News & Cases


New Bill Promises Large Cash Awards for Anti-Money Laundering Whistleblowers  

New Bill Promises Large Cash Awards for Anti-Money Laundering Whistleblowers  

A new defense bill proposes the creation of a whistleblower program to encourage reporting of anti-money laundering violations. The proposed regulations, which are part of the National Defense Authorization Act, have garnered legislators’ approval and could be signed into law before Donald Trump leaves the White House.

The new legislation would offer anti-money laundering (AML) whistleblowers a similar level of protection as the SEC's whistleblower program. Informants would be able to report violations anonymously and would enjoy anti-retaliation protections. Without this legal shield, people with information about money laundering activities are very reluctant to come forward. Many of them fear their employers might fire them in retaliation. And once out of a job, they often find themselves labeled as 'problematic' and unable to find work in the same industry.

Since its inception, the SEC whistleblower program has paid more than $720 million to securities industry insiders who came forward with tips leading to enforcement actions. Since the SEC and CFTC whistleblower programs have limited jurisdiction over AML violations, their success has not served to deter money launderers....


Kaiser Foundation Health Plan Will Pay $6.3 Million to Settle Medicare Advantage Fraud Allegations, Whistleblower Will Receive $1.5 Million

Kaiser Foundation Health Plan Will Pay $6.3 Million to Settle Medicare Advantage Fraud Allegations, Whistleblower Will Receive $1.5 Million

Kaiser Foundation Health Plan’s Washington subsidiary (formerly Group Health Cooperative) has agreed to pay $6,375,000 to resolve allegations that it claimed patients were sicker than they were and billed a government health program for nonexistent conditions.

Based in Seattle, Group Health Cooperative (GHC) was founded in 1947 and has been often characterized as a respected nonprofit health insurance plan. Kaiser Permanente acquired the company in 2015.

GHC allegedly defrauded Medicare Advantage (MA) in an attempt to reverse financial losses endured between 2008 and 2010 due to “poor business decisions by company management.”...


Bechtel and AECOM Will Pay $58 Million Over Improper Billings for Work Performed at Aging Nuclear Plant, Whistleblowers Share $13.7 Million Award

Bechtel Corp. and AECOM Energy & Construction Inc. have agreed to pay $58 million to resolve allegations that they billed the government for work that was never performed under a nuclear weapons plant cleanup contract.

Bechtel and AECOM were hired by the federal government to provide cleanup services at Hanford Nuclear Reservation in Washington. Dating back to the times of the Manhattan Project, Hanford is the most polluted nuclear site in the country.

The contractors spent several years trying to build a nuclear waste treatment plant. The construction project was no easy task, considering Hanford was once the top plutonium-producing plant in America. But it would seem that corporate greed got in the way of the plant's completion. Prosecutors found evidence that, over the years, the defendants billed the federal government for thousands of hours of work that was never performed.

According to Assistant U.S. Attorney Joseph Harrington, “It is stunning that, for nearly a decade, Bechtel and AECOM chose to line their corporate pockets by diverting important taxpayer funds from this critically essential effort.”...


SEC Rule Amendments Impact Whistleblower Award Determinations

SEC Rule Amendments Impact Whistleblower Award Determinations

Implemented in 2011, the SEC's whistleblower program has received more than 22,000 tips, secured over $2.5 billion in penalties and restitution, and awarded over $523 million to successful tipsters.

The Commission has just approved a set of amendments to the whistleblower program. Commissioners voted on a collection of proposals dating back to 2018. One of the proposed rules would give the agency the discretion to award the statutory maximum of 30% whenever the final amount would not surpass $2 million. This concept garnered support from the Commission, but the threshold has been adjusted to $5 million.

Another proposed rule would have granted the SEC discretion to reduce awards whenever monetary sanctions surpassed $100 million, but the commissioners voted against it.

After the SEC opened up the proposals for public comments, it received about 150 letters. Many respondents viewed the award reduction rule as a move to impose a cap on whistleblower bounties. A letter by Senators Sherrod Brown, Jack Reed, Elisabeth Warren, Patrick Leahy, Chris Van Hollen, and Cristopher Coons warned that "Regrettably, the Proposal could deter whistleblowers."...


Multinational Manufacturer Must Pay $22 Million to Settle False Claims Act Allegations Related to Customs Fraud

In September, the U.S. Department of Justice announced that a German multinational corporation, Linde GmbH, and its U.S. subsidiary Linde Engineering North America LLC (LENA), had agreed to pay more than $22.2 million to resolve allegations the company had evaded import tariffs by knowingly making false statements on customs declarations.

A whistleblower, identified only as Ms. Johnson, had come forward with information about the scheme and had filed a qui tam lawsuit in the U.S. Court for the Eastern District of Pennsylvania. For her information and subsequent assistance in the DOJ investigation, Ms. Johnson will receive about $3.7 million.

A calculated scheme to evade customs duties

Linde GmbH is a multinational corporation headquartered in Germany and a self-described leader in global industrial gases and engineering. Its 2019 revenues topped $28 billion. Linde claims a mission to “make our world more productive every day.” Among its many operations, Linde imports materials into the United States for use in the construction of natural gas and chemical manufacturing plants. ...


