Fraud

Florida has joined eight states all suing drugmaker Merck & Co alleging deceptive marketing of the recalled painkiller Vioxx.

The lawsuit claims that while Merck offered Vioxx to the Medicaid program it was hiding the drug’s adverse effects in direct violation of the state’s Deceptive and Unfair Trade Practices Act.

Florida’s Attorney General Bill McCollum says the state wants to be reimbursed for more than $80 million spent on health programs, such as Florida’s Medicaid program, which included Vioxx as an approved drug. He wants that money back plus interest and he seeks civil penalties of up to $10,000 per violation.

Vioxx was pulled from the market in 2004 after patients taking the drug for arthritis pain began having heart attacks and stroke. Merck says its own research showed the pill doubled the risk.

Merck’s promotional campaign convinced doctors and patients that the drug was safe and desirable, and McCollum says in a statement that “The company also allegedly tried to intimidate physicians and researchers who questioned the safety of Vioxx.”

Whitehouse Station, N.J.-based Merck said in a statement that Merck acted responsibly. “We intend to defend ourselves against the complaint,” said Ron Rogers. Merck has already agreed to settle about 50,000 claims for damage from Vioxx for $4.85 billion, all being handled out of a New Orleans District Court. At the present time the heart attack victims, or their survivors, are supposed to be receiving payments.

Florida joins Alaska, Louisiana, Michigan, Mississippi, Montana, New York, Texas, Utah and New York City which have all brought substantially similar complaints against Merck. #

A Florida man admits he is guilty of defrauding a mortgage company.

Robert Guest, 44, of Orlando pled guilty in Alabama to one felony count of conspiracy in the scheme that involved the purchase and reselling of more than 200 homes, many in Florida.

Altogether the fraud cost  Countrywide Loans about $2 million.

Here is how it would work.

Guest would buy a home in Alabama, Florida, or Tennessee. Generally they were homes with low value, but he would arrange to sell to an investor at an inflated price.  The investor gets a loan for 80 percent. 

Then Guest pays him back his 20 percent.  In this case the lender, Countrywide, was then providing a 100 percent loan.  In Florida, Guest purchased homes in Orange and Seminole counties. 

Guest could face five years in prison. He also has to pay restitution and a fine of a a quarter of a million dollars.