Claire Schenk talks about her work on record-setting fraud settlement for U.S. Attorney’s Office

The St. Louis Business Journal quoted Thompson Coburn business litigation partner Claire Schenk in a recent article (subscription required) looking back at the historic whistleblower suit brought by St. Louis physician Dr. Steven Bander.

Then an Assistant U.S. Attorney with the Eastern District of Missouri, Schenk secured a $350 million settlement with Nashville, Tenn.-based Gambro Healthcare Inc. to resolve fraud claims, including the dialysis company’s practice of overbilling Medicare and Medicaid. The settlement also resolved alleged violations of the Anti-Kickback Act involving joint venture relationships with physicians premised upon the number and volume of anticipated patient referrals. 

The 2004 settlement was the largest ever reached by the U.S. Attorney’s office in the Eastern District of Missouri, and included civil and criminal fines and a $56 million payout for Bander. As the lead Assistant U.S. Attorney on the case, Schenk managed a team of investigators — including agents from the FBI and the U.S. Department of Health and Human Services — and participated in interviews from New York to San Francisco. She also oversaw the review of an unprecedented amount of electronic and hard copy data, and played a key role in the complex settlement negotiations leading to resolution of the case. 

In her interview with the Business Journal, Schenk recalled her first reaction to hearing Bander’s claims. “My first thought was, ‘We have someone coming forward who has been at the C suite level, a person who’d held a significant position and was in a place where he stood to possess valuable information,’” Schenk said. “Steve was in a position to know … the history of the practices that were under scrutiny and who was told what, where, when and how.”

The March 29 Business Journal article details Bander’s donation of millions from his whistleblower settlement to charities, including an organization focused on ethics education for physicians.

“He’s reinvented himself in a very interesting and meaningful way,” Schenk said. “I’ve been impressed by what’s he’s done in making good use of the funds.”

A 14-year veteran of the U.S. Department of Justice, Schenk now advises health care entities and providers facing litigation or investigation over alleged health care fraud and abuse or charges under the False Claims Act. She represents hospitals, health plans, nursing homes, physicians and physician groups, pharmaceutical companies, and manufacturers and distributors of medical devices.

Schenk is also the court-appointed receiver over the high-profile civil fraud suit filed against St. Louis financier B. Douglas Morriss, who is accused by the Securities and Exchange Commission of using $9.1 million in investor funds for his personal use. The case involves several of Morriss’ investment firms, including Acartha Group, a private equity management company.