News & Cases


Whistleblower Awards in Walgreens Medicaid Fraud Case to Surpass $22 Million

Whistleblower Awards in Walgreens Medicaid Fraud Case to Surpass $22 Million

Retail pharmacy giant Walgreen Co. will pay $60 million to settle claims that it overcharged Medicaid for prescription drugs. The alleged scheme was brought forward in a whistleblower lawsuit filed in 2012. This is the second settlement in that case, which involves alleged fraud against 39 states and the federal government.

The whistleblower, Marc Baker, was once a Walgreens pharmacy manager in Florida. Due to the nature of his work for the company, Baker was in a position to witness how the pharmacy chain knowingly offered illegal kickbacks to lure Medicaid-covered patients and overcharged government programs for prescription drugs. In January 2017, there was a first settlement relating to some of Baker´s allegations. As a result of that agreement, he received a $9.7 million whistleblower award. Now, following the new resolution, he stands to get an additional $12.6 million.  

Upon the announcement of the settlement, a spokesperson for Baker commented, “This unprecedented case exemplifies the importance of whistleblowers in the public-private partnership to prevent government fraud. It illustrates the power of one individual to expose and stop fraud against the government – and, ultimately, U.S. taxpayers who foot the bill.”...


2018: Whistleblowers Help Recover Over $2.04 Billion From FCA Claims, Receiving Over $300 Million in Rewards

2018: Whistleblowers Help Recover Over $2.04 Billion From FCA Claims, Receiving Over $300 Million in Rewards

According to a report released by the DOJ in December 2018, False Claims Acts cases led to $2.88 billion in recoveries during the last fiscal year. A staggering 84 percent of them were initiated by whistleblowers, leading to 73 percent of the total of settlements and judgments, and amounting to $2.044 billion. As a result of these successful lawsuits, FCA whistleblowers received a total of $301 million in awards in 2018.

Nearly 9 out of every 10 cases filed during 2018 were related to healthcare fraud. The top recoveries from fraudsters in the sector included $625 million from AmerisourceBergen Corp., which allegedly, illegally repackaged cancer medication, deriving hundreds of millions in profits. A handful of massive settlements, five to be exact, including the one with AmerisourceBergen amounted to $1.5 billion of the total recoveries.

The largest healthcare fraud recoveries also included a $360 Million settlement with drug maker Actelion over kickbacks, one with Insys over opioid kickbacks, amounting to $150; another one, of $260 million, with hospital chain Health Management Associates over kickbacks and fraudulent billing; and one amounting to $270 million, paid by Medicare Advantage provider HealthCare Partners Holdings, for defrauding the program....


Trump Administration’s Rollback Of Bank Regulations Under Dodd-Frank Moves Forward

Trump Administration’s Rollback Of Bank Regulations Under Dodd-Frank Moves Forward

Regulators have known since the last presidential election that stringent rules for banking institutions are not one of the Trump administration’s priorities.

The Dodd-Frank Act has been protecting consumers from risky behavior by banks since the aftermath of the 2008 crisis. Now, the administration is effectively removing this stringent oversight, with the sole exception of Wall Street’s giants.

Financial institutions that benefit from the rollback include American Express, Capital One, SunTrust, U.S. Bank, and many others. Meanwhile, the likes of Bank of America, JPMorgan, and Citibank will continue to be scrutinized as they have been since the financial collapse.

While the government vows to only burden with complex rules the large global banks that could potentially destabilize the whole financial system, members of the opposition believe the Dodd-Frank rollback is increasing the risk for the American taxpayer....


Abbott and AbbVie Will Pay $25 Million Over Alleged TriCor Kickbacks, Attorney John Uustal Secures $6.5 Million for Whistleblower

Abbott and AbbVie Will Pay $25 Million Over Alleged TriCor Kickbacks, Attorney John Uustal Secures $6.5 Million for Whistleblower

The U.S. Attorney for the Eastern District of Pennsylvania has just announced a $25 million settlement to resolve allegations that Abbott Laboratories and its spinoff AbbVie Inc. unlawfully marketed its drug TriCor to physicians, offering kickbacks and promoting off-label uses. The alleged misconduct resulted in fraudulent claims being submitted to Medicaid and Medicare, amounting to millions of dollars.  

