2009 MAR · Case 1:06 - - 10149-RGS Document33 Filed03/04/09 Page 1 of32 FILED IN CLERKS OFFICE...

Case 1: 06 - - 10149-RGS Document33 Filed 03/04/09 of32

FILEDIN CLERKS OFFICE

UNITED STATESDISTRICTCOURT

DISTRICTOFMASSACHUSETTS2009 MAR - :

)UNITED STATES OF AMERICA , et al. , ex rel.

ADAM B.RESNICK ,

Plaintiffs

Civil Action . No.06-10149 -RGS

OMNICARE, INC ., RUBIN SCHRON,

LEONARD GRUNSTEIN , MURRAY FORMAN , )MARINER HEALTH CARE, INC. , andSAVASENIORCARE ADMINISTRATIVE

SERVICES, LLC

)

)FILED UNDER SEAL

Defendants.

COMPLAINT OF THE UNITED STATES

This is an action to recover treble damages, restitution , and civil penalties under the False

ClaimsAct, 31U.S.C.S 3729-33, and thecommon law for the submission of falseclaimsto

federal health care programs as a result of a kickback that defendant Omnicare , Inc.

("Omnicare" ) offered and paid , and that the remaining defendants , Rubin Schron, Leonard

Grunstein, Murray Forman , Mariner Health Care, Inc.( Mariner ) , and SavaSeniorCare

Administrative Services LLC ( , solicited and / or received , in violation of the federal anti

kickback statute, 42 U.S.C. 1320a- 7b(b).

Introduction

Omnicare is a large nursinghome pharmacy, and Mariner and Sava operate nursing

homes. OmnicarepaidMariner and Sava $ 50 million to induce them to sign long- term

pharmacy contracts pursuant to which they steered theirnursing homepatients, including

Medicare andMedicaid patients, to Omnicare for pharmacy dispensing services. The

Case 1:06 - - 10149-RGS Document 33 Filed 03/04/09 of 32

defendants, including individual defendants Schron , Grunstein , and Forman , conspired with

Omnicare to disguise the $ 50 million kickback as payment for a Mariner business unit called

MarinerMedicalSupply ( . thetimeofOmnicare'sagreementto pay the $50 million,

MMS had only two employees and no tangible assets apart from accounts receivable valued at

less than $ 3 million.

Jurisdiction and Venue

1 . This Court has subjectmatter jurisdiction under 28 U.S.C. 1345. The Court has

supplemental jurisdiction to entertain the common - law causesof action under 28 U.S.C.

$ 1367 a )

2 . The Courtmay exercise personaljurisdiction over the defendants,

and venue is appropriate in this Court, under 31U.S.C. 3732( a ), because atleast three of the

defendants Omnicare , Mariner, and Sava transact or transacted business in this District, and

because allof the defendants submitted caused to be submitted , or conspired to submit false

claimsin this District.

The Parties

3 . PlaintiffUnited States, acting through the DepartmentofHealth and Human

Services (“HHS” ), administers the Health Insurance Program for the Aged and Disabled

established by Title XVIIIofthe Social Security Act, 42 U.S.C. 1395, et seq. (Medicare), and

Grants to States for MedicalAssistanceProgramspursuantto TitleXIX of theSocialSecurity

Act, 42 U.S.C. 1396 et seq. (Medicaid).

4 Relator Adam Resnick is a resident of Illinois

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5 . Defendant Omnicare is a Delaware corporation with headquarters in Covington,

Kentucky . Omnicare isthe nation's largest provider of pharmacy services to nursing homes and

other long- term care facilities. Through contracts with these facilities, itdispenses drugs to

approximately 1.4 million long- term care residents in 47 states, including Massachusetts.

6 . Defendant Rubin Schron is a residentofNew York . At all relevant times,

defendantSchron directly or indirectly controlled defendants Sava and Mariner.

7 . DefendantMurray Forman is a residentofNew York. Heis the employeeof

MetCap Securities , LLC (“MetCap ) , an investment bank. At all relevant times, defendant

Formanacted as defendantSchron's agentin connectionwith the conduct allegedherein.

8 . DefendantLeonardGrunstein is a residentofNew Jersey. Heis the principal

owner ofMetCap. Heis also a lawyer. At all relevant times, defendantGrunstein acted as

defendantSchron'sagent in connection with theconductalleged herein.

9 . Defendant Mariner is a Delaware corporation with headquarters in Atlanta ,

Georgia. Priorto beingacquired on December 10, 2004,Mariner was a public company and one

of the nation's largest nursing homechains, operating approximately 252 nursing homes

representing approximately 32,000 nursinghome beds. After being acquired on December 10 ,

2004, privately-heldMariner continued to operate numerousnursing homes, including atleast

two nursing homes in Massachusetts.

10 . DefendantSava isa privately-held Delawarelimited liability companywith

headquartersin Atlanta, Georgia. Sava operatesnumerousnursinghomes, includingat leasttwo

nursinghomes in Massachusetts.

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LegalBackground

The Anti-Kickback Statute

11. The federal anti-kickback statute , 42 U.S.C. 1320a - ) ( AKS” ), arose out of

congressional concern that remuneration and gifts given to those who can influence healthcare

decisionswould result in goodsand servicesbeingprovided that aremedically unnecessary ,of

poor quality, or evenharmfulto a vulnerable patientpopulation. Toprotectthe integrityofthe

Medicare andMedicaid programs from these harms, Congress enacted a prohibition againstthe

payment ofkickbacks in any form . First enacted in 1972, Congress strengthened the AKS in

1977and 1987 to ensurethatkickbacksmasqueradingas legitimatetransactionsdid notevadeits

reach . See Social Security Amendments of 1972 , Pub L.No. 92-603, 242 b ) and (c) ; 42

U.S.C. 1320a- 7b,Medicare-Medicaid Antifraud and Abuse Amendments, Pub. L.No.95-142;

Medicare andMedicaid Patient and Program Protection Actof1987 Pub. L.No. 100-93.

12. TheAKS prohibits any person or entity from offering,making, soliciting, or

accepting remuneration , in cash or in kind directly or indirectly, to induce or reward any person

forpurchasing, ordering, or recommending or arranging for the purchasing ororderingof

federally- fundedmedicalgoodsor services:

(b ) Illegalremunerations

(1) whoeverknowingly and willfully solicitsorreceives any remuneration ( includingany kickback, bribe, or rebate) directly or indirectly, overtly orcovertly, in cash or inkind-

( A ) in return for referringan individual to a person for the furnishingorarranging forthe furnishingofany item or service for which paymentmay be made in whole or inpartunder a Federalhealth care program , or(B ) in return for purchasing, leasing, ordering, or arranging for or recommendingpurchasing, leasing, or orderingany good, facility, service, or item forwhich paymentmay bemade in whole or in part under a Federalhealth care program , shallbe guilty


ofa felony and upon conviction thereof, shall be fined notmore than $25,000 orimprisoned fornotmore than five years, orboth .

