Mar. 1—A judge has halted proceedings in a whistleblower lawsuit involving
A judge has also granted the Tsangs' request to restrict public access to documents filed in the civil case.
Attorneys for the Tsangs said the delay is necessary because they are "subjects/targets of a parallel federal criminal investigation involving the same or identical issues" outlined in the lawsuit.
The civil suit accuses the now-closed
The suit alleges Garden's submitted fraudulent bills to federal insurers and the sales agent,
"This case will remain stayed and administratively closed until either party moves to lift the stay and re-open the case after the criminal investigation and the related criminal proceedings, if any, against
Pharmacist resigned amid "questionable business practices'
Former Garden's pharmacy manager
Though the federal government so far has declined to intervene in the whistleblower lawsuit, the prosecutors have reserved the right to do so at a later date. This month, the
The lawsuit says
Turner suspected criminal wrongdoing shortly after she went to work at Garden's in
According to the lawsuit, Turner found that sale teams left prescription pads with doctors for the expensive compound creams that Medicare or TRICARE covered. The sale teams would later follow up with Levi to check on their commissions, she said.
"Sales agents talked openly about their commission relationship as they reported weekly to one of the pharmacy's owners,
Levi oversaw the commission payments and talked openly about them, the suit says, though he was "particularly secretive about his dealings with
Levi later closed
FBI agents had raided Lovelace Drugs prior to Levi's death.
Civil litigation delays and criminal charges
Turner filed her whistleblower lawsuit under seal in
The allegations in Turner's civil lawsuit are similar to those in criminal cases that resulted in the largest TRICARE fraud prosecution in
"The concern for defendants in that situation is that they would be subjected to extensive discovery (pretrial investigation documentation) in the civil matter that could be used against them in the criminal case," Johnson said.
"So, you can envision a situation where you are subjected to a seven-hour deposition (sworn testimony) in a civil case and the government uses the statements made in that deposition to bolster a criminal prosecution," he said. "Courts often recognize the gravity of that situation for that defendant and impose a stay of the civil matter"
If Turner's estate is successful in proving fraud against Gardens and the Tsangs, it would share in any recovery of TRICARE and Medicare funds, a feature of the whistleblower law.
"Knowing nothing about the case, my expectation is that the civil matter will go nowhere until the criminal case is concluded," Johnson said. "If the government is looking at the exact same conduct as in the whistleblower case and decided to move forward with a criminal prosecution, I will be shocked if they ultimately don't intervene in the whistleblower case."
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