TriCor has been approved by the FDA to treat certain types of cholesterol imbalance. Misconduct involving marketing of the drug was first brought to light in a whistleblower lawsuit filed by the Kelley/Uustal law firm in 2012. The insider information that eventually led attorney John Uustal’s team to secure a settlement, was provided by Amy Bergman, who used to be a sales rep. at Abbott.  

The False Claims Act allows whistleblowers to file a qui tam action on behalf of defrauded U.S. taxpayers. When the information they provide is original and useful for holding fraudster’s accountable, the tipsters receive a reward between 15 and 30 percent of the total recoveries...


Northrop Grumman Systems Corp Will Pay $31.65 Million to Settle Defense Contract Fraud Allegations

Northrop Grumman Systems Corp Will Pay $31.65 Million to Settle Defense Contract Fraud Allegations

Northrop Grumman, a defense contractor, has agreed to pay $27.45 million to settle claims of fraudulent billing.  

An investigation led by the Air Force Office of Special Investigations (“AFOSI”), the Defense Criminal Investigative Service (“DCIS”), and the FBI uncovered an international scheme to defraud the U.S. Air Force. The agencies found out that employees at Northrop Grumman Systems Corporation (“NGSC”) illegally profited by inflating their work hours on bills for two contracts with the armed forces.

According to the DOJ, the company billed the Air Force for working hours claimed by employees assigned to the Middle East who had not actually worked those hours. From January 2011 to October 2013, the NGSC deliberately mischarged the Air Force for 12 to 13.5 hour work days when, in fact, the workers were not working overtime, but engaging in activities such as sports and partying (among themselves and with their families) and enjoying their five-star accommodations.

By overstating the number of hours worked, employees personally profited, defrauding American taxpayers by roughly $5 million....


Amerisource Pays $625 Million to Resolve Pharmaceutical Fraud Claims

Amerisource Pays $625 Million to Resolve Pharmaceutical Fraud Claims

Three whistleblower suits have unveiled a large scam involving unlawful repackaging and reselling of drugs by AmerisourceBergen Corporation. The lawsuits were filed by Michael Mullen, former Amerisource employee, Omni Healthcare Inc., an oncology practice, and pharmacy workers Daniel Sypula and Kelly Hodge. To resolve civil liability, the company settled for $625 million.

According to The Department of Justice, the wholesale medical company had been contaminating drugs, bribing, illegally labeling drugs, and creating sham patients for at least thirteen years, via a company named Medical Initiatives Inc., which shut down in 2014. This is not the first time Amerisource has been taken to court or forced to pay in relation to criminal activity. In 2017, it paid $260 million in a misbranded drugs case.

According to allegations, Medical Initiatives took part in a massive fraudulent scheme between 2001 and 2014. They purchased bottles of several drugs and transferred the drugs into prefilled syringes. Some of the drugs involved were Procrit, Aloxi, Kytril, Anzemet, and Neupogen. All these are used by cancer patients undergoing chemotherapy treatment. By selling those prefilled syringes, the company unlawfully produced more doses than it purchased, profiting to the tune of around $100 million. ...


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....


8 Physicians Identified in Beaumont Hospital $84.5M Illegal Kickback FCA Settlement

8 Physicians Identified in Beaumont Hospital $84.5M Illegal Kickback FCA Settlement

Detroit’s William Beaumont Hospital system has agreed to pay $84.5 million to resolve allegations that eight physicians accepted illegal kickbacks for patient referrals in violation of the False Claims Act (“FCA”), the Department of Justice announced Thursday.

Whistleblower Dr. David Felten is set to receive a soon-to-be-determined cash whistleblower award for filing the initial qui tam lawsuit that led to the government’s recovery.

Felten Claims Beaumont Trades Cash and Office Rent for Patient Referrals

After joining Beaumont in 2005 as Vice President of Research, the globally recognized neuroscientist Dr. David Felten, (then 57) noticed several arrangements between Beaumont and its physicians that appeared to violate of the Anti-Kickback Statute and Stark Law....


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....