Articles Posted in Fraud Cases

In a federal court of appeals, the Federal Rule of Civil Procedure 9(b) was addressed by the Seventh Circuit Court of Appeals in Chicago regarding the specificity required in complaints. On Sept. 1, 2016, the U.S. Court of Appeals for the Seventh Circuit in Chicago affirmed dismissal of the amended complaint pursuant to the particularity requirement of Federal Rule of Civil Procedure 9(b).

In this case, a nurse alleged that a number of practices at the Acacia Mental Health Clinic where she worked were not medically necessary. The allegations were that the clinic required patients to see multiple practitioners before receiving medications; required patients to undergo mandatory drug screenings at each visit; and required patients to come to the clinic in-person in order to receive a prescription or speak to a doctor. It was also alleged that the clinic misused a billing code.  This was the only claim the Seventh Circuit permitted to go forward. In dismissing the majority of the complaint, Seventh Circuit began with a robust discussion of the importance of Rule 9(b) in screening out a baseless False Claims Act (FCA).

“Rule 9 requires heightened pleading standards because of the stigmatic injury that potentially results from allegations of fraud. We have observed, moreover, that fraud is frequently charged irresponsibly by people who have suffered a loss and want to find someone to blame for it. The requirement that fraud be pleaded with particularity compels the plaintiff to provide enough detail to enable the defendant to repose swiftly and effectively if the claim is groundless. It also forces the plaintiff to conduct a careful pretrial investigation and thus operates as a screen against spurious fraud claims.”

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A wrongful-death verdict that was vacated by a trial judge was affirmed on appeal by the Illinois Appellate Court. The jury’s verdict of $4.25 million was reached in a wrongful-death trial awarded to the family of a woman killed in a highway crash. But the trial judge vacated the verdict after it was revealed that the woman was married and that her parents and siblings were not her heirs under Illinois law. The judge would not let the woman’s husband file an amended complaint finding that he engaged in fraud with the woman’s family.

In an opinion that covered 107 pages written by Justice Robert E. Gordon, the panel found that the trial court was correct in vacating that verdict. But in a partial reversal, the panel will allow the woman’s husband to file an amended complaint.

The parents and eight siblings of 28-year-old Hawa Sissoko sued Alfred C. Baggiani and Roadway Express, the driver and owner of the semi-trailer that struck and killed Sissoko in 2007. She was standing behind her car in the right lane of the Indiana Toll Road outside Chesterton, Ind., when the accident occurred.

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Pilot Flying J, a truck stop fueling and restaurant chain that is common along Illinois and U.S. highways, has agreed to pay $92 million in fines to the federal government for a scheme to cheat truck drivers out of agreed-upon diesel fuel rebates. The agreement was reached with the U.S. Attorney’s Office for the Eastern District of Tennessee and Pilot Travel Centers, LLC d/b/a “Pilot Flying J.”

It was alleged that the scheme cost the company’s truck driver customers more than $56 million. The agreement came after 10 Pilot Flying J employees pleaded guilty to involvement in the plot to defraud Flying J customers.

Pilot Flying J is one of the largest trucker diesel suppliers in the United States. Flying J offered rebates and discount programs to encourage loyalty among its trucking customers. The discounts offered by Pilot Flying J varied among its numerous truck stops making it difficult for customers to know whether they were getting their agreed-upon discounts. The U.S. Attorney’s Office stated that in some instances, Pilot Flying J instructed its sales staff how to reduce the rebates in order to make some discounts more profitable.

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