( ) whoever knowingly and willfully offers or pays any remuneration ( including anykickback, bribe, or rebate ) directly or indirectly, overtly or covertly , in cash or in kindto any person to induce such person-( A ) to refer an individual to a person for the furnishing or arranging for the furnishingof any item or service for which paymentmay be made in whole or in part under aFederal health care program , or(B ) to purchase, lease, order, or arrange for or recommend purchasing, leasing, orordering any good, facility , service , or item forwhich paymentmay be made in wholeor in part under a Federal health care program , shall be guilty of a felony and uponconviction thereof, shall be fined notmore than $ 25,000 or imprisoned for notmorethan five years, or both.

42 U.S.C. 1320a- ) (1) , (2 ). Violation of the AKS also can subject the perpetrator to

exclusion from participation in federalhealth care programsand effective August 6 , 1997, civil

monetary penaltiesof $ 50,000 per violation and three times the amountofremuneration paid. 42

U.S.C.$ 1320a-7 (b ) (7) and 42 U.S.C. 1320a-7a a ) (7) .

13 TheOffice of the InspectorGeneralofHHS(“ HHS- OIG ) hasadvisedthat, if the

purchase price for a business acquisition is in reality a fee to induce therecipientof the payment

to refer business reimbursed by Medicare or other federal programs, the payment of the

remuneration violates the AKS. When determining the true intentof such a payment, one

relevant factor iswhether the amountpaid reflects the fairmarket valueofthe acquired business.

When determiningthe market valueof goodwill and other intangibleassetsofa healthcare

entity that refers business reimbursed by Medicare or other federalprograms traditionalmethods

of valuation not comport with the prescriptionsofthe anti -kickback statute. ” For example , a

paymentmade for a referral stream isnot reflective of fair market value if the referrals are for

businessreimbursedby federalprograms. See Letter from D.McCarthy Thornton, HHS-OIG , to

T.J.Sullivan, IRS, Dec.22, 1992, available at

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http://oig.hhs.gov/fraud/docs/safeharborregulations/acquisition122292.htm . See also HHS- OIG

SpecialFraud Alert, Dec. 19, 1994 (advising that, in the context of a transaction involving

entities that receive reimbursementfrom federal health care programs, market value

reflect an arm's length transaction which has notbeen adjusted to include the additionalvalue

which oneorboth of thepartieshas attributed to thereferralofbusinessbetween them .

B. The False ClaimsAct

14. The False ClaimsAct provides, in pertinentpart, that

( a) Any person who ( 1) knowingly presents, or causes to bepresented ,to an officer or employee of the United States Government or amember of the Armed Forces of the United States a false or

fraudulent claim for payment or approval; ( 2 ) knowingly makes,uses, or causes to bemade or used, a false record or statement to

get a false or fraudulent claim paid or approved by the

Government; (3 ) conspires to defraud the Government by getting afalse or fraudulent claim allowed or paid; ...or 7 ) knowinglymakes, uses, or causes to be made or used, a false record or

statement to conceal, avoid, or decrease an obligation to pay or

transmitmoney or property to the Government

is liable to the United StatesGovernmentfor a civilpenalty ofnotless than $ 5,000 andnotmore than $ 10,000, plus 3 times theamountofdamageswhich theGovernmentsustains becauseof theact ofthat person.

(b ) Forpurposesof this section, the terms“ knowing and

“ knowingly mean that a person, with respect to information - 1)has actual knowledge of the information; ( 2) acts in deliberateignorance of the truth or falsity of the information; or ( 3) acts inreckless disregard of the truth or falsity of the information,

andnoproofof specific intent to defraud is required.

31U.S.C. 3729(a ), (b ).

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15 . Pursuant to the Federal CivilPenalties Inflation Adjustment Act of 1990, as

amended by the DebtCollection ImprovementAct of 1996 , 28 U.S.C. 2461(notes), and64

Fed. Reg. 47099,47103 ( 1999), the False ClaimsAct civil penalties were adjusted to $ 5,500 to

$11,000 for violations occurring on orafter September 29, 1999.

TheRelationshipBetweenOmnicare'sPharmacy BusinessAndMedicaid And Medicare

16 Omnicare's principal business is to fill prescriptions and to deliver drugs to

patients in long-term care facilities , including Mariner and Sava nursing homes. When

Omnicaredeliversdrugs to patients in Marinerand Sava nursinghomes, itsubmits

reimbursementclaims on behalf of those patients to their insurers, includingMedicaid and, since

January 1, 2006 , prescription drug sponsors actingon behalf ofMedicare Part D ( Part

sponsors ).

Medicaid

17. Medicaid is a joint federal-state program thatprovideshealth care benefits for

certain groups, primarily the poor and disabled. The federal portion of each state's Medicaid

payments, knownas theFederalMedicalAssistancePercentage(“ FMAP ) is based on the

state's per capita incomecompared to the national average. 42 U.S.C. ) Amongthe

states, the FMAPis at least 50 percent and ashigh as 83 percent.

18. TheMedicaid programsof all states reimburse for prescription drugs. The vast

majority of states award contracts to private companies to evaluate and to process claims for

paymenton behalfofMedicaid recipients. Typically, after processing the claims, these private

companies then generate funding requests to the state Medicaid programs, which in turn obtain

federal fundsfrom the United States.

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19 Omnicare is a party to provider agreements with each of the state Medicaid

programsto which it submitsdrugreimbursementclaims. In Massachusetts, forexample,

Omnicare has a provider agreement with MassHealth Massachusetts regulations provide that

“ All pharmacies participating in MassHealth must comply with the regulations governing

MassHealth, includingbutnotlimited to MassHealth regulations set forth in 130 CMR 406.000

and 450.000. ” TheMassachusettsregulationat 130 CMR 450.261in turn provides: All

membersand providersmustcomplywith all federaland state laws and regulationsprohibiting

fraudulentacts and false reporting, specifically including but not limited to 42 U.S.C. 1320a- 7b

[the federal anti-kickback statute] .”

Medicare

20 Medicare is a federally funded and administered health insurance program for

certain groups, primarily elderly and disabled persons. HHS administers theMedicareprogram

through the Centers forMedicare & MedicaidServices( ) .

21. Medicare Part D , a voluntary prescriptiondrug benefit program forMedicare

enrollees , became effective January 1, 2006 .

