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Judge: Justice Must Pay $42M Share

April 9, 1998

PHILADELPHIA (AP) _ A federal judge ordered the government to pay $42.3 million to three men who helped the Justice Department expose Medicare fraud at SmithKline Beecham Clinical Laboratories Inc.

The Justice Department had resisted paying the men the 15 to 25 percent share of SmithKline’s settlement specified for whistle-blowers by the federal False Claims Act.

The department argued that most of the $325 million settlement was obtained through its nationwide ``Labscam″ investigations that had nothing to do with the men, Robert J. Merena, Charles W. Robinson, Jr., and Glenn Grossenbacher.

But U.S. District Judge Donald W. VanArtsdalen ruled Wednesday that they made a major contribution to the government’s case and that they helped bring in nearly all of the settlement.

``I am left with the impression that the attorneys in charge of the Labscam investigation ... seek to take far more credit for the overall success of the proceedings than is rightly due,″ he wrote.

Justice Department spokesman Joe Krovisky said the government was reviewing the decision and declined to comment further.

``The judge clearly saw that we did add value, that our efforts did matter in this case,″ Merena attorney David M. Laigaie said.

Philadelphia-based SmithKline agreed to pay the government $325 million last year in the largest civil settlement ever in a whistle-blower lawsuit. The company settled after the government alleged it paid kickbacks to doctors, billed the government for laboratory tests not performed and committed other violations.

SmithKline has denied the allegations, saying the violations were unintentional and the result of ambiguities in regulations and guidelines.

When interest and payments to state Medicare funds were taken into account, the final settlement came to about $321 million. VanArtsdalen said Merena and the other whistle-blowers accounted for all but about $15 million of that total.

The government previously agreed to pay the whistle-blowers a minimum of $9.7 million but only if they dropped claims to a larger portion.

But the judge’s ruling adds an additional $42.3 million, meaning the men will share about 17 percent of the money the whistle-blowers helped bring in.

Merena, of the Reading, Pa., area, worked as a senior billing-systems analyst at a SmithKline Beecham office in Montgomery County. While still employed there, he passed information to federal investigators working on the case.

Merena left his job at SmithKline in May 1995 and hasn’t had a full-time job since. He has said he’s had trouble finding another position because employers are wary of hiring a known whistle-blower.

Robinson is the former medical director of SmithKline’s San Antonio laboratory and Grossenbacher is an attorney.

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