Workers to Split Millions-Whistle Blowers get Part of Settlement

MONDAY, MARCH 26, 2001

TAMPA — Two former hospital administrators who filed a lawsuit accusing a national health-care chain of Medicare fraud will receive part of a $104.5-million settlement.

In December 1997, Gwendolyn Cavanaugh and Virginia Lanford filed a secret lawsuit against Vencor under the False Claims Act in federal court in Tampa. Cavanaugh, 66, and Lanford, 47, began to suspect fraud while working at Central Tampa Hospital.

Last week, Vencor announced it would pay $104.5 million to settle that suit and eight others alleging false claims submitted to Medicare and Medicaid. The two women will receive 15 percent of $54.68 million, the proceeds to settle their lawsuit, according to the Department of Justice. That means they will split $8,203,064.27 with their Fort Lauderdale attorney, Kenneth J. Nolan.

Cavanaugh, a former assistant finance administrator at the hospital, and Lanford, a former quality review manager, started to notice something amiss in the fall of 1997.

Vencor, which had recently bought Central Tampa Hospital, was changing the method for handling charges for respiratory services supplied to its nursing homes. The women thought Vencor was padding its reports to get bigger reimbursement checks from Medicare. When they brought it up to their supervisors, they were told not to be concerned.

Cavanaugh and Lanford resigned from their posts shortly after filing the lawsuit.

The whistleblower in this case is represented by Nolan & Auerbach, a law firm located in Ft. Lauderdale, FL.

Kathleen Hawkins

Dignity Health
$37 million

Kathleen Hawkins, RN MSN, had been employed by Defendant, Catholic Healthcare West (CHW) for approximately 6 years when she decided she had had enough of trying to change the hospital system from within.

CHW, a California not-for-profit corporation that operated hospitals in California, Arizona, and Nevada, was at the time the eighth largest hospital system in the nation and the largest not-for-profit hospital provider in California.


Joe Strom

Johnson & Johnson
$184 Million

Joe Strom contacted us in 2005. We were very grateful that he did. We immediately formed an all-star legal team and a process to stop a very harmful pharmaceutical marketing strategy. It was this process we set into motion that ultimately returned hundreds of millions of dollars to the U.S. Treasury, and a portion of that, very well-deserved, into Joe’s bank account.

Joe told us a very troubling story about the off-label promotion of a pharmaceutical drug for patients who already suffered from chronic heart failure.


Bruce A. Moilan Sr.

$27 Million

Bruce Moilan was a seasoned hospital systems expert by the time he contacted our Firm. At the time he decided to file his qui tam lawsuit, he was employed by South Texas Health System as a System Director for Materials Management. In this position, he oversaw $24 million in annual purchases of supplies and equipment and helped determine budget, reduction and cost analysis throughout the contract bidding and negotiations process. His job was to insure proper implementation for purchasing, receiving and management of inventory, for McAllen Hospitals, L.P.


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