22. Medicare Part D coverage is offered through private companies, known as Part D

sponsors, that contract with CMSto administer prescription drugplans. CMS gives each Part D

sponsor advance monthly payments consisting ofthe Part D sponsorplan's direct subsidy per

enrollee (which is based on a standardized bidmade by the Part D sponsor), estimated

reinsurance subsidies for catastrophic coverage, and estimated low - income subsidies. 42 C.F.R.

423.315 , 423.329. Throughoutthe paymentyear, each timea Medicare beneficiary gets a

prescription filled under Part D the sponsornotifies CMS of the event , including the cost ithas

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incurred. At the endofthe payment year, CMSreconciles the advance payments paid to each

Part D sponsor with the actual costs the sponsorhas incurred. If CMS underpaid the sponsor for

low-incomesubsidiesor reinsurancecosts, it willmakeup thedifference. IfCMSoverpaid the

sponsor for low - incomesubsidies or reinsurancecosts, itwillrecoupthe overpaymentfrom the

sponsor. After CMS reconciles a plan's low - income subsidy and reinsurance costs , it then

determines risk-sharing amounts owed by the plan to CMSor by CMSto the plan related to the

directsubsidy bid. Risk - sharing amounts involve calculations based on whether and to

whatdegree a plan'sallowablecosts per beneficiary exceeded or fellbelow a target amountfor

the plan by certain threshold percentages. 42 C.F.R. 423.336 .

23. Part D sponsors enter into subcontracts with many pharmacies to provide drugsto

theMedicarePart D beneficiaries enrolled in their plans. These includesubcontracts with long

term care pharmacies , such as Omnicare.

24 When a long-term care pharmacy dispenses drugs to a Medicare beneficiary, it

submits a claim electronically to the beneficiary'sPart D sponsor and receives reimbursement

from the sponsor for the portionofthedrug costnotpaidby the beneficiary. The Part D sponsor

thennotifiesCMSofthe drug dispensingevent includingthe amount it has paid to the

pharmacy. CMSuses that information at the end of the paymentyear when it reconciles its

advance payments to the sponsor with the costs that sponsorhas incurred throughout the year.

25. Part D sponsorsmust certify in their contracts with CMSthat they agree to

comply with allfederal lawsand regulationsdesigned to preventfraud, waste, and abuse,

including , butnot limited to, the anti-kickback statute . 42 C.F.R. 423.505 h ( 1).

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Case 1 :06 - - 10149-RGS Document 33 Filed 03/04/09 of 32

26 . CMSregulations require that allsubcontracts between Part D sponsors and

pharmacies contain languageobligating the pharmacy to comply with all applicable federallaws,

regulations, and CMS instructions. 42 C.F.R. 423.505( i ) ( ) ( iv) . Omnicarehas enteredinto

subcontractswith the vast majority ofMedicare PartD sponsors.

In 2003, Prior To The2004 Kickback ,

Omnicare And MarinerNegotiated A Five- Year Pharmacy Contract

27. In approximately early 2003, Mariner issued a request for proposals to suppliers

of pharmacy services. Severallargepharmaciessubmitted proposals. As one of the largest

nursing homepharmacy customers in the country , Mariner had considerable leverage in

resulting negotiations. Ultimately, Marinerselected Omnicare. To secure the Mariner business,

Omnicare agreed that the parties' pharmacy contractwould include a formulary savings

guarantee ” provision pursuant to which Omnicare committed that its drug -switching programs

would saveMarinerat least$ 2.5millionperyear, orOmnicare wouldpayMarinerthe

difference . The Omnicare-Mariner contract ( the “ 2003 Pharmacy Contract effective April

1, 2003, and had a five-year and four-month term .

28. After the signingofthe 2003 Pharmacy Contract,MarinerbecameOmnicare's

largestcustomerin termsofbeds served. In 2004, the 2003 PharmacyContractwith Mariner

generated approximately $ 155 million in revenues and $26million in profits for Omnicare.

The Backdrop To TheKickback: RaisingCash ForThe PurchaseOfMariner

29. On June 29, 2004, Mariner announced it wasbeingsold for approximately $ 1

billion to a new entity , NationalSenior Care , Inc., which was backedby defendant Schron.

Defendants Forman and Grunstein had proposed this transaction to defendant Schron. The

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acquirers intended to divide Mariner's nursinghomes between post-acquisition Mariner and

newly-createdSava. To finance the transaction, an investmentbank, CreditSuisse, was to

provide a mortgage ofapproximately $800 million, while defendant Schron was responsible for

providingapproximately $ 200 million in equity. NationalSenior Care's acquisition ofMariner

ultimately closed on December 10, 2004.

30. Duringthe period between June29and December10, 2004, defendantsForman

andGrunstein attempted to arrangetheMarinertransaction so that their client, defendantSchron,

would have to contribute as little cash as possible. Defendant Forman , acting as Schron's agent,

suggestedthatoneway to collect cash would be forpost- acquisitionMariner to sell the rightto

providepharmacyservicesto itsnursinghomes, butFormanwas warnedthat selling therightto

providepharmacyservicestoMarinerwould constitutean illegalkickback. Despitethis

warning , defendants Forman and Grunstein pursued a plan to sell the rightto provide pharmacy

services toMariner. Specifically , they planned to sell the right to Omnicare .

31. To accomplish their goal, defendants Forman and Grunstein , acting as agents of

defendantSchron directedMarinerto send Omnicare a noticedated November23, 2004 the

“ Termination Notice ) , stating thatthe 2003 Pharmacy Contractwould be terminated upon the

closing of the Mariner acquisition . At the time, Mariner's senior executives were generally

satisfied with the 2003 Pharmacy Contractwith Omnicare and actually hadno desire to terminate

it. Likewise, neither defendant Forman nor defendant Grunstein ,nor their principal, defendant

Schron , actually had a desire to terminate the 2003 Pharmacy Contract. Rather, defendants

Forman and Grunstein directedMariner to send the TerminationNotice with the hopethat

Omnicare then would bewilling to pay Mariner to withdraw the Termination Notice .

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When Omnicare Asked That The Termination Notice Be Withdrawn,

Defendants Forman AndGrunstein Suggested Omnicare BuyMMS.

32 As a result of theTermination Notice, Omnicare feared losing the Mariner

businessand its associated revenuesand profits. OnDecember 2 , 2004, Omnicare'sChief

ExecutiveOfficer, JoelGemunder, and ChiefFinancialOfficer, David Froesel, metwith

defendantsForman and Grunstein and others. Duringthemeeting, the Omnicareexecutives

expressed their desire thatMarinerwithdraw the TerminationNotice. DefendantsForman and

Grunstein, acting as agents of defendant Schron , then proposed that Omnicare purchase

Mariner'sMMSunit. Atthe time, Marinerwas usingMMS, whichhadonly two employees and

less than $3 million in tangible assets, to arrange for thedelivery of enteral ( i.e. feeding tube)

supplies to Marinernursing home patients and then to billMedicare Part B for those supplies.

