in Nigeria.

The jury convicted Nwosisi on March 4 of conspiracy to commit money laundering and concealment money laundering.

Read the press release here.

New York Woman Pleads Guilty to COVID-19 Vaccine Card Fraud Scheme

On June 17, a New York woman pleaded guilty to fraudulently destroying over 2,600 COVID-19 vaccines and issuing a corresponding number of fraudulent COVID-19 vaccination record cards.

According to court documents, defendant Kathleen Breault was a midwife at Sage-Femme Midwifery PLLC, an authorized COVID-19 vaccine administration site in Albany, New York. Breault allegedly conspired to obstruct the government’s distribution of COVID-19 vaccines by destroying COVID-19 vaccines and issuing fraudulent COVID-19 vaccination record cards. Breault allegedly provided fraudulent vaccination record cards to minors who were not eligible to be vaccinated and to Canadian citizens who were not present in the United States when they were purportedly vaccinated, among others. Additionally, Breault and her co-conspirators allegedly made over 2,600 false entries in a New York database that tracked COVID-19 vaccine distribution. 

Breault pleaded guilty to conspiring to defraud the United States and its departments and agencies and faces a maximum penalty of five years in prison. As part of her guilty plea, Breault agreed to pay more than $37,000 in restitution for the destroyed vaccines. Sentencing is scheduled for September 18.

Read the press release here.