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CHILD ABUSE State body hit for $26M over botched inquiry West Palm Beach, Fla. (AP)-A Florida state jury has ordered the Florida Department of Children & Families to pay $26 million for having botched an investigation that left an abused girl permanently disabled. The adoptive parents of 6-year-old Marissa Amora sued for lifetime medical care. The girl was hospitalized as a toddler four years ago because she couldn’t walk. Tests found a tumor on her spine as well as an unexplained broken collarbone. The Miami Children’s Hospital staff also noticed the girl’s mother spank and berate her. Hospital officials contacted the state, and an abuse investigation was launched while the girl was still in the hospital. She was beaten unconscious less than a month after her discharge. The jury determined the hospital was 20% responsible, her biological mother 5% responsible and the state 75% responsible, in a total $35.1 million verdict. However, state law limits judgments against public agencies to $200,000 unless lawmakers pass a special claims bill for a larger amount. CONSUMER PROTECTION $150M settlement to end Lupron RICO suits Philadelphia-A pair of settlements totaling $150 million won final court approval in federal Racketeer Influenced and Corrupt Organization Act suits brought by consumers and insurance companies over allegedly illegal sales tactics that drove up the price of the prostate cancer drug Lupron. The RICO civil suits stemmed from a criminal case in which TAP Pharmaceutical Products Inc. pleaded guilty to charges that it had encouraged doctors to fraudulently bill the Medicare program for free samples of Lupron as part of a “brand loyalty” scheme. Prosecutors argued that the intent of the scheme was to provide incentives to doctors to prescribe Lupron instead of cheaper, similarly effective drugs, such as Zoladex. According to court papers, at the heart of the scheme was TAP’s encouragement of doctors to bill Medicare for Lupron at an imaginary average wholesale price provided by TAP to the “Red Book,” an industry publication used by Medicare and other third-party payors, to establish payment schedules for reimbursable prescription drugs. - ALM FRAUD Perelman wins $1.4B against Morgan Stanley West Palm Beach, Fla. (AP)-A Florida state jury has ordered Morgan Stanley to pay billionaire financier Ronald O. Perelman more than $1.4 billion in damages, finding clear evidence that the investment firm had acted fraudulently in Perelman’s 1998 sale of his Coleman camping gear company to Sunbeam Corp. [See story, Page 6.] MEDICAID FRAUD Hospital to repay N.Y. $76.5M to settle suit New York (AP)-Staten Island University Hospital will return $76.5 million that prosecutors say it fraudulently billed New York state’s Medicaid program. The frauds were allegedly conducted through part-time clinics that do minor procedures in neighborhoods without sufficient medical care. To take advantage of the higher rates the Department of Health pays for services done in these clinics, the hospital operated many of them far beyond the state-permitted 60 hours a month. NATIVE AMERICAN LAW Feds settle for $12M to repair Fort Apache Phoenix (AP)-The federal government will spend $12 million to fix the deteriorating buildings and landscaping at Old Fort Apache in eastern Arizona. The money comes under a settlement agreement reached as a result of a U.S. Supreme Court ruling two years ago that said that the White Mountain Apache Tribe could sue the Interior Department for failing to take care of buildings at the historic fort since 1960. Congress had made the department a trustee over the outpost. A survey of the property in 1998 estimated the cost of relandscaping the fort at $14 million. The Bureau of Indian Affairs had attempted to transfer responsibility of the buildings to the tribe. But the tribe demanded that the buildings and grounds first be repaired, arguing that the Interior Department had breached its fiduciary duty as a trustee to maintain the historic structures in the tribe’s interest. NEGLIGENCE Methadone overdose of boy yields $10M award Orlando, Fla. (AP)-A Florida state jury has awarded a family $10 million, finding that an Orlando doctor, pharmacy and group home were negligent in the methadone death of a 10-year-old boy. Joey Minotti was born with Down syndrome and autism and was placed in the home because he kept injuring himself. He died in 2002 on a dose of methadone that was 10 times stronger than prescribed. The staff at the home failed to recognize the boy’s reaction to the overdose. REGULATORY ACTION Brokerage firm to return $27M after state probe Chicago (AP)-A brokerage firm that accepted contingent fees from insurance carriers for more than 20 years has agreed to return $27 million to clients in a state probe of an insurance industry practice that has yielded steep settlements from larger such firms. The settlement ends an investigation into whether Itasca, Ill.-based Arthur J. Gallagher & Co. violated the Illinois Consumer Fraud and Deceptive Business Practices Act by failing to tell clients the details of the contingent fee arrangements. Some carriers paid contingent fees to Gallagher when it steered a particular amount of business their way.

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