33 At the December2 , 2004, meeting, or shortly thereafter, defendantsFormanand

Grunstein explained that there was a " hole in defendant Schron’s financing for theMariner

acquisition , and that cash from Omnicare could fill that hole .

TheDefendantsWereWarned That ConditioningThe WithdrawalOf The TerminationNoticeOnOmnicare'sPurchaseOfMMS

Would ConstituteAn IllegalKickback

34. During the December 2, 2004 meeting, Omnicare's CEO , Gemunder, initiated a

conference callwith Omnicare's regular outside counsel on healthcare regulatory issues

(hereinafter referred to as“ Omnicare'soutsidecounsel ) . Omnicare'soutside counseltold the

participantsatthe meeting that it would beillegal forMariner to condition the withdrawal of its

Termination Notice on an agreement by Omnicare to purchase MMS, because such a condition

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Case 1: 06 - - 10149-RGS Document33 Filed 03/04/09 of32

would show thatOmnicare'spayment for MMSalso was in exchangeforMariner'sagreementto

continue referringpatients to Omnicare for pharmacy services.

Omnicare's Term Sheet Tying Its Purchase OfMMSToMariner's WithdrawalOf The Termination Notice.

35. OnDecember 4 , 2004, Omnicare circulated a term sheet to defendants Forman

andGrunstein and others. The term sheet provided inter alia, for the withdrawal ofMariner's

Termination Notice, and for Omnicare to buy MMS for $ 50 million , with $40 million to be paid

at the closing of the purchase of [MMS and 10millionto paid six monthslater. The term

sheet further provided that( 1) the existing2003 Pharmacy ContractbetweenMariner and

Omnicare would be amended to ensure that all ofthe then -existing Mariner nursing homes would

remain under thetermsof the 2003 Pharmacy Contract with Omnicareafterthe larger Mariner

transaction closed , even ifsomeof those homeswere sold ; and ( 2 ) thenew Sava entity would

enter into a pharmacy contract with Omnicare on substantially the same terms” as the 2003

Pharmacy Contract tween Omnicare andMariner.

OmnicareAgreed To BuyMMSAtSomePointIn TheFutureFor $50 Million,But To Pay $ 40 Million Of The Purchase Price Immediately .

36 . OnDecember 6 , 2004, Omnicare's attorneys circulated a draftagreement for

Omnicare to purchaseMMS for $40million. The draftagreementprovided that Omnicare

would pay the entire purchase price up front, before the closing of theMMStransaction . The

purpose of Omnicare paying the $ 40 million up front was to enable defendant Schron to fill the

hole in his financing for the larger Mariner transaction .

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37 Defendants Forman andGrunstein, acting as agents of defendant Schron , later

increased the price ofMMS to $50 million , with $ 40 million still to be paid up frontbefore the

closingoftheMMStransaction.

When Omnicare's Board Met To Consider The Proposed Acquisition

OfMMS, The Supposedly Unrelated Issue Of The Value OfKeeping Mariner's Pharmacy Business Arose.

38 On the afternoon ofDecember 7 , 2004, Omnicare's board of directors met to

consider the proposed acquisition ofMMS. The internalOmnicarememorandum for the

meetingexplained that: “ Forthetotal anticipated consideration to the seller of$ 50,000,000, plus

estimated transaction-related expensesof $285,000, Omnicarewill receivetangibleassets with

an estimated net book value of $ 2,904,000 consisting of accounts receivable) and create

goodwilland other intangibleassets of $47,381,000.

39. One of Omnicare's investmentbankers in attendance at the Omnicare board

meeting specifically noted the valueof the pharmacy revenues and profits that Omnicare would

lose ifOmnicaredid notpurchaseMMSand theMarineracquirerswentahead with their threat

to terminate the 2003 Pharmacy Contract. The bankerwrote on the boardmeeting

memorandum : “ YEARS LEFTON CURRENT DEAL: $ 155MM /REVS $ 26MM /OP

PROFITS.” Omnicare'sboardpreservedthosepharmacy revenues and profits by voting to

approve the acquisition ofMMSfor $ 50million, with $ million to be paid up frontbeforethe

MMSclosing

Knowing Defendant Schron Wanted Omnicare's $40 Million Up-Front Payment To CloseOn The Larger Mariner Transaction , Omnicare Exercised Its Leverage To Compel The

Schron - Controlled Entities To Sign New 15 -Year Pharmacy Services Contracts.

40 Priorto December 6 , 2004, when Omnicare first offered to pay Schron $

14


million up front forMMS, Omnicare hadhoped only to keep the 2003 Pharmacy Contract in

place for post-acquisitionMariner and Sava. Lateon December 7 , 2004 however,Omnicare

sentMarinera listofproposed“materialchanges” to the existingOmnicare-Mariner pharmacy

relationship . Omnicare's list proposed that the parties enter into entirely new agreements that

would supersede the existing 2003 Pharmacy Contract ,which stillhad well over three years

remaining on its term . Omnicare proposed that thenew contracts have 15-year terms and omit

the 2003Pharmacy Contract's formulary" savings guarantee” underwhich Omnicare was

obligated to payMarinerup to $ 2.5 million each year.

41. Duringthe following two days, Omnicare, Mariner, and Savanegotiated the

specific terms of new pharmacy contracts . Mariner and Sava, under the direction of defendants

Forman and Grunstein, who in turn were acting as agents ofSchron, agreed to all of the

materialchanges” that Omnicarehad proposed, includingthe15- year termsthatwould run until

2019 and the deletion of any formulary savings guarantees for the nursing homes.

42. Omnicarenegotiated the two transactions-- thenew pharmacy contracts and

agreementto buy MMS atthe same time, andwith the sameparties: defendants Forman and

Grunstein , acting as agents ofdefendant Schron , who controlled defendantsMariner and Sava.

Attorneys Warned The Defendants ThatOmnicare's Purchase OfMMSLookedLikeConsiderationFor TheNew PharmacyContracts.

43. The defendantsunderstoodthat it was illegalfor them to tie the new pharmacy

contractsto Omnicare'sagreementto purchaseMMS, and they recognized that, ifdiscovered,

their arrangementcould expose them to an enforcementaction. Omnicare soughtadvice from

Omnicare's outside counsel on how to minimize the risk of such an action . Among other things ,

Omnicare'soutside counseladvised the partiesto push off the date ofthe closingofOmnicare's

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acquisition ofMMS, so that itwould notoccur near the time of the signing of new pharmacy

contracts .

