Taxpayer money is everywhere. And where there is money, there are people willing to cheat to get more than their fair share. Fortunately, there are also upstanding humans interested in calling out wrongdoers gaming the system and stealing tax dollars. Also fortunately, we have whistleblower rewards!
The primary law used to assist those blowing the whistle on bad behavior is the federal False Claims Act. The SEC also has a whistleblower program that has grown significantly over the past decade. The last year has brought a record number of whistleblower claims under the FCA and SEC programs. In 2020, the SEC received almost 7,000 whistleblower tips—a 31% increase from just two years prior, and a more than two-fold increase since the program’s inception. Stemming from whistleblower lawsuits, the SEC has awarded almost $700 million to over 100 individuals since issuing its first award in 2012.
How to be a whistleblower? Whistleblowers may be eligible for an award when they voluntarily provide original, timely, and credible information that leads to a successful enforcement action. Awards in a whistleblower case can range from 10 to 30 percent of the money collected when the sanctions exceed $1 million.
Whistleblower lawsuits vary. In every industry, the U.S. government pays private companies for goods or services. In healthcare, Medicare and Medicaid constitute half of payments to providers of medical services and goods. In the defense industry, hundreds of billions of government dollars are paid to private contractors. Beyond those fields, billions of government dollars go to everything from toilet paper and hand soap, to computers, extension cords and software, and everything in between. The government also supports many industries through subsidies, loans, and guarantees.
Below are details regarding the top awards under the FCA and SEC whistleblower programs over the past year.
- Settlement Date: July 1, 2020
- Defendant: Novartis Pharmaceuticals Corporation
- Allegation: Between 2002 and 2011, violating the Anti-Kickback Statute and False Claims Act by providing doctors with cash payments, luxury travel and meals to induce them to prescribe Novartis cardiovascular and diabetes drugs reimbursed by federal healthcare programs.
- Total Settlement: $642 million
- Whistleblower Award: TBD
- Want more info about this case? https://www.justice.gov/opa/pr/novartis-pays-over-642-million-settle-allegations-improper-payments-patients-and-physicians
- Settlement Date: October 22, 2020
- Defendant: Undisclosed
- Allegation: Information and assistance led to the SEC’s successful enforcement action and successful related actions by other agencies.
- Total Settlement: Undisclosed
- Whistleblower Award: $114 million.
- Want more info about this case? https://www.forbes.com/sites/danielcassady/2020/10/22/whistleblower-awarded-over-114-million-by-sec/?sh=61155e343979
- Settlement Date: June 4, 2020
- Defendant: Undisclosed
- Allegation: Detailed, firsthand observations of misconduct by a company that resulted in a successful enforcement action and the return of significant funds to investors.
- Total Settlement: Undisclosed
- Whistleblower Award: $50 million (at the time, the largest amount ever awarded to one individual under the SEC’s whistleblower program)
- Want more info about this case? https://www.sec.gov/news/press-release/2020-126
- Settlement Date: July 10, 2020
- Defendants: Universal Health Services, Inc. and UHS of Delaware, Inc. (collectively, UHS), and a Georgia-based UHS facility, Turning Point Care Center, LLC
- Allegation: Billing federal healthcare programs for medically unnecessary inpatient behavioral health services, failing to provide adequate or appropriate services, and paying illegal inducements to program beneficiaries.
- Total Settlement: $122 million
- Whistleblower Award: $15.8 million.
- Want more info about this case? https://www.justice.gov/usao-mdfl/pr/universal-health-services-inc-and-related-entities-pay-122-million-settle-false-claims
- Settlement Date: April 30, 2020
- Defendants: e-biofuels, LLP, et al.
- Allegation: Making fraudulent transactions in the renewable energy biofuels industry.
