News & Cases


Defense Contractor 3M Settles Defective Earplug Lawsuit at $9.1 Million, $1.9 Mill to Whistleblower

Defense Contractor 3M Settles Defective Earplug Lawsuit at $9.1 Million, $1.9 Mill to Whistleblower

Earplug manufacturer 3M will pay $9.1 million to resolve allegations that it knowingly sold defective products to the U.S. military. The alleged misconduct was first brought forward in a whistleblower lawsuit initiated by 3M’s competitor Moldex-Metrics in May 2016.

According to the complaint, 3M knew that its Combat Arms Earplugs Version 2 (CAEv2), were not long enough for proper insertion into the ears of users, and it, nevertheless, sold the product to the Defense Logistics Agency.

CAEv2 earplugs have two different positions. They can be used alternatively as traditional earplugs and flipped over for muffling explosion noise, while letting quiet sounds go through them. While 3M’s engineers allegedly knew the earplugs could lose their seal, which would affect performance, the company did not share that information with the government. Tellingly, CAEv2 plugs are now discontinued.

3M earplug malfunction may have caused thousands of U.S. soldiers to suffer tinnitus and related conditions. Thus, the government may not only have endured losses through the purchasing of  defective products, but also through the treatment of ailments related to CAEv2 use....


REPORT: Hospice Schemes & Fails Hurt Taxpayers and Medicare Beneficiaries

REPORT: Hospice Schemes & Fails Hurt Taxpayers and Medicare Beneficiaries

A new report by the Office of the Inspector General outlines the widespread utilization of hospice services covered under Medicare, while also highlighting the sytem’s flaws and some central vulnerabilities.

Because of the solace it can provide for people in the later stages of life, and their families, many Medicare beneficiaries opt for hospice care. In 2016 alone, Medicare paid $16.7 billion for hospice services utilized by 1.4 million individuals participating in the program.

Unfortunately, Medicare’ steep bills for hospice care do not always translate into quality care for its beneficiaries. The OIG found that hospices often left beneficiaries in pain, failed to provide medication, and responded poorly to a variety of health complications.

According to the report, Medicare beneficiaries are often left in the dark about crucial decisions impacting their care. In addition, hospices were found to routinely bill for the most expensive level of care without medical necessity....


SEC Proposes $30 Million Cap on Whistleblower Awards

SEC Proposes $30 Million Cap on Whistleblower Awards

Following the announcement of an $83 million whistleblower award, the SEC is looking to put a cap on tipster payouts. A recent 3-2 vote by the Commission said yes to capping awards at $30 million.

The $83 awarded to three whistleblowers last March ignited the flame of the “awards are getting too large” sentiment that guides tort reform advocates across the nation. When it comes to SEC whistleblowers, they may finally be getting their big day.

The cap is, of course, bad news for the public and good news for dishonest corporations that make billions of dollars a year, for whom having to shell out one or two hundred million is merely a tickle.

Awards are an incentive to whistleblowers, who often lose their jobs and their livelihood in their attempt to expose fraudsters. If putting caps on rewards becomes a habit, it will be bonanza time for fraudsters, but the SEC does not appear to see it that way....


‘Frivolous Lawsuit Conspiracy’ Whistleblowers Wanted, Potential $100,000 Reward

‘Frivolous Lawsuit Conspiracy’ Whistleblowers Wanted, Potential $100,000 Reward

Florida-based attorney John Uustal just announced he is offering up to $100,000 to the first person who comes forward with proof of “a secret conspiracy to create frivolous lawsuits.”

Uustal is a trial lawyer and author, famous for holding massive corporations responsible for their misconduct. The list of corporate titans he has successfully brought to justice includes the likes of Philip Morris, Toyota, and General Motors.

To Cheese or Not to Cheese

Uustal’s initiative was prompted by a recent class action initiative filed in Florida. In what some prominent legal professionals are referring to as “a BS lawsuit,” two McDonald’s customers are accusing the company of illegally charging for cheese.

Suing McDonald’s, “because it charges the same price for a Quarter Pounder with cheese and without cheese,” has made some people wonder whether there might be “a secret plot by big corporations to manufacture dumb lawsuits.”...


Dermatologist Exposes False Claims Act Violations Leading to $850,000 Medicare Fraud Recovery

Dermatologist Exposes False Claims Act Violations Leading to $850,000 Medicare Fraud Recovery

Minnesota-based Skin Care Doctors (SCD) has agreed to pay $850,000 to resolve allegations of false Medicare billings and unnecessary surgical procedures. The alleged misconduct was brought to light in a whistleblower lawsuit filed by a dermatologist who had previously worked under Skin Care's CEO, Michael J. Ebertz.