44. Defendant Grunstein's law firm represented theMariner acquirers in their

negotiationswith Omnicare regarding both thenew 15 - year pharmacy contracts and Omnicare's

purchase ofMMS. On December 8 , 2004,defendantGrunstein's law partnersentan e -mail to

defendants Forman and Grunsteinand to Darren Alch, a health care attorneyatdefendant

Grunstein's firm . The e-mail concerned the structure of the sale of MMS to Omnicare , and

whether MMS first should be assigned by Mariner to a new limited liability company controlled

by defendant Schron, which then would sellMMS to Omnicare:

[ W ]ould having repsand warranties from [NationalSenior Care andMariner

directly to Omnicare a bigger problem ( tying the two transactionstogether) than itsolves ( helping to exculpate the Schron LLC] from liabilityfor Mariner operations)? Oris the issue just that, ifnoticed andinvestigated by theregulators we'llhave to defend against thepossibleallegations that the [MMS sale and Pharmacydeals are tied together andpartof the consideration for each other ?

I understand the back - to -back signing of Asset Purchase Agreements),

regardless of thedelay between closings, creates a calculated risk , in the

event that OIG investigates the transaction ; right, Darren ? [Darren thinks

that three or fourmonthsdelay between the closings (or longer, obviously)

would be better , but a closingattheend February ( subject to checkingwith Omnicare's outside counsel again ) ...mightbe OK --notsafe, butassuming no one atOIG is really watching closely .

(Emphasis added.)

45 In an e -mailto defendants Forman and Grunstein and others on December 9 ,

2004, defendantGrunstein's law partner further cautioned :

In connection with the parties [ ] intended sale of the assets ofMarinerMedical Supply , Inc.(MMS) to Omnicare, Inc.(immediately post-mergerbut pre- financing), healthcare regulatory lawyers for both sides told us that

16


a simultaneous sale of that business could be viewed as

consideration for the pharmacy contracts that the partieswant to enterinto at the closing

( Emphasisadded.)

On TheSameDay ThatOmnicare Paid $ 40 Million To A Schron- Controlled Entity , ItObtained New 15 - Year Pharmacy Contracts From Other Schron-Controlled Entities.

46 On December 10 2004, MarinerassignedMMSto a new Schron-controlled

company, HSA Equipment LLC ( ) . That sameday , defendant Schron , through HSA ,

signed a purchase agreementwith Omnicare in which Omnicare agreed ( a) to buy MMSat some

point in the future from HSA for a total price of $ 50 million, (b ) to pay $ million of the

purchase price to HSA immediately ( i.e., on December 10, 2004), and (c) to pay the final $ 10

million six months after the closingdate oftheMMSsale.

47. Omnicare knew that, in order fordefendants Schron, Forman, andGrunstein to

close their acquisition ofMarineron December 10, 2004, they needed Omnicare's$ million

up- front payment forMMS. At the sametime, Omnicare wanted to be sure that theMariner

acquirers signed the new pharmacy contracts with Omnicare. Accordingly , and notwithstanding

Omnicare's outside counsel's advice that the pharmacy contracts and the MMS acquisition had

to be independent, Omnicare insisted that Mariner and Sava sign the new 15-year pharmacy

contracts with Omnicare prior to Omnicare paying the $40 million. Mariner and Sava complied

and signed the new contracts first.

48. Asthe partieshad contemplated, defendants Schron, Forman, and Grunstein used

Omnicare's $ 40 million up-front payment for MMS to fill the hole in defendant Schron's

financing , which enabled him to close on the larger Mariner acquisition on December 10 , 2004 .

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The Defendants Knowingly Failed To DiscloseAllRelevant Facts To Omnicare's OutsideCounsel

49 Omnicarehadasked its outsidecounsel to approveits simultaneouspaymentof

$40 million to a Schron-controlled entity and execution of new 15 -year pharmacy agreements

with Marinerand Sava.

50. Omnicare's outside counsel told Omnicare that he would approve the

simultaneoustransactionsonly if they were independentof each other.

51. The defendants led Omnicare's outside counsel to believe that the two

transactionswere independentof each other bymisrepresentingto him thatMarinerand Sava

were not controlled by defendant Schron, but by Harry Grunstein , defendant Leonard

Grunstein's brother. In fact, Harry Grunstein , a resident of Israel, was only the titularowner of

Marinerand Sava . Hewas also the titular owner ofNationalSenior Care, the shell entity that

was acquiringMariner (on paper). Harry Grunstein contributed no money to purchase Mariner,

Sava, or NationalSenior Care.

52. Omnicare's outside counsel conditioned his approvalof the simultaneous

transactionson defendantSchron andHarryGrunstein signing certificatesattestingto their

independence each other.

53 DefendantSchron andHarryGrunstein signed such certificateson December10,

2004. Both certificates contained factual misrepresentations . For example , in the certificate he

signed on December 10, 2004 defendantSchron represented that, among other things, he did not

haveor intendto acquire any equity interest in any entity controlledby Harry Grunstein. This

representationwasdirectly contrary to two option agreementsSchron signed that sameday on

18


behalfof anotherofhis entities called Cammeby'sEquity HoldingsLLC ( Cammeby's . One

option agreement gave Cammeby's the right to own 66.67 % of Mariner or NationalSenior Care

in exchange for Cammeby'sforgiving a $ 75 million loan that ithad extended to NationalSenior

Care . The other option agreement gave Cammeby's the right to own 99.999 % of Sava's parent

(a holding company ) in exchange for Cammeby's forgiving a $ 100 million loan that it had

extended to that entity . Through the combination of these option agreements and outstanding

loans, Schron effectively controlled Mariner and Sava . Schron also exercised practicalcontrol

over Mariner and Sava because hehad installed Harry Grunstein as their titular owner.

54. The certificatesby defendantSchron andHarryGrunstein also falsely represented

that noneofHarry Grunstein's relatives had an equity interest in SMV, another Schron entity . In

fact, Harry Grunstein'sbrother, defendant Leonard Grunstein, had an equity interest in SMV.

55. Omnicare understood that, notwithstanding the signed certificates, Schron and

Harry Grunstein were notreally independent, and that defendantSchron controlled the nursing

homeentities thatagreed, on the sameday that Omnicaremadeits $40 million up- frontpayment,

to arrangefor the purchase of allof their patients' drugs from Omnicare for the next fifteen

years. Although Omnicare's$ 40million up- paymentfor MMSwasowed to Schron,

Omnicarewired the paymentinto an account for the benefitof, interalia, Mariner and Sava, the

entitiesnominally owned by Harry Grunstein that entered into the new 15- year pharmacy

contractswith Omnicare. Moreover, Omnicare laterpaid the remaining$10 million forMMSto

Mariner, notto Schron.