- Total Settlement: $69.6 million
- Whistleblower Award: TBD (between 25-30% of what the government collects)
- Want more info about this case? https://whistleblowersblog.org/2020/05/articles/featured-story/court-issues-69-6-million-judgement-in-qui-tam-false-claims-act-whistleblower-case/
- Settlement Date: September 22, 2020
- Defendants: Contractors Bechtel National Inc., Bechtel Corporation, AECOM Energy & Construction, Inc., and Waste Treatment Completion Company, LLC
- Allegation: Overbilling the Department of Energy for work on the Hanford Waste Treatment Plant on craft labor performed by electricians, millwrights, pipefitters, and other skilled trades workers, including billing for unallowable and unreasonable idle time caused by management failures in scheduling work.
- Total Settlement: $57.75 million
- Whistleblower Award: $13.75 million
- Want more info about this case? https://www.justice.gov/usao-edwa/pr/bechtel-aecom-us-department-energy-doe-contractors-agree-pay-5775-million-resolve-0
- Settlement Date: September 9, 2020
- Defendant: Wheeling Hospital, Inc.
- Allegation: Providing referring physicians with compensation above fair market value, based on the volume or value of their referrals, then submitting to Medicare claims resulting from those improper referrals.
- Total Settlement: $50 million
- Whistleblower Award: $10 million
- Want more info about this case? https://www.justice.gov/opa/pr/west-virginia-hospital-agrees-pay-50-million-settle-allegations-concerning-improper
- Settlement Date: December 18, 2020
- Defendants: Texas Heart Hospital of the Southwest LLP and its affiliate THHBP Management Company LLC
- Allegation: Requiring the physician-owners doctors of the hospital to have 48 patient-contacts a year in order to maintain their ownership interests.
- Total Settlement: $48 million
- Whistleblower Award: $13.92 million
- Want more info about this case? https://www.justice.gov/opa/pr/texas-heart-hospital-and-wholly-owned-subsidiary-thhbp-management-company-llc-pay-48-million
- Settlement Date: April 27, 2020
- Defendant: Genova Diagnostics Inc.
- Allegation: Billing government healthcare programs for medically unnecessary lab tests, and paying unlawful compensation to phlebotomy vendors.
- Total Settlement: $43 million
- Whistleblower Award: $6 million
- Want more info about this case? https://www.justice.gov/opa/pr/testing-laboratory-agrees-pay-43-million-resolve-allegations-medically-unnecessary-tests
- Settlement Date: April 15, 2020
- Defendants: A Florida-based reference laboratory, pain clinic, and two former executives
- Allegation: Automatically ordering urine drug tests for all patients at every visit regardless of need.
- Total Settlement: $41 million
- Whistleblower Award: $7.79 million
- Want more info about this case? https://www.justice.gov/opa/pr/reference-laboratory-pain-clinic-and-two-individuals-agree-pay-41-million-resolve-allegations
- Settlement Date: January 15, 2020
- Defendant: ResMed Corp.
- Allegation: Improperly providing or helping provide free or below cost call center services, patient outreach services, medical equipment and installation, and interest-free loans to suppliers, sleep labs, and other health providers, in exchange for business.
- Total Settlement: $37.5 million
- Whistleblower Award: $6.2 million
- Want more info about this case? https://www.justice.gov/opa/pr/resmed-corp-pay-united-states-375-million-allegedly-causing-false-claims-related-sale
- Settlement Date: January 20, 2020
- Defendant: Boston Heart Diagnostics
- Allegation: Entering into multiple quid pro quo arrangements with doctors that order its tests, recruiting doctors to have them promise that their patients would never have to pay a deductible or co-payment, and offering free dietician counseling services in exchange for the doctors’ ordering (via Medicare) an expensive panel of laboratory tests.
- Total Settlement: $28 million
- Whistleblower Award: $4.3 million
- Want more info about this case? https://www.cpmlegal.com/news-28-Million-Settlement-in-Major-Whistleblower-Suit-Against-Boston-Heart-Diagnostics
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
Justin T. Berger is a Partner at Cotchett, Pitre & McCarthy, LLP, where he handles high-profile cases of corporate fraud, including representing whistleblowers in qui tam actions under the federal and California False Claims Acts ...
Sarvenaz ("Nazy") Fahimi is a partner practicing in several areas of litigation, with a focus on high profile cases of fraud, cases involving the Federal and California False Claims Acts, and representing businesses in commercial ...