VIRGINIA

Cuccinelli-IRS dispute over Medicaid fraud settlement

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RICHMOND, Va. (AP) - Attorney General Ken Cuccinelli says the IRS is blocking the release of $125 million owed to Virginia from a Medicaid fraud settlement.

Last year, Abbot Laboratories agreed to pay $1.5 billion to settle allegations that it promoted an anti-seizure drug for uses that were not approved by the federal government. Cuccinelli says Virginia is due $125 million from the 26-state case because it led the investigation, but the IRS for eight months has refused to complete a two-page form that would allow the release of the money. He says he first thought it was incompetence, but now wonders about the agency's motives.

The IRS did not immediately respond to a request for comment.

Cuccinelli says his office planned to use most of the money for local police equipment and training.

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