56 . Omnicare's outside counsel approved the simultaneous transactions in reliance on

thefactually inaccuratecertificates andmisrepresentationsconcerningSchron'sand Harry

19


Grunstein'sindependence. Had Omnicare'soutside counselknown thatthe certificates

contained factualmisrepresentations, hewould nothave given his approval.

Fabricated Documents

57 . In August and September 2006 , the United States issued subpoenas to Omnicare

and various entities involvedwith Marinerthatwerecontrolledby defendantSchron.

58. After receiving the subpoenas, defendants Grunstein , Forman , and Schron created

new documents relating to the sale ofMMS and backdated them to December 10 , 2004.

DefendantSchron signed these new documents.

59. These post-hoc documents were intended to make it appear that, on December 10,

2004, Schron-controlled HSA paid Mariner $ 50 million for MMS, when in factHSA paid

nothing forMMS. The documents also were intended to create a false justification to explain

why Omnicarepaid the final $ 10 million owed on its purchase ofMMS to Mariner, one of the

entities thathad signed new pharmacy contractswith Omnicare, instead of to HSA, the party that

ostensibly had sold MMSto Omnicare.

False Claims

60. Asa resultofOmnicare's kickback, Mariner and Sava arranged for their nursing

homepatients drugs to be purchased from Omnicare after December 10 , 2004. Mariner and

Sava are contractually bound to arrange for the continuation of these kickback - induced purchases

from Omnicareuntilthe year 2019. None of thedefendantsdisclosed to MedicareorMedicaid

that claimsOmnicare submitted , or caused to be submitted, for drugspurchased forMariner and

Sava nursinghome patients resulted from Omnicare's paymentof a kickback to Mariner and

Sava. These claimswere ineligible for reimbursement because they were a result of the illegal

20


kickback

61. Omnicare has submitted , or caused to be submitted , thousands of false or

fraudulent claimsto MedicareandMedicaid for the kickback- induceddrug purchases for

Mariner and Sava nursing home patients. These claims include, for example, claimsOmnicare

submitted, or caused to be submitted , for drugsdelivered to oneMedicaid patientin a

Mariner Sava nursinghome in Massachusetts :

Rx Count

13

7

5

3

19

4

Days Supply351195

11

75

495

1910

7

233

18

108

1

1

9

6

8

1

Drug Product Name

ALENDRONATE SODIUMAMITRIPTYLINE HCL

AMPICILLIN SODIUMAZATHIOPRINE

BACLOFENCEFTRIAXONE SODIUMCEFUROXIME AXETIL

CIPROFLOXACIN HCL

CITALOPRAM HYDROBROMIDE

COLLAGENASECYCLOSPORINE

DEXTROSE 5 % -0.45 % SALINEDEXTROSE 5 % -NORMAL SALINE

DEXTROSE 5 % -WATERDULOXETINE HCL

ENOXAPARIN SODIUM

ESOMEPRAZOLE MAG TRIHYDRATEFAMOTIDINEFLUCONAZOLEFOLIC ACID

FUROSEMIDEGABAPENTIN

GENTAMICIN /SOD CHLORIDE

HEPARIN SODIUM ,PORCINEHYDROCHLOROTHIAZIDEHYDROCODONE BIT/ACETAMINOPHEN

1

1

Total Paid

$ 944.19

$ 30.6

$ 104.24

$ 78.07

$686.33

$649.18

$21.49

$ 6.68$ 81.78

$ 365.85

$ 737.82

$ 7.00

$ 4.80

$ 436.68

$ 24.19

$ 15,444.68

$ 242.53

$ 87.84

$ 11.91

$ 74.43

$ 6.23

$ 1,898.20

$ 177.44

$ 108.93

$ 20.80

$ 3.08

11

1

4

58

4

11

2

15

220

4

5

5

25

3

566

51

315

13

435

5

555

8

50

135

1 1

21


4

1

18

4

5

1

8

1

5

3

32

3

3

10

11

5

86

40

35

7

66

7

135

37

687

52

33

210

92

7

150

5

243

2

30

33

10

1

5

HYDROCODONE BITARTRATE /APAPHYOSCYAMINE SULFATEIBUPROFEN

INSULIN REGULAR , HUMANLACTULOSELEVOFLOXACIN

LIDOCAINE

LIDOCAINE HCLLISINOPRILLORAZEPAM

METHADONE HCL

METRONIDAZOLE

MORPHINE SULFATEMYCOPHENOLATE MOFETIL

NITROFURANTOIN MACROCRYSTALNITROFURANTOIN /NITROFURAN MACNORTRIPTYLINE HCL

NYSTATINOMEPRAZOLE

ONDANSETRON HCL

OXYCODONE HCLPANTOPRAZOLE SODIUM

PIPERACILLIN /TAZOBACTAM /DEX -IS

PNEUMOCOCCAL 23-VAL P -SAC VACPOLYETHYLENE GLYCOL 3350POTASSIUM CHLORIDE

PREDNISONEPREGABALIN

PROCHLORPERAZINE MALEATE

PROPOXYPHENE HCL

QUETIAPINE FUMARATERANITIDINE HCL

RISEDRONATE SODIUMSILVER SULFADIAZINESODIUM CL 0.9PC IRRIG . SOLN

SULFAMETHOXAZOLE / TRIMETHOPRIMTIZANIDINE HCL

1

9

$ 15.48

$ 3.55

$65.34

$ 133.42

$53.81

$ 81.71

$ 1,125.82

$3.49

$ 32.55

$ 13.72

$ 327.38

$ 22.85$ 75.32

$ 4,758.53$ 186.02

$ 26.94

$ 24.15

$ 23.19

$ 974.71

$ 321.11

$ 51.08

6.55

$ 825.58

$ 33.73

$ 46.26

$ 8.78

$ 112.14

$ 1,172.84

$ 6.10

$ 17.52

$ 2,354.59

$ 13.86

$ 388.63

$ 17.88

$ 441.60

$82.15

$ 197.60

1

2

2

3

1

3

2

21

13

1

2

11

2

45

5

412

306

3

14330

60

168

19

80

303

105

6

3

8

15

4

22


2TRAMADOL HCL

TRAZODONE HCL

VANCOMYCIN HCLZINC OXIDE

5

15

56

$8.08

$ 3.33

$ 5,212.97

$ 17.53

5

2 10

These claims also include, for example , claims Omnicare submitted , or caused to be submitted ,

for drugsdelivered to oneMedicare patient in a Mariner/Savanursing homein Massachusetts:

Rx Count

52

32

31

DrugProductNameZYPREXAMIRTAZAPINELEVOTHYROXINESODIUMLIPITOR

METOPROLOLTARTRATE

PROTONIXTAMIFLU

TOBRADEXSYNTHROIDTOBRAMYCIN SULFATE

Days Supply1560

960

930

90

784

3014

10

60

27

Total Paid

$ 13,861.39

$ 865.43

$ 323.00

$246.09

$239.62

$ 113.66$ 113.31

$68.34

$ 32.75

$8.34

1

1

2

1 1

Count One

(False ClaimsAct Presentation Of False Claims, 31U.S.C. 3729(a )( 1) ;AgainstOmnicare, Inc.)