According to the False Claims Act lawsuit filed by whistleblower Dr. Jeff Samuelson, Dr. Ebertz, who is also a dermatologist, knowingly treated benign lesions as if they were pre-cancerous, routinely billing Medicare for unnecessary procedures.

he complaint also states that Ebertz overbilled Medicare for his patients' visits and encouraged other Skin Care doctors to do the same. Samuelson was co-owner of the company at the time, but he was invited to leave after he spoke out about the alleged misconduct. Dr Samuelson currently practices in California....


FCA Whistleblowers Help Recover $3.4 Billion in FY 2017

FCA Whistleblowers Help Recover $3.4 Billion in FY 2017

Do you have inside knowledge of fraud or false claims against the government? You could be in for a big cash award. America’s whistleblowers earned more than $392 million in fiscal year 2017 for helping the U.S. government reclaim $3.4 billion in stolen or misappropriated funds.
According to the Justice Department’s Civil Division, whistleblowers filed a total of 669 qui tam suits in 2017 – more than 12 cases per week on average. Over the past 31 years, whistleblowers...

$8 Million Each for Two SEC Whistleblowers, SEC Hits $1 Billion Thanks to Tipsters

$8 Million Each for Two SEC Whistleblowers, SEC Hits $1 Billion Thanks to Tipsters

The SEC does the best job of any government agency when it comes to ensuring whistleblower identities remain confidential. The recent awards are not the exception. All we know is that five different individuals submitted information to the SEC exposing misconduct by a company in the securities industry.

After careful consideration, the SEC established that only two of the whistleblowers had provided original information, which made them eligible for an award. 

The two anonymous whistleblowers offered critical evidence that enabled the SEC to bring an enforcement action, including substantial monetary sanctions, against the unidentified wrongdoer. Enforcement actions of this type have now surpassed the $1 billion threshold in terms of financial remedies collected from fraudsters.

According to the SEC order that concluded the recent case, the first whistleblower alerted the agency about the misconduct, while whistleblower No 2 provided additional information that helped SEC staff bring the relevant enforcement action.

Both whistleblowers collaborated closely with the SEC to ensure the wrongdoers could be held accountable....


DOJ Set to Crack Down on Wave of Post-Hurricane Fraud

DOJ Set to Crack Down on Wave of Post-Hurricane Fraud

In the wake of hurricanes Harvey, Irma, Jose, and Maria, the Justice Department is bracing itself for a flood of disaster fraud cases.

In order to coordinate efforts to deal with this type of fraud allegations, the Department of Justice has issued a memo to every US Attorney’s Office, offering specific guidelines to enhance their fraud-fighting efforts.

“Fraud inevitably follows disasters,” criminal justice columnist Tom Jackman said in a recent Washington Post article. Post-disaster scams have multiplied after each natural catastrophe in the US. Katrina has been a notable example. In the aftermath of the hurricane that hit New Orleans in 2005, there were 1,400 federal prosecutions for fraud committed in connection with relief efforts.

In fact, the National Center for Disaster Fraud (NCDF) was created in response to the superabundance of Katrina-related fraud allegations. Only a few days after the last of a wave of hurricanes hit several US states, the Center has already received over 400 complaints....


$2 Million Federal Engineers & Constructors Settlement on Whistleblower Exposed Alleged Scam

$2 Million Federal Engineers & Constructors Settlement on Whistleblower Exposed Alleged Scam

Energy Department subcontractor Federal Engineers & Constructors (FE&C) has just reached a $2 million settlement with the Department of Justice, which resolves a whistleblower’s allegations that it created a shell company to secure a contract for work at the Hanford Nuclear Reservation that should have gone to a small or disadvantaged contractor.  

FE&C worked under Washington Closure Hanford (WCH), which had received a multibillion-dollar nuclear waste cleanup contract at the Hanford Nuclear Reservation. As per the terms of the contract, WCH was required to secure the services of women-owned, small, or disadvantaged businesses to complete a portion of the tasks involved.

According to allegations, FE&C awarded a $2 million contract to Sage Tec, a company run by Laura Shikashio, the wife of the  company’s former vice president....


Final: Judge Triples Damages against Allied Home Mortgage to $268M

Final: Judge Triples Damages against Allied Home Mortgage to $268M

Allied Home Mortgage Capital Corporation has lost a decade-long battle in a verdict that tripled damages from $93 million to $268 million on September 14. United States Attorney for the Southern District of New York, Joon H. Kim, announced an additional judgement of $25 million against Allied Capital President and CEO, Jim Hodge, for False Claims Act and FIRREA violations involving the Federal Housing Administration (FHA) mortgage insurance program.

Branch Manager Peter Belli Claims Allied Falsely Certified FHA-Insurance Loans

Tuesday’s verdict against Allied Capital started in 2011, when former Allied branch manager, Peter Belli, filed a qui tam whistleblower lawsuit against Allied and CEO Jim Hodge claiming the company was certifying high-risk loans as eligible for FHA insurance. Belli’s case was one of just two major post mortgage meltdown cases that went to trial (the other being a Manhattan case against Countrywide)....