News & Cases


2016: A Stellar Year for Whistleblowers, $4.7 Billion in False Claims Act Recoveries

2016: A Stellar Year for Whistleblowers, $4.7 Billion in False Claims Act Recoveries

America’s courageous whistleblowers filed over 700 qui tam suits in fiscal year 2016 and received $519 million in awards for their valuable tips and assistance in fighting various types of fraud.

Since the 2009 Fraud Enforcement and Recovery Act made groundbreaking improvements to the False Claims Act’s whistleblower provisions, the government has recovered close to $24 billion, paying a sizable $4 billion in whistleblower awards.

As legislation tries to catch up with the rampant reports of fraud across a variety of industries, the federal False Claims Act remains the star when it comes to facilitating the exposure of government-defrauding schemes across America....


JPMorgan: $264 Million Settles FCPA Bribery Charges on 200 China Friends & Family Hires

JPMorgan: $264 Million Settles FCPA Bribery Charges on 200 China Friends & Family Hires

A U.S. government investigation into a JPMorgan hiring program in Asia concluded with a multi-$264 million settlement. The SEC found substantial evidence that J.P. Morgan offered prestigious jobs to the children of Chinese government officials in exchange for the officials' influence to secure lucrative investment-banking assignments - a violation of the Foreign Corrupt Practices Act (FCPA).

In 2006, JPMorgan APAC created a referral program known internally as the “Sons & Daughters Program.” According to the SEC order, the initial goal of the program was to accommodate frequent requests “to hire the relatives and friends of senior executives or officials with its clients, prospective clients, and contacts within foreign government ministries” by offering targeted entry-level and short-term employment opportunities.

Compliance Officer Chris Charnock’s Concerns Dismissed by JPMorgan Management

While the program may have been created in good faith in the beginning, by 2011, JPMorgan employees in Asia were already trying to raise concerns with compliance executives in New York that the bank might be charged with bribery....


Whistleblower Didn’t Live to See Landmark Allied Mortgage Verdict, Taxpayers Recover $92 Million

Whistleblower Didn’t Live to See Landmark Allied Mortgage Verdict, Taxpayers Recover $92 Million

In May, 2011, Peter Belli filed a complaint in Boston. With guidance from whistleblower experts at Mahany Law, he accused Allied Home Mortgage Capital Corporation of massive mortgage fraud in a False Claims Act “qui tam” whistleblower lawsuit.

Over five years later, and after a trial that lasted five weeks, a jury found both the corporation and its CEO, Jim Hodge, guilty of knowingly representing to Housing and Urban Development (HUD) that certain loans were properly prepared and eligible for Federal Housing Administration (FHA) insurance, when in fact they were not.

Belli had managed several Allied branches in Massachusetts, Rhode Island, Arizona, and other states. He was thus in an ideal position to observe Allied Capital’s fraudulent practices, and he was determined to bring the scheme to light. Unfortunately, he passed away before the verdict came out only days ago in Texas. The move to a Texas court had been a choice of the defendants....


Breaking: $100 Million Verdict in Allied Capital False Claims Case

Breaking: $100 Million Verdict in Allied Capital False Claims Case

A Southern District of Texas federal court jury returned today a nearly $100 million verdict against Allied Capital and bank principal Jim Hodge for violating the U.S. False Claims Act and under FIRREA statutes.

The case has special significance as it is one of only 2 False Claims Act cases against a lender related to the mortgage meltdown that went to trial and verdict. The other was the well-chronicled HUSL - Bank of America case. All others were settled in some of the largest settlement amounts in U.S. history.

The False Claims aspects of the case relate to Allied’s “shadow branches”. HUD requires banks, mortgage companies, lenders…to have licensed offices, in effect something at risk themselves in the form of salaries, offices rents and other overhead as a government approved loan originator and therefore a motivator for good business practices....


Hudson Valley Oncology Medicare Fraud Exposed by Whistleblower Medical Coder: $5.31MM Settlement

Hudson Valley Oncology Medicare Fraud Exposed by Whistleblower Medical Coder: $5.31MM Settlement

Hudson Valley Hematology Oncology Associates will pay the government $5.31 million to resolve allegations in a whistleblower lawsuit that it systematically billed Medicare and Medicaid for ineligible and non-existent services.

Between 2010 and 2015, Hudson Valley was allegedly involved in two different fraudulent schemes. On the one hand, it waived Medicare beneficiaries’ copayments and billed Medicare instead. On the other hand, it routinely billed both Medicare and Medicaid for services that were either not performed or not medically necessary. 

Whistleblower Lucille Abrahamsen: Medical Coder Hudson Valley Employee

Hudson Valley’s wrongdoing was first brought to light by Lucille Abrahamsen, a resident of  Highland, New York,  who filed a lawsuit under the False Claims Act in April, 2014. Abrahamsen became aware of her employer’s improper billing practices while working for them as a medical coder....


