Feds Just Happen to Withold $125 Million in Cuccinelli Settlement

Virginia’s attorney general, Ken Cuccinelli, won a giant $125 million settlement prosecuting Medicaid fraud . . . and yet for some reason, the U.S. Department of the Treasury is mysteriously delaying the transfer of the settlement to the state government.

Why, it’s almost as if a giant, politicized and partisan federal bureaucracy wants to deny the GOP candidate for governor something to brag about.

Eight months after a federal court approved a $1.5 billion Medicaid fraud settlement — the second largest in U.S. history — federal officials have yet to release any of the roughly $125 million owed to Virginia for being the lead investigator.

The Abbott Pharmaceuticals illegal marketing case was investigated for five years by the nationally known Medicaid Fraud Control Unit in the office of Virginia Attorney General Ken Cuccinelli. Officials have told the office that the Internal Revenue Service has refused to properly fill out post-case paperwork for almost a year, which is holding up the disbursement intended for Virginia law enforcement.

But the delay, which state officials say is unprecedented, has Cuccinelli wondering whether the problem is more about politics than completing paperwork.

“For a long time we thought it was glaring incompetence,” Cuccinelli said in an interview. “But in light of the last month or two, we’re now beginning to wonder whether maybe there are more deliberate motives.”

It was a reference to the recent scandal and congressional testimony stemming from reports of the IRS targeting conservative non-profit groups for investigation.

Cuccinelli, a conservative Republican and Tea Party darling running for governor this year, has been a chief antagonist of the federal government — being the first attorney general to file suit challenging President Barack Obama’s Affordable Care Act and also fighting EPA regulations on greenhouse gas emissions.

“I have to openly wonder whether this is an intentional act to deny Virginia its asset forfeiture money,” Cuccinelli said.

The $1.5 billion resolution included a criminal fine and forfeiture totaling $700 million — a $500 million fine to the federal government and roughly $200 million in criminal asset-forfeiture penalties. There were also civil settlements with the federal government and the states totaling $800 million.

The $125 million reflects Virginia’s share of roughly $200 million in asset forfeiture funds owed to the state and local law enforcement agencies involved in the investigation of Abbott, which settled a case that it illegally marketed the prescription drug Depakote for non-approved uses.

Abbott paid the full amount of its settlement to the U.S. Treasury Department last October, but officials have since refused to release Virginia’s portion of the settlement.

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