62. PlaintiffUnited Statesrepeatsand reallegeseach allegationin each of the

preceding paragraphs as if fully set forth herein .

63. As a result of Omnicare's kickback payments to induce the other defendants to

purchase, order , or recommend or arrange for the purchasing or ordering of drugs from Omnicare

for Mariner and Sava nursing home patients, in violation of the anti-kickback statute, 42 U.S.C.

1320a- ) ( ) , allofthe claimsOmnicare presented, or caused to be presented, to Medicare

andMedicaid for those drugs are false or fraudulent. Accordingly , Omnicare knowingly

23


presented , or caused to be presented, false or fraudulent claims to officials of the United States in

violation of31U.S.C. 3729 a )( 1) .

64. By virtue ofthe false orfraudulentclaims Omnicare presented, or caused to be

presented, the United Stateshas suffered actual damages and is entitled to recovertreble

damagesplus a civilmonetarypenalty for each false claim .

Count Two

( False ClaimsAct: MakingOr Using False RecordsOr Statements To Cause Claims To Be

Paid, 31 U.S.C. 3729( a) ( 2) ;

AgainstOmnicare, Inc.)

65. PlaintiffUnited Statesrepeatsandreallegeseach allegation in each of the

precedingparagraphsas if fully set forth herein .

66 . Omnicare knowingly made, used, or caused to be made or used , false recordsor

statements to cause the United States to pay or approve false or fraudulent claims, in violation of

31U.S.C. ( a)( ). The false records or statements were the false certifications and

representations of full compliance with all federal and state lawsand regulations prohibiting

fraudulent actsand false reporting, includingbutnot limited to theanti-kickback statute, 42

U.S.C. -7b. Omnicare made or caused to bemade such false certifications and

representations in agreements under state Medicaid programsandMedicare Part D when seeking

to ensure thatMedicaidandMedicarewould reimbursefor the drugsthatOmnicaredispensed to

Mariner and Sava nursing homepatients.

67. Byvirtue ofthe false recordsor statementsOmnicaremade, used, or caused to be

madeor used the United States has suffered actualdamages and is entitled to recover treble

damages plus a civilmonetary penalty for each false claim .

24


Count Three

(False ClaimsAct: MakingOrUsing False Records OrStatements To Conceal, Avoid , Or

Decrease An Obligation To Pay Money To The United States, 31 U.S.C. 3729(a )(7) ;

AgainstOmnicare, Inc.)

68. Plaintiff United States repeats and realleges each allegation in each ofthe

precedingparagraphsas if fully set forth herein.

69. Omnicare knowingly made used, or caused to be made or used , false records or

statements to conceal, avoid , or decreaseMedicare Part D sponsors obligations to pay or

transmit money or property to the Government, in violation of 31U.S.C. 3729(a )( 7 .

70 The false recordsor statements were the false certifications and representations

Omnicaremade or caused to bemade in Medicare Part agreementswhen seeking to ensure

thatMedicarewould reimburse for the drugs that Omnicare dispensed toMariner andSava

nursing homepatients. Those agreements contained certificationsand representationsof full

compliance with all federal and state laws and regulations prohibiting fraudulent acts and false

reporting, including butnot limited to the anti-kickback statute, 42 U.S.C. .

71. The false recordsor statementswere submitted to the UnitedStates in conjunction

with sponsors agreements to operate one ormore plans pursuant to Part D of the Medicare

program , which includes an annualreconciliation process and risk- sharing arrangements.

Consequently , any low - incomesubsidy and reinsurance payments made to Part D sponsors as a

resultofOmnicare'sviolationsoftheanti-kickback statutewere owed to CMSin the

reconciliation process, as well as any risk - sharing amounts resulting from Omnicare's anti

kickback statute violationsthatwere paid to Part D sponsors under the risk-sharing

arrangements .

25


72 By virtue of the false recordsor statementsOmnicaremade, used, or caused to be

madeor used, the United States hassuffered actualdamagesand is entitled to recovertreble

damages plus a civilmonetary penalty for each false claim .

Count Four

( False Claims Act : Causing The Presentation Of False Claims, 31 U.S.C. 3729 (a )(1) ;

Against Rubin Schron, Leonard Grunstein Murray Forman, Mariner Health Care, Inc.,

and SavaSeniorCareAdministrativeServices, LLC)

73. PlaintiffUnited Statesrepeatsand reallegeseach allegation in each of the


74. Asa resultof the solicitation and receiptby defendants Schron, Grunstein,

Forman,Mariner, and Sava of Omnicare's kickback payments to obtain referrals ofMariner and

Savanursinghomepatients for drug purchases, in violation ofthe anti-kickback statute, 42

U.S.C. - ( ) , all of the claimsOmnicaremade, or caused to bemade, to Medicaid

andMedicarefor thosedrugs are false or fraudulent. Accordingly, defendantsSchron,

Grunstein, Forman, Mariner, and Sava knowingly caused false or fraudulent claims to be

presented to officials ofthe United States in violation of 31U.S.C. 3729(a )(1).

75. By virtue ofthe false or fraudulentclaimsthatdefendants Schron, Grunstein,

Forman, Mariner, and Sava knowingly caused to bepresented, theUnitedStateshas suffered

actual damages and is entitled to recover treble damages plus a civilmonetary penalty for each

false claim

26


Count Five

(False Claims Act Making Or Using False Records Or Statements To Cause Claims To Be

Paid , 31 U.S.C. 3729(a )(2 ) ;

Against Rubin Schron , Leonard Grunstein ,Murray Forman ,Mariner Health Care , Inc.,

and SavaSeniorCareAdministrativeServices, LLC)

76 PlaintiffUnited States repeats and realleges each allegation in each of the


77. Asa result of the solicitation and receiptby defendants Schron, Grunstein ,

Forman,Mariner, and Sava of Omnicare's kickback payments to obtain referralsofMariner and

Savanursing homepatients for drugpurchases, in violation of the anti-kickback statute, 42

U.S.C. - )( ), defendantsSchron, Grunstein , Forman, Mariner, and Sava knowingly

caused false recordsorstatementsto bemadeor used to cause the UnitedStatesto pay or

approve false or fraudulent claims. The false records or statements were the false certifications

and representationsoffull compliance with all federal and state lawsand regulationsprohibiting

fraudulentactsand false reporting, includingbut not limited to the anti-kickback statute, 42

U.S.C. 1320a-7b. DefendantsSchron, Grunstein, Forman, Mariner, and Sava caused such false

certifications and representations to bemade in agreements under stateMedicaid programsand

MedicarePart D when seekingto ensure that Medicaid andMedicarewould reimburse for the

drugsthat Omnicare dispensed to Mariner and Sava nursing homepatients.

