News & Cases


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....


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....