Lincoln Financial Pays $650K for FINRA Cybersecurity Violations

Lincoln Financial Pays $650K for FINRA Cybersecurity Violations

Lincoln Financial Group subsidiary, Indiana-based Lincoln Financial Securities Corp., has agreed to pay a $650,000 Financial Industry Regulatory Authority (FINRA) fine and tighten up its cybersecurity practices after hackers obtained sensitive information on 5,400 customers, FINRA reported Monday.

Breach Follows Recent FINRA Reprimand

This isn’t the first time Lincoln Financial Securities has been in trouble for less-than-adequate cybersecurity. In February 2011, FINRA fined the company $450,000 for insufficient cybersecurity on its electronic portfolio management system, according to the Law360 report. After the company’s 2011 penalty, it amended cybersecurity policies to offer guidance for representatives of cloud-based data storage. Unfortunately, this was insufficient to prevent another breach....


Life Care Pays $145MM on Medicare – TRICARE Billing Fraud Allegations

Life Care Pays $145MM on Medicare – TRICARE Billing Fraud Allegations

Life Care will pay $145 million to resolve charges that it caused skilled nursing facilities (SNFs) to submit false claims to both Medicare and TRICARE for unnecessary rehabilitation services. The SNF giant, which operates over 200 facilities, was allegedly involved in a scheme to systematically increase its billings to government health programs TRICARE and Medicare. The allegations were first brought to light by two whistleblowers, Tammie Taylor and Glenda Martin, both former Life Care employees. 

Spanning seven years, the alleged misconduct targeted a particular type of Medicare reimbursement, associated with patients who require extensive and frequent therapy. When a patient needs over 720 minutes of two types of skilled therapy per week, including one that is requires five times a week, their treatments qualify for Ultra High reimbursements from Medicare.

Whistleblowers Glenda Martin & Tammie Taylor Said Unnecessary Rehab Services

According to the whistleblower False Claims Act lawsuit filed by Glenda Martin and Tammie Taylor, in order to increase billings, Life Care had internal policies in place to ensure that the largest possible number of patients qualified for the Ultra High category....


SEC Declares War on Employment Agreements that Muzzle Whistleblowers

SEC Declares War on Employment Agreements that Muzzle Whistleblowers

In April, 2015, we reported on the $130,000 fine imposed by the Securities Exchange Commission (SEC) on Houston-based KBR for drafting employee confidentiality agreements which might discourage whistleblowing in cases of corporate malfeasance. This was a clear sign from SEC to all employers in the sector that such internal agreements would not be tolerated.

Since then, the SEC has been working on creating a more propitious terrain for willing whistleblowers to speak up about fraudulent conduct.

On October 24th, 2016, the Office of Compliance Inspections and Examinations at SEC announced that it was scanning numerous employee agreements, looking for language it considers contrary to its disclosure and whistleblowing regulations....


SECs Record-Setting Enforcement Actions Credited to Securities Fraud Whistleblowers

SECs Record-Setting Enforcement Actions Credited to Securities Fraud Whistleblowers

The Securities and Exchange Commission’s (SEC) record-breaking enforcement numbers reported for fiscal year 2016 highlight the importance of securities fraud whistleblowers in combatting misconduct and illegal activity.

The agency played hardball against securities fraud this year, implementing innovative data and analytics techniques to detect suspicious activity and investigate investment advisors, accountants, companies and their C-Suite leaders.

Whistleblowers across the globe aided in uncovering misconduct and contributed heavily to the overall success of the SEC’s fight against fraud....


Tenet Healthcare and Subsidiaries to Pay $513 Million: Expectant Mother Referrals Kickback Scheme

Tenet Healthcare Corporation, alongside two subsidiaries have agreed to pay over $513 million to resolve charges that it was involved in a large-scale kickback scheme to obtain patient referrals. Two of the hospital chain’s Georgia-based subsidiaries, Atlanta Medical Center Inc. and North Fulton Medical Center Inc., have pleaded guilty of violations of the Anti-Kickback Statute (AKS).

The fact that the DOJ was able to negotiate some degree of admission of guilt is excellent news for whistleblowers and for the public as a whole. In a recent conference, government officials had expressed the need to go beyond monetary settlements and to ensure resolutions of healthcare fraud lawsuits included admission of guilt whenever the allegations were substantiated.

Tenet HealthSystem Medical Inc. and its subsidiaries (known collectively as THSM) entered into a non-prosecution agreement (NPA) with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Northern District of Georgia. According to the NPA’s terms, THSM will not be prosecuted provided that it cooperates with the government’s investigation and retains a compliance monitor to prevent future violations of the AKS....