WV Hospital Hit with $50 Million Settlement for Stark Law Violations

On September 9, the U.S. Department of Justice announced that Wheeling Hospital in West Virginia had agreed to pay $50 million to settle allegations of an unlawful physician kickback scheme that took advantage of vulnerable patients. A former executive, fired for raising concerns that the scheme violated the Physician Self-Referral (Stark) Law and the Anti-Kickback Statute, filed a qui tam lawsuit under the False Claims Act and will receive a $10 million reward.

Fired whistleblower confronts former employers

During the dates in question, 2007 to 2020, Wheeling Hospital was under the direction and control of R&V Associates, Ltd., headed by Ronald Violi. At this time, Wheeling had a policy of paying compensation to physicians that were “above fair market value” and/or “based on the volume or value of the physicians’ referrals.”

When Louis Longo, who was an Executive Vice President at the hospital, voiced opposition to the plan, Mr. Violi fired him. Mr. Longo then filed a qui tam lawsuit under the federal False Claims Act, suing on behalf of the U.S. government. The Department of Justice intervened in the case and its investigation led to the settlement....


Scripps Research Institute Forced to Pay $10 Million For Misusing Funds from NIH Research Grants

On September 11, The U.S. Department of Justice announced an agreement for The Scripps Research Institute to pay $10 million to resolved allegations that it misused funds the National Institutes for Health had provided for medical research.

Instead of devoting their time entirely to the studies their grants were funding, researchers spent time “developing, preparing, and writing new grant applications, teaching, and engaging in other administrative activities.” A former tenured professor at TSRI, Dr. Thomas Burris acted as a whistleblower in the case and will receive a $1.75 million reward.

A high-pressure environment focused on generating revenue

The Scripps Research Institute is a non-profit biomedical research center with campuses in Jupiter, Florida and La Jolla, California. The highly regarded institute receives millions of dollars in grants from NIH every year. However, the activity within its walls was not consistent with its public image....


Industries for the Blind Will Pay $1.9 Million to Resolve Allegations that It Misrepresented Products as Blind-Made

Wisconsin-headquartered Industries for the Blind has agreed to pay $1.9 million to settle claims that they defrauded the U.S. by passing off China-made products as manufactured by the blind to secure lucrative government contracts.

The federal government hired Industries for the Blind, Inc. (IBI) to manufacture a wide array of products to incentivize the creation of jobs for disabled Americans. But instead of creating those much needed opportunities, the company allegedly bought the goods from China and employed sighted workers, pocketing hundreds of millions of dollars in the process.

With an unemployment rate of approximately 60 percent, one thing blind Americans don’t need is to have employment opportunities taken away, and yet, that is exactly what IBI did, a company insider claims....


Teva Pharmaceuticals Faces FCA Lawsuit Over Illegal Kickbacks, Company Stocks Drop by 10%

Teva Pharmaceuticals Faces FCA Lawsuit Over Illegal Kickbacks, Company Stocks Drop by 10%

The federal government has filed a False Claims Act lawsuit against Teva and one of its subsidiaries. According to the complaint, the company violated the Anti-Kickback Statute in its marketing of its drug Copaxone. Prosecutors claim Teva illegally paid Medicare co-pays through corrupt foundations in order to boost sales of the multiple sclerosis medication.

No sooner had the lawsuit been announced than the value of Teva's shares dropped by about 10 percent, a clear indication that the company may be liable for millions of dollars in damages. This is a big blow for Teva, which has seen Copaxone sales dwindle over the last few years. Once a $4.2 billion-per-year earner, the drug brought in a meager $628 million (combining U.S. and European sales) between January and June of 2020.

Funneling Kickbacks Through Co-Pay Assistance Foundations

The DOJ alleges that between 2007 and 2015, Teva's purported donations to The Assistance Fund and Chronic Disease Fund were, in fact, illegal kickbacks because they were made knowing the foundations would use the money to assist patients with Copaxone co-pays, ultimately benefitting Teva. Meanwhile, the company increased the price of the drug by nearly 330%. By 2015, an annual supply cost a staggering $73,000....


Three Whistleblowers Share $3 Million Award After Exposing Medicare Fraud at Longwood’s Skilled Nursing Facilities in California

Three Whistleblowers Share $3 Million Award After Exposing Medicare Fraud at Longwood’s Skilled Nursing Facilities in California

California-headquartered Longwood Management Corporation and a large number of its affiliates have agreed to pay $16.7 million to settle Medicare fraud claims. Longwood’s alleged violations were brought to light by three whistleblowers, Judy Boyce, Benjamin Monsod, and Keith Pennetti, who will now share a $3 million award.

Longwood operates numerous skilled nursing facilities (SNFs) across California. According to two separate whistleblower lawsuits, over a period of nearly eight years, Boyce, Monsod, and Pennetti observed how the company pressured rehabilitation therapy specialists to bill the therapies they administered at the highest level of Medicare reimbursement.

Whistleblowers Expose Medicare Fraud

Between January of 2010 and April of 2012, Benjamin Monsod was a nurse assessment coordinator at Longwood’s Montrose Healthcare Center. In this position, also known as MDS coordinator, he was charged with designing care plans for residents; a task that likely allowed him to detect fraudulent billings based on inappropriate care plans and unnecessary rehabilitation therapy sessions....