Three former managers of the AIDS Healthcare Foundation, Inc. (AHF) have filed a whistleblower lawsuit under federal law and the Florida State Whistleblower Act against the country’s largest supplier of HIV/AIDS medical care, claiming that the company has been involved in illegal patient referral kickbacks. The managers allege that AHF has been defrauding Medicare, Medicaid, and governmental HIV/AIDS grant programs for at least $20 million per year in false claims since 2010.

Facts of the Case

In the case of U.S. ex rel. Carrel et al. v. AIDS Healthcare Foundation Inc., three former managers of the company: Jack Carrel of Louisiana, Mauricio Ferrer of Florida, and Shawn Loftis of New York all claim to have knowledge about Medicare and Medicaid patients receiving kickbacks from the company in exchange for going to specific clinics and pharmacies for their medication. In addition, the three former managers claim that they were terminated from the company after they notified the company about the unlawful practices happening at AHF, despite having federal protection under the federal False Claims Act.

Filed in the Southern District of Florida, the complaint alleges that AHF conducted criminal kickback activities in at least twelve states, including Florida, which involved receiving more funds from federal healthcare programs by generating referrals to the company’s service centers through paying kickbacks to employees and their patients. According to the lawsuit, in 2010 AHF began its illegal incentive program by implementing a system of illegal incentive programs that rewarded patients for giving self-referrals to AHF services. In addition, it awarded employees for referring patients to AHF testing, clinical, pharmacy, and insurance service centers.

The illegal kickbacks in AHF began in California but quickly spread to other states where the company has a substantial presence. Currently, the former managers claim that the kickback system operates in California, Florida, Georgia, Louisiana, Maryland, Mississippi, New York, Ohio, South Carolina, Washington, D.C., Texas, and Nevada.

Holy Grail of Business Models

The kickback system implemented by AHF was referred to by upper management as the “Linkage” system and known as the “Holy Grail” key to its successful business model. Employees received a bonus of $100 for each patient that was “linked” through a positive test result to an AHF “linkage” coordinator for referral services. Even more disturbing, the former employees claim that at the company’s 2013 leadership summit, the president of the company advocated for “1) increased testing to raise HIV ‘positivity’ rates; 2) improved ‘linkage’ of patients to and retention in AHF medical care; and 3) the payment of financial incentives to patients for the purpose of inducing self-referrals to AHF medical care.”

The plaintiffs in this case were all personally aware of the kickback model introduced at AHF. Mr. Carrel was the director of the Southern Bureau of the company and personally saw to the program’s implementation, coordination, and evaluation in addition to providing guidance to staff about budgeting, community, and administrative tasks. Mr. Ferrer was a Senior Program Manager in the same bureau and responsible for supervising the daily functions, administrative operations, prevention techniques, and testing programs of the kickback system in Florida. Mr. Loftis was a Grants Manager at the same bureau and was responsible for the daily management of specific fiscal projects.

The “holy grail” of AHF’s business model resulted in thousands of false and fraudulent referral claims under the federal False Claims Act in addition to resulting in the retaliation against the plaintiffs in this case. An attorney for the plaintiffs went on record as stating that “AIDS Healthcare Foundation’s fraudulent conduct is made even worse by the fact that these funds were entrusted to this healthcare company for the purpose of assisting a vulnerable patient population consisting of individuals living with HIV/AIDS, of whom more than 1.1 million reside in the United States.”

Federal False Claims Act

The Federal False Claims Act can be found in 31 U.S.C. §§ 3729 – 3733 of the federal code. It states that a person or company can be held liable for defrauding government programs. Typically, the fraud occurs with programs like Medicare or Medicaid. Whistleblowers, current or former employees, are usually the best way to discover illegal false claims activity and as such the whistleblowers are given protection under the law.

A whistleblower files an action against the company on behalf of the United States. If the lawsuit is successful against the company, the whistleblower is given a portion of the proceeds recovered. In addition, the whistleblower is protected under federal law from being retaliated against by the company for reporting illegal activity.

Florida State Whistleblowers Act

The Florida State Whistleblowers Act can be found in Sections 112.3187 – 112.31895 of the Florida state code. It states that the purpose of the law is to “prevent agencies or independent contractors from taking retaliatory action against an employee who reports to an appropriate agency violations of law on the part of a public employer or independent contractor that create a substantial and specific danger to the public’s health, safety, or welfare . . . [or] alleging improper use of governmental office, gross waste of funds, or any other abuse or gross neglect of duty.”

Under the state Act, an employee who is retaliated against for reporting illegal behavior is allowed significant relief under the law. Compensation for retaliation includes reinstatement to the same position, lost wages, benefits, payment of reasonable costs (including attorneys’ fees), and the possible issuance of an injunction. An experienced whistleblower attorney will be able to ensure that your rights are protected under state and federal law in a whistleblowing case.

Call a Florida Whistleblower Attorney Today

If you believe that your employer is defrauding the government or have been retaliated against at your job for informing your employers of illegal activity in Orlando, Jacksonville, West Palm Beach, Fort Myers, or Tampa, let the experienced whistleblower attorneys at The Pendas Law Firm help. Call the office or contact us today for a free and confidential consultation of your case.