Recovering Addict-Businessman Helps Government Recover Millions from Omnicare for Nursing Home Kickback Scheme

Recovering Addict-Businessman Helps Government Recover Millions from Omnicare
for Nursing Home Kickback Scheme

BOSTON, Nov. 3 /PRNewswire/ -- Omnicare Inc., the nation's largest pharmacy
for nursing homes, will pay the federal government and several states $98
million to settle Medicare and Medicaid fraud charges -- partially due to a
businessman whose gambling habit nearly destroyed his life.

Adam Resnick, a Chicago-based healthcare entrepreneur, exposed through a "qui
tam" (whistleblower) lawsuit a kickback deal between Omnicare and the owners
of a nursing home chain. As part of today's settlement, Omnicare will pay
$19.8 million to the government to resolve Resnick's qui tam case.

National Senior Care Inc. and prominent New York real estate investor Rubin
Schron - who together purchased the Mariner Health Care Inc. nursing home
chain. - as well as Leonard Grunstein, a New York real estate lawyer who was
Schron's agent in the deal, remain defendants in the case and also are liable
for many millions of dollars in damages.

Resnick will use a substantial amount of his reward money, as provided to
whistleblowers under the False Claims Act, to pay restitution to the U.S.
government for an unrelated matter -- his role in the collapse of a Chicago
bank in 2002 due to his pathological gambling addiction. He served time in
prison.
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"Adam Resnick is continuing to repay his debt to American taxpayers," said
Mary Louise Cohen, a Washington, DC, attorney with Phillips & Cohen LLP, which
represents the whistleblower. "By bringing this wrongdoing to the attention of
federal prosecutors, he has helped the government recover twice the amount the
government lost due to the bank failure."

Resnick's qui tam lawsuit, which the government joined, alleged that Omnicare
paid a $50 million kickback to Mariner Health Care disguised as a purchase of
a small business unit of Mariner.

On the same day that Omnicare paid Mariner $50 million for a business unit
that had only $2 million to $3 million in assets, Mariner signed a 15-year
contract with Omnicare to refer all of its nursing home patients to Omnicare
for the patients' drug purchases, including drug purchases covered by Medicare
and Medicaid.

"This was a sophisticated kickback scheme," said Tim McCormack, another
Phillips & Cohen lawyer in Washington. "The companies tried to mask the
payment through the use of numerous shell companies and complicated ownership
structures."

The government alleges in its complaint that Mr. Schron, with the help of Mr.
Grunstein and other associates, fabricated and backdated documents to hide the
fraudulent nature of the transaction after they learned the government was
investigating their deal with Omnicare.

"In all likelihood, the government never would have uncovered this scheme
without the assistance and persistence of Mr. Resnick," McCormack said.

Resnick quit gambling seven years ago and is using his experience to help
others avoid ruining their lives because of addiction. In his book, Bust: How
I Gambled and Lost a Fortune, Brought Down a Bank - and Lived to Pay For It,
Resnick recounts the double-life he led as a successful businessman devoted to
his family and a compulsive gambler who secretly and obsessively won and lost
millions on blackjack and sports bets.

"I believe this settlement is a testimonial to what I have always stood for
and is proof that addicts can make mistakes but certainly can turn their lives
around," Resnick said. "Kickback deals can hurt Medicare and Medicaid patients
because they influence decisions to provide drugs that could be medically
unnecessary, of poor quality or even harmful."

Resnick said his background was an obstacle to the case at first.

"It was difficult because of my circumstances to convince the government in
the beginning about my knowledge of the health care industry and this fraud in
particular," Resnick said. "I am pleased that the government investigated my
case and did such excellent work."

Attorney McCormack also praised the government's lawyers -- particularly
Assistant U.S. Attorney Gregg Shapiro and Department of Justice Senior Trial
Attorney Laurie Oberembt -- and the talented team of investigators from the
Department of Justice and other agencies for their work on the case.

The government complaint provides the details of the kickback scheme and the
charges against Omnicare, Rubin Schron, Leonard Grunstein and their
associates. It is posted on the Phillips & Cohen website at
http://www.phillipsandcohen.com/CM/NewsSettlements/United%20States%20v%20%20Omnicare%20Mariner%20et%20al%20%20complaint.pdf..

Phillips & Cohen filed the qui tam lawsuit on Resnick's behalf in 2006 in
federal district court in Boston, Massachusetts. The government intervened in
the case last year. Omnicare's settlement resolves Resnick's qui tam lawsuit,
three separate qui tam lawsuits brought by other whistleblowers and government
fraud charges.

The False Claims Act allows private citizens to file qui tam lawsuits against
companies and individuals defrauding the government and recover funds on the
government's behalf. Whistleblowers are entitled to 15 percent to 25 percent
of the amount recovered as a result of their lawsuits. For more information
about qui tam lawsuits and the False Claims Act, see www.phillipsandcohen.com.

About Phillips & Cohen LLP
Phillips & Cohen LLP is the most successful law firm representing
whistleblowers in the nation. Qui tam lawsuits brought by Phillips & Cohen
have resulted in civil and criminal recoveries totaling $5.3 billion. Phillips
& Cohen also represents whistleblowers in cases involving major tax law
violations and securities laws. The firm's attorneys are regularly recognized
for their successful work on whistleblower cases with inclusion on such select
lists as the Top 10 "Winning Attorneys" in the U.S., the "100 Most Influential
Lawyers" and the National Law Journal's"Hot List" of plaintiffs' law firms.

SOURCE Phillips & Cohen LLP

Tim McCormack or Mary Louise Cohen, both of Phillips & Cohen LLP,
+1-202-833-4567