Taxpayer money is seemingly everywhere. Sadly, where money goes, bad actors often follow, trying to game the system to pursue unjust profits at the expense of law-abiding citizens. Luckily, there are also people committed to doing the right thing. Whistleblower rewards are available as a tool against those who systematically try to make away with tax dollars.
Over the past two decades, California has recovered over $2 billion under California’s False Claims Act (“CFCA”). Enacted in 1987, it is one of the nation’s oldest qui tam statutes. The CFCA empowers private citizens (called “relators”) to sue people or businesses who knowingly submit false claims to a governmental entity. Violators are liable for treble damages and civil penalties.
The CFCA rewards successful relators with up to 50% of a recovery. The “relator’s share” typically depends on whether the relator or the State prosecutes the case. Similar to the federal False Claims Act (“FCA”), CFCA differs from its federal counterpart by making it illegal to fail to report an inadvertent benefit after discovering it. Therefore, if a party inadvertently submits a false claim and fails to report the mistake to the government once discovered, that party can be potentially liable, and lead to similar penalties as knowingly committing the original act.
How to be a whistleblower? For blowing the whistle on bad behavior via the federal False Claims Act or the California False Claims Act, whistleblowers may be eligible for an award when they voluntarily provide original, timely, and credible information that leads to a successful enforcement action. Qualifying whistleblowers can recover anywhere from 10 to 50 percent (under California law) of a successful recovery.
Below are details regarding the top awards (under either the FCA, CFCA, or both) in California of all time.
$900 MILLION SETTLEMENT
- Settlement Date: June 29, 2006
- Defendant: Tenet Healthcare
- Allegation: Billing violations including manipulation of outlier payments to Medicare, as well as kickbacks, upcoding, and bill padding.
- Total Settlement: $900 million
- Whistleblower Award: Undisclosed (potentially up to $225 million)
- Want more info about this case? https://www.justice.gov/archive/opa/pr/2006/June/06_civ_406.html
$325 MILLION SETTLEMENT
- Settlement Date: February 24, 1997
- Defendant: SmithKline Beecham Clinical Laboratories (d/b/a GlaxoSmith Kline)
- Allegation: Filing of false claims relating to laboratory tests paid for in whole or in part by the federal government.
- Total Settlement: $325 million
- Whistleblower Award: Undisclosed (potentially up to $81.25 million)
- Want more info about this case? https://www.justice.gov/archive/opa/pr/1997/February97/082ag.htm
$241 MILLION SETTLEMENT
- Settlement Date: May 19, 2011
- Defendant: Quest Diagnostics
- Allegation: Overcharging the state's Medi-Cal program for more than 15 years and giving illegal kickbacks to doctors, hospitals and clinics.
- Total Settlement: $241 million
- Whistleblower Award: $70 million
- Want more info about this case? https://www.cpmlegal.com/news-13; https://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-announces-241-million-settlement-quest
$187.5 MILLION SETTLEMENT
- Settlement Date: November 1998
- Defendant: Bank of America Corporation
- Allegation: Illegally keeping unclaimed bond proceeds from the State of California and more than 1,000 cities, counties and public agencies statewide.
- Total Settlement: $187 million
- Whistleblower Award: $22 million
- Want more info about this case? https://www.nytimes.com/1999/05/17/business/bank-of-america-settles-charges-on-bonds.html
$182 MILLION SETTLEMENT
- Settlement Date: November 21, 1996
- Defendant: Laboratory Corporation of America
- Allegation: Charging medically unnecessary lab tests to federal and state healthcare programs.
- Total Settlement: $182 million
- Whistleblower Award: Undisclosed
- Want more info about this case? https://www.upi.com/Archives/1996/11/21/LabCorp-to-pay-182-million/8229848552400/
$102 MILLION SETTLEMENT
- Settlement Date: January 11, 2018
- Defendant: BP Energy Company (formerly British Petroleum)
- Allegation: Providing false and misleading information to conceal overpricing while Intentionally overcharging California cities, counties, universities, and government agencies on purchases of natural gas over the course of a decade.
- Total Settlement: $102 million
- Whistleblower Award: Undisclosed (potentially up to $51 million)
- Want more info about this case? https://www.cpmlegal.com/news-102-Million-Settlement-on-Eve-of-Trial-in-Whistleblower-Case-Against-BP; https://oag.ca.gov/news/press-releases/attorney-general-becerra-bp-energy-company-pays-102-million-settlement
$75.5 MILLION SETTLEMENT
- Settlement Date: June 30, 2015
- Defendant: VMware Inc. and Carahsoft Technology Corporation
- Allegation: Misrepresenting their commercial pricing practices and overcharging the government on VMware software products and related services.
