Fraud in Fen-Phen Lawsuits?

First it was the Silicosis Debacle. Then it was the questionable asbestos claims and the blacklisting of several doctors used as experts by plaintiffs firms. Now there are new claims of fraud involving mass torts. This time its Fen-Phen.

As this article from the Philadelphia Inquirer reports:

"Spurred by allegations of massive fraud in the $5 billion class-action settlement over fen-phen diet drugs, federal investigators are conducting a nationwide criminal probe into tens of thousands of claims asserting heart damage from the pills.

The U.S. Attorney's Office in Philadelphia and the FBI are examining whether lawyers, doctors and medical technicians conspired to submit bogus claims, according to sources in the criminal justice system.

Investigators also are trying to root out former fen-phen users who participated in scams to file phony or exaggerated claims."

The trust fund that was set up by Wyeth to pay the Fen-Phen claims hired a cardiologist to review the medical reports on several hundred of the filed claims. The expert concluded that:

"...70 percent of the tests contained "material misrepresentations," amounting to "pervasive fraud." He found hundreds of echocardiograms that had been manipulated to give a false image of valve damage. Some, he said, had been doctored with inserted frames so patients would appear sicker than they were.

Among the cases he reviewed...he found some people who had been duped into believing they had heart-valve disease. One woman's echocardiogram, he said, was "seriously manipulated" to show severe valvular regurgitation, in which blood leaks backward through an improperly closing valve.

On Aug. 29, 2002, she had valve replacement surgery - a needless operation...that had been "set in motion by a cooked echocardiogram, a misrepresented diagnosis, and a badly frightened patient."

The article continues stating that:

"For Wyeth, the fen-phen saga has been increasingly expensive. So far, about 4,000 claims, ranging from $3,000 to $1.5 million, have been paid from the settlement fund alone. The company estimates that it ultimately will pay out about $21 billion - counting the settlement, plaintiffs who have opted out and taken their cases to trial, and other cases and settlements still pending."

Even some of the plaintiffs lawyers admit that fraudulent claims have likely been filed:

""I think there has been a significant amount of fraud in this claims process," said Center City lawyer Michael Fishbein, who is counsel for class-action plaintiffs and a liaison to claimants' attorneys. He estimates that up to 85 percent of claims may be questionable."

The article goes on to detail specific instances of fraud and alleged fraud:

"Despite the shadow of fraud, the only prosecutions so far have occurred in Mississippi. Eighteen people were charged in connection with submitting phony claims to the settlement trust; 17 pleaded guilty.

In Philadelphia, U.S. District Judge Harvey Bartle 3d, who is presiding over the federal fen-phen litigation and the settlement, has repeatedly expressed alarm about fraud.

In May, he threw out the case of a Texas woman, Cheryl Yvonne Barnett, who contended she took Redux for about four months in 1989, then developed valve disease.

Bartle cited serious problems with her claim: Redux wasn't available until 1996; the pharmacy that she said filled her prescription was a parking lot, and the doctor who she said prescribed the drug did not exist.

The judge ordered her and her lawyer to pay Wyeth $9,654 to compensate the company for its costs in fighting the case. "There can be no doubt," Bartle said, "that an attempt was made to perpetrate a fraud upon Wyeth and the court."

Ms. Barnett, incidentally, happened to be a client of the Houston Law Firm of O'Quinn, Laminack and Pirtle. This is the same firm that was sanctioned by Judge Janis Graham Jack in the Silicosis investigation.

The article concludes by noting that:

"Indeed, fen-phen is not the only mass tort litigation being scrutinized. In New York, federal prosecutors also are looking at asbestosis and silicosis cases. The investigations suggest that big-money class actions and settlements may become a new focus for white-collar prosecutors.

Former Chief U.S. District Judge Louis C. Bechtle, who presided over the fen-phen case until he retired in 2001, said in an interview last week that mass tort cases generally have been tainted by "hyped-up claims."

Settlement funds are at risk for depletion before worthy claimants are compensated, he said, and the courts do not have the resources to "police" the legitimacy of claims.

Bechtle called it a "national calamity" and said the legal system must come up with a way to restore litigants' faith."

Here is a related article on the Mississippi Fen-Phen indictments.