Facts

Plaintiff filed a whistleblower action on behalf of himself, the United States of America, the State of California and the federal government against his former employers, PAMC Ltd. and Pacific Alliance Medical Center Inc., the owners of a hospital in the Chinatown neighborhood of Los Angeles.

PLAINTIFF'S CONTENTIONS: Plaintiff contended that defendants violated the False Claims Act by submitting false claims to Medicare and Medicaid for services rendered to patients who had been referred by doctors with whom defendants had improper financial relationships. Specifically, he claimed that defendants paid above-market rates to rent office space in doctors' offices and entered into marketing arrangements that provided undue benefits to doctors' practices.

DEFENDANTS' CONTENTIONS:Defendants disputed the accuracy of plaintiff's factual allegations and contended that they did not violate the False Claims Act.

Result

The parties settled for $42 million, which included $31.9 million to the United States and $10 million to California. Plaintiff will receive $9.2 million of the federal recovery.