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Caffery, Oubre, Campbell & Garrison, L.L.P.
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National pharmacy chain spotlighted in major fraud case

Insurance fraud is sometimes relatively confined.

Yet it is just as often both sprawling and egregious, as well as vastly harmful to the American public.

Recent court-approved settlements involving Walgreens leave no doubt as to the sheer dimensions and adverse effects of a long-term fraud scheme orchestrated by that company. Walgreens reportedly operates about 9,400 drugstores across the country. Authorities say that transactions conducted for years in many of those outlets unjustly enriched the mega-chain at the expense of government insurance providers and taxpayers.

Court documents filed in federal courts in two whistleblower-driven lawsuits brought under the U.S. False Claims Act reveal the brazen scope of the Walgreens fraud. Recently disclosed details underscore that federal concerns were twofold, as follows.

First, one lawsuit provided evidence that the chain required consumers needing insulin pens for diabetes to buy those products in bulk amounts that yielded waste on a mass scale. The company then profited inordinately after purposely overcharging federal programs (like Medicare). The practice reportedly went on for over a decade.

The second complaint spotlighted the company discount drug program, noting that Walgreens officials kept mum on its details when billing Medicaid for nearly 10 years.

The U.S. Department of Justice is now demanding atonement for that outsized and protracted insurance rip off. Federal judges in the two cases signed off on settlement details recently that require Walgreens to pay back nearly $270 million to federal officials and state agencies.

Although company officials do not formally admit to any wrongdoing, the settlement pacts expressly state that Walgreens “admits, acknowledges and accepts responsibility” for the fraudulent behavior.

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