Earlier this week, the United States and State of California declined to intervene in an action alleging that several medical research developers violated the federal and California state false claims acts (FCA) by lying about their ability to develop “microdosing” – a method for the delivery of chemotherapy and related cancer treatments to patients. The relators, Michael DeGregorio and Gregory Wurz, allege that they are affiliated with the University of California at Davis Department of Internal Medicine and that they participated in a research project which gave them access to defendants’ grant application. According to the complaint, the defendants misrepresented the nature and extent of their research, diagnostic ability, and professional sponsorship, to induce the National Institutes of Health, National Center for Research Resources, Department of Energy, National Cancer Institute, Small Business Innovation Research Program, Medicaid, Medicare, Tricare, and the federal student loan program to fund their research. Specifically, the relators allege that the defendants violated the federal and California state FCAs by “knowingly misrepresent[ing] that they were the originators of the microdosing technology and state of art, all for their personal and professional gain, financial and otherwise[.]” The relators claim that the defendants received millions of dollars in grant funds and seek statutory civil penalties for each fraudulent claim for payment, plus three times the amount of damages incurred by the government.
After the United States and State of California declined to intervene, the district court unsealed the action, which is titled United States ex rel. DeGregorio v. Accelerated Medical Diagnostics, LLC, et al., No. 2:12-cv-2931 (KJM) (GGH) (E.D.Cal.). We will report on any future developments in this case, which presents two interesting aspects. First, the whistleblowers are not defendants’ employees or former employees, but third parties who allegedly had access to the defendants’ fraudulent grant submissions. Second, the claims will involve complex scientific analysis.