- Total Settlement: $75.5 million
- Whistleblower Award: Undisclosed
- Want more info about this case? https://www.cpmlegal.com/news-VMware-and-Carahsoft-to-Pay-75_5-Million-to-Settle-False-Claims-Charge; https://www.justice.gov/opa/pr/vmware-and-carahsoft-agree-pay-755-million-settle-claims-they-concealed-commercial-pricing
$68.5 MILLION SETTLEMENT
- Settlement Date: February 11, 2015
- Defendant: Office Depot
- Allegation: Office Depot employee David Sherwin filed a whistleblower lawsuit under California’s False Claims Act alleging Office Depot fraudulently overcharged California schools. David Sherwin said the company had guaranteed schools lowest prices when buying through a Government Purchasing Alliance but some schools got extra discounts comprising government procurement fraud
- Total Settlement: $68.5 million
- Whistleblower Award: $23 million
- Want more info about this case https://www.bizjournals.com/southflorida/news/2015/01/14/office-depot-to-pay-68-5-million-settlement-to.html; https://www.whistleblowergov.org/recent-whistleblowers.php
$67.5 MILLION SETTLEMENT
- Settlement Date: December 15, 2009
- Defendant: University of Phoenix
- Allegation: accepted federal student financial aid while in violation of statutory and regulatory provisions prohibiting post-secondary schools from paying admissions counselors certain forms of incentive-based compensation tied to the number of students recruited.
- Total Settlement: $67.5 million
- Whistleblower Award: $19 million
- Want more info about this case? https://www.justice.gov/opa/pr/university-phoenix-settles-false-claims-act-lawsuit-675-million
$49.5 MILLION SETTLEMENT
- Settlement Date: August 30, 2011
- Defendant: Laboratory Corporation of America
- Allegation: Overcharging Medicaid and giving kickbacks in exchange for referrals for its lab tests.
- Total Settlement: $49.5 million
- Whistleblower Award: Undisclosed
- Want more info about this case? https://www.cpmlegal.com/news-13; https://www.bizjournals.com/sacramento/news/2011/08/30/california-settles-lawsuit-labcorp.html
$37.5 MILLION SETTLEMENT
- Settlement Date: July 19, 2021
- Defendant: Prime Healthcare Services (and two doctors)
- Allegation: A kickback scheme for patient referrals.
- Total Settlement: $37.5 million
- Whistleblower Award: $9,929,656
- Want more info about this case? https://www.cpmlegal.com/news-Prime-Healthcare-its-founder-and-doctor-pay-to-settle-whistleblower-case-alleging-kickbacks; https://www.justice.gov/opa/pr/prime-healthcare-services-and-two-doctors-agree-pay-375-million-settle-allegations-kickbacks
$25 MILLION SETTLEMENT
- Settlement Date: January 31, 1997
- Defendant: Ischemia Research and Education Foundation
- Allegation: Misusing the University of California's name, staff and resources to perform multimillion-dollar drug-testing contracts with drug companies.
- Total Settlement: $25 million
- Whistleblower Award: $6 million
- Want more info about this case? https://www.sfgate.com/news/article/UC-to-get-millions-as-suit-is-settled-3138005.php
Need a whistleblower attorney? Cotchett Pitre and McCarthy is one of the nation’s most successful and well-respected whistleblower law firms, representing individuals retaliated against by employers for raising concerns, and individuals reporting corporate fraud resulting in the waste of taxpayer money. For general information about CPM’s Whistleblower practice, see this link: https://www.cpmlegal.com/practices-Whistleblower-Qui-Tam-False-Claims-California
Want to learn more? To learn more about the terminology of whistleblower law, including definitions of terms like whistleblower, “qui tam,” “relator” (very different from “realtor”), and the specifics of the timing and scope of governmental investigations, check out this link: https://www.cpmlegal.com/practices-Whistleblower-Qui-Tam-False-Claims-California#FAQs
PartnerSarvenaz (Nazy) Fahimi is a partner practicing in several areas of litigation, with a focus on high profile cases of fraud, cases involving qui tam Relators in False Claims Act cases in federal and state courts, and cases ...