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New York False Claims Act Lawyer Update: Whistleblower Rewards Skyrocket

Thumbnail image for Fraud.Whistleblower.Bought.From.IStock.Photo.jpgIn the preceding calendar year, the United States government paid over $5.5 billion dollars to whistleblowers pursuant to the federal False Claims Act. Whistleblowers pay a vital role in our society helping to unmask corruption and fraud and, in certain cases, can receive up to 30 percent of the monies paid by companies or individuals to the government. Not every case forms the basis for a whistleblower claim under a statute or applicable law – call our New York Whistleblower Attorney to learn your options and the strength (or weakness) of your potential claims. Not every case is the same and initial missteps can be fatal to claim. Learn your rights before you take any action. We have counseled employees in the financial and pharmaceutical industries. As you will see from the cases discussed below which describe the alleged conduct and amounts allocated towards whistleblowers – many cases involve the finance and pharmaceutical sectors.

FIRST: Johnson & Johnson — The company agreed to pay over 2 billion dollars to the federal government in a settlement to resolve criminal and civil liability regarding allegations relating to off-label use of certain prescription drugs. Specifically, it was alleged that one of the company’s subsidiaries had promoted three drugs (i.e., Risperdal, Invega and Natrecor) for uses that were not approved as safe by the Food and Drug Administration. This was one of the largest settlements in the health care industry. There were multiple whistleblowers in this case and their total allocation exceeded 167 million dollars. Multiple whistleblowers can be unusual because one of the hallmarks in a case is whether you have original high quality information not already known by the government.

SECOND: JP Morgan Chase — The financial institution agreed to pay over 610 million dollars as part of the settlement with the government for, as per the Department of Justice, its role in approving “thousands of FHA loans and hundreds of VA loans that were not eligible for FHA or VA insurance because they did not meet applicable agency underwriting requirements. [The Company] further admitted that it failed to inform the FHA and the VA when its own internal reviews discovered more than 500 defective loans that never should have been submitted for FHA and VA insurance.” The alleged fraud was widespread. The whistleblower was a former executive in the department that insured government loans and was allocated over 60 million dollars for his complaint and participation.

THIRD: Bank of America — The financial institution agreed to pay 16.65 billion dollars as part of a settlement that, according to the Department of Justice, “related to the packaging, marketing, sale, arrangement, structuring and issuance of RMBS, collateralized debt obligations, and the bank’s practices concerning the underwriting and origination of mortgage loans.” Specifically, it was alleged that the company sold shoddy mortgages and related products. The whistleblower was a former vice-president for one of the company’s subsidiaries (Countrywide Financial) and is set to collect over 57 million dollars. The whistleblower had filed two federal lawsuits concerning the allegations and provided assistance to the federal government in their investigation.

FOURTH: Amedisys Inc. — The company, one of the nation’s largest providers of home health services, agreed to pay 150 million dollars “to resolve allegations that they violated the False Claims Act by submitting false home healthcare billings to the Medicare program.” According to the Department of Justice the settlement resolved “allegations that, between 2008 and 2010, certain Amedisys offices improperly billed Medicare for ineligible patients and services. Amedisys allegedly billed Medicare for nursing and therapy services that were medically unnecessary or provided to patients who were not home bound, and otherwise misrepresented patients’ conditions to increase its Medicare payments. These billing violations were the alleged result of management pressure on nurses and therapists to provide care based on the financial benefits to Amedisys, rather than the needs of patients.” Several former company employees were the whistleblowers and in total they were allocated over 25 million dollars for their roles.

FIFTH: Omnicare Inc. — The nation’s largest provider of pharmacy services to nursing home patients agreed to pay over 120 million dollars regarding allegations of kick-backs – specifically, it was alleged that company was giving improper financial incentives to nursing homes in exchange for their continued business to supply drugs to Medicare and Medicaid patients. A former company employee was the whistleblower in these kick-back allegations and he was allocated over 17 million dollars for his role in coming forward and his participation. This was not the first fraud-related complaint filed against the company. In fact, Omnicare paid over 90 million dollars as part of a settlement to the United States in 2009 in a prior case involving kick backs.

There are many types of claims that may form the blueprint for a whistleblower action – not just the types of ones described above – there are many different applicable statutes – state and federal. Contact our office if you have any knowledge or information about fraud or other wrongdoing and want to learn your rights.


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