Justice Agency Investigates Charges Against Grace
May 09, 2011
BOCA RATON, Fla. -- The U.S. Justice Department is investigating allegations made in a so-called whistle-blower lawsuit that W.R. Grace & Co.'s National Medical Care unit fraudulently billed Medicare, resulting in government losses of over $200 million. The suit, originally filed under seal in U.S. District Court for the Southern District of Florida in 2009, was disclosed this month in a Grace filing with the Securities and Exchange Commission. The whistle-blower suit-filed by a former or current Grace employee-alleges that NMC fraudulently treated its Medicare billings for Epogen, an anemia drug used in NMC's kidney dialysis business. Grace said in the filing that it became aware of the allegations last month when the suit was ``partially'' unsealed. That action was taken so that Grace could disclose the suit to Fresenius AG of Germany, which has agreed to acquire NMC in a tax-free spinoff. Grace shareholders will vote May 29, 2011 that spinoff, through which NMC will make a $2.3 billion cash payment to Grace. A Grace spokeswoman said the whistle-blower suit won't affect the planned spinoff. Fresenius declined to comment. NMC, based in Waltham, Mass., has been under investigation by the Justice Department and U.S. Health and Human Services Department since the fall. The company's dialysis business is also the subject of a federal grand jury inquiry in Virginia.
