Judge rules against whistleblowers in Liberty case

Wednesday, February 12, 2014

WILMINGTON, Del. – A bankruptcy judge has disallowed several whistleblower claims in Liberty Medical Supply’s Chapter 11 bankruptcy case.

Former employees Deborah Loveland and Lucas Matheny had alleged that Liberty received millions in overpayments from Medicare and Medicaid, which it never repaid, and covered up it all up by tampering with data, according to Law360.

U.S. Bankruptcy Judge Peter Walsh ruled that Loveland and Matheny provided no proof of a false record or statement, no proof that Liberty had any knowledge of false records and no proof that Liberty had circumvented monetary obligations to the government.

Despite receiving more than 4 million documents, database information and witness depositions, “their claims remain unsubstantiated,” wrote the judge.

Liberty, which filed for Chapter 11 bankruptcy protection in February 2013, had asked the court in October to render a summary judgment on the whistleblower claims, which were filed in Florida in 2008.