78. By virtueofthe false recordsor statementsdefendantsSchron, Grunstein,

Forman, Mariner, and Sava caused to be made or used , the United Stateshas suffered actual

damages and is entitled to recover treble damages plus a civilmonetary penalty for each false

claim .

27


Count Six

(False ClaimsAct: Conspiracy To Submit False Claims, 31U.S.C. 3729 (a )(3) ;Against Defendants )

79 PlaintiffUnited States repeats and realleges each allegation in each ofthe

preceding paragraphsas if fully set forth herein.

80 Each ofthe defendantsconspired with the other defendantsto arrange for

Omnicareto makekickbackpaymentsin exchange for referralsofMariner and Savanursing

homepatients for drugpurchases, in violation of the anti-kickback statute, 42 U.S.C. 1320a

( ) ( 2 ), thereby causingallofthe claims, from on orshortly after December10, 2004, through

the present, to Medicaid and Medicare for those drugs, to be false or fraudulent. Accordingly,

each of thedefendants conspired to defraud the United Statesby getting false or fraudulent

claims allowed or paid , in violation of 31 U.S.C. 3729(a) ( 3) .

81. By virtue of the false or fraudulent claimsdefendants conspired to getallowed or

paid, the United States has suffered actual damages and is entitled to recover treble damages plus

a civilmonetarypenalty for each false claim .

CountSeven(False ClaimsAct: MakingOrUsing False Records Or Statements To Conceal, Avoid, Or

Decrease An Obligation ToPayMoney To The United States, 31U.S.C. 3729(a )( 7) ;Against Rubin Schron, Leonard Grunstein, Murray Forman,Mariner Health Care, Inc.,

and SavaSeniorCare Administrative Services , LLC)

82 Plaintiff United States repeats and realleges each allegation in each of the

precedingparagraphsas iffully set forth herein.

83. Defendants Schron , Grunstein , Forman, Mariner , Sava knowingly caused to

bemade or used false records or statements to conceal, avoid , or decrease Medicare Part D

28


sponsors' obligationsto pay or transmitmoney or property to the Government, in violation of31

U.S.C. 3729 a) )

84. The false records or statementswere the false certifications and representations

Defendants Schron, Grunstein, Forman , Mariner , and Sava caused to bemade in agreements

between Omnicare andMedicarePart D sponsorswhen seekingto ensurethatMedicarewould

reimburse for the drugs that Omnicare dispensed to Marinerand Sava nursing home patients.

Those agreements contained certificationsand representationsoffull compliance with all federal

and state lawsand regulations prohibiting fraudulentacts and false reporting, includingbut not

limitedto the anti-kickback statute, 42 U.S.C. - 7b .

85. The false records or statements were submitted to the United States in conjunction

with Part D sponsors' transmittalof costinformationto CMSfor use in the annualreconciliation

process. Consequently, if demanded a post- reconciliation payment from any such Part D

sponsor, itdemanded too little.

86 . By virtue of the false records or statements defendantsSchron, Grunstein,

Forman, Mariner, and Sava caused to bemadeor used, the UnitedStateshas sufferedactual

damages and is entitled to recover treble damages plus a civilmonetary penalty for each false

claim .

CountEight(UnjustEnrichmentAnd Disgorgement; AgainstOmnicare, Inc.)

87. PlaintiffUnited States repeats and realleges each allegation in each of the

preceding paragraphsas if fully set forth herein .

88. This is a claim for the recovery ofmonies by which Omnicare has been unjustly

enriched

29


89. By directly or indirectly obtaining government funds to which it was not entitled ,

Omnicare wasunjustly enriched, and is liable to account for and to disgorge such amounts, or the

proceeds therefrom , which are to be determined at trial, to the United States.

Count Nine

(Payment By Mistake; Against Omnicare, Inc.)

90 . PlaintiffUnited States repeats andreallegeseach allegationin each of the


91. This is a claim for the recovery ofmoniespaid by theUnited States to Omnicare

as a resultofmistaken understandingsof fact.

92 . The false claims that Omnicare presented to the United States were based upon

mistakenorerroneousunderstandingsofmaterialfact.

93 The United States, acting in reasonable relianceon the accuracy and truthfulness

of the informationcontained in the claims, paid Omnicare, directly or indirectly, certain sumsof

money to which Omnicare was notentitled, and Omnicare isthus liable to account for and to pay

such amountsto theUnitedStates.

Prayer For Relief

WHEREFORE , the United States demands and prays that judgment be entered in favor of

the United States as follows :

1 On CountsOne, Two, and Three under the False ClaimsAct, againstOmnicare,

Inc., for theamountof the United States' damages, trebled asrequired by law , and such civil

penalties as are required by law , together with such further relief asmay be just and proper.

30


2 On Counts Four, Five, and Seven under the False Claims Act, againstRubin

Schron, Leonard Grunstein , Murray Forman, Mariner Health Care, Inc., and SavaSeniorCare

AdministrativeServices, LLC, for the amountof theUnitedStates' damages, trebled as required

by law , and such civil penaltiesas arerequired by law , togetherwith such further reliefasmay

bejust and proper.

3 . On Count Six under the False ClaimsAct, against alldefendants, for the amount

ofthe United States damages, trebled as required by law , and such civilpenaltiesas are required

by law, together with such further relief asmay be just and proper.

4 . On Counts Eightand Nine, againstOmnicare, Inc., for unjust enrichmentand

paymentbymistake, for the damagessustained and/ oramountsbywhich Omnicarewasunjustly

enriched or by which Omnicare retained illegally obtained monies, plus interest, costs , and

expenses, and such further reliefasmay be just and proper.

31


Respectfully submitted,

MICHAEL F.HERTZ

Acting Assistant Attorney General

MICHAEL J. SULLIVAN

United States Attorney

Dated: March 4 , 2009

ByGREGG SHAPIRO

CHRISTINE WICHERS

Assistant United States Attorneys

One Courthouse Way , Suite 9200Boston ,MA 02210

(617) 748-3100

JOYCE R.BRANDA

DANIEL R.ANDERSON

LAURIE A.OBEREMBT

Attorneys, Civil Division

U.S.Departmentof Justice

P.O.Box 261, Ben Franklin Station

Washington, D.C.20044

(202) 514-3345

32

2009 MAR · Case 1:06 - - 10149-RGS Document33 Filed03/04/09 Page 1 of32 FILED IN CLERKS OFFICE...

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