AEL is pleased to announce that, with our superb co-counsel from Kostelanetz LLP, we secured a complete dismissal, with prejudice, of all counts in a False Claims Act (FCA) lawsuit on behalf of our client, Jack Basch, the former Chief Executive Officer (CEO) of Shiel Medical Laboratory (which was also a defendant in the case). The case was handled by Scott Landau and Scott Glicksman.
The lawsuit, which was filed by a whistleblower under the qui tam provisions of the FCA in the U.S. District Court for the Eastern District of New York (EDNY), alleged that the defendants knowingly submitted false claims to Medicare and the New York and New Jersey Medicaid programs for lab tests that were not reasonable and necessary, and that were furnished pursuant to prohibited referrals in violation of the Stark Law and the Anti-Kickback Statute (AKS).
In dismissing all claims with prejudice, Judge Nicholas Garaufis of the EDNY held that the relator’s Fourth Amended Complaint – his fifth operative pleading in the case – failed to allege cognizable claims and suffered from numerous fatal defects, several of which alone “constitute[d] an independent basis” for dismissal of the FCA claims and their state analogs. With respect to Mr. Basch specifically, the Court completely vindicated our client, holding that relator “fail[ed] to allege the submission of a single false claim to the government”; failed to plead facts supporting his requisite knowledge of any false claims; failed to allege any underlying violations of the AKS, or any willfulness under the AKS; failed to alleged any fraudulent physician self-referral scheme in violation of the Stark Law; and failed to properly allege a reverse false claim because it improperly “mirror[ed] the traditional false claims allegations.” And given that relator had amended his complaint four times previously, the Court denied his request for (further) leave to amend, and dismissed all claims against Mr. Basch and the rest of the defendants, with prejudice.
We would like to thank Mr. Basch for entrusting this important case to us. We would also like to thank our co-counsel Claude Millman, Caroline Rule, and Michael Sardar from Kostelenatz LLP, and counsel to the other defendants, for their exceptional collaboration and teamwork in reaching this incredible result.
AEL is a boutique law firm that specializes in FCA litigation and complex parallel criminal and civil white collar investigations and cases. We have extensive experience handling litigation on behalf of healthcare companies and a proven record of success in cases arising under the FCA, the Stark Law, the AKS, and federal criminal statutes, including matters arising from whistleblower and qui tam complaints. We are proud to have helped obtained this victory for our client and look forward to assisting other clients in future cases.
**The foregoing may constitute attorney advertising and readers are cautioned that prior results do not guarantee future outcomes.
