2016 False Claims Act Cases

So far in 2016 the U.S. government has recovered $368,650,000 from False Claims Act whistleblower cases. The whistleblowers in these cases have received more than $52,677,000 in rewards.

Whistleblower Reveals Falsely Advertised Cancer Drug
June 6, 2016:  The Pharmaceutical Companies Genetech Inc. and OSI Pharmaceuticals LLC have agreed to pay $67 million to resolve False Claims Act allegations. The two companies provided false information about the effectiveness of the drug Tarceva, used to treat non-small cell lung cancer, and misinformed physicians and other health care providers about the effectiveness of Tarceva, potentially jeopardizing the health of the patients.

This information was brought to light by Brian Shields, a former Genetech employee, who filed the lawsuit against the company under the qui tam, or whistleblower, provisions of the False Claims Act. Thanks to this whistleblower's valiant actions, health care providers now know the truth about Tarceva and it's potentially dangerous consequences. Of the $67 million the two companies will pay, $62.6 million will go to the Federal Government and $4.4 million will go to state Medicaid programs. Brian Shields was rewarded $10 million for risking his career and livelihood and for playing a vital role in helping hold the two pharmaceutical companies accountable for their actions.  
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M&T Bank Faulty Loans Discovered Due to Whistleblower Case
May 13, 2016:  M&T Bank has agreed to pay $64 million to resolve alleged False Claims Act Liability. M&T Bank knowingly originated and underwrote mortgage loans insured by the U.S Department of Housing and Urban Development's Federal Housing Administration that did not meet applicable requirements.

Keisha Kelschenbach, a former M&T employee, originally filed the lawsuit under the qui tam provisions of the False Claims Act. Keisha will be compensated for risking her job and livelihood to divulge these transgressions to the federal government.
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Custom Duty Evasion Revealed by Whistleblower 
April 27, 2016:  Z Gallerie LLC has agreed to pay $15 million to settle a False Claim Act lawsuit involving evasions of customs duties. Z Gallerie LLC engaged in a scheme to evade custom duties on imports, particularly antidumping duties, which protect domestic manufacturers against foreign companies "dumping" products on U.S. markets at prices below cost.

In this case, the illegal activity was courageously reported by Whistleblower Kelly Wells, an e-commerce retailer of furniture, under the qui tam provisions of the False Claims Act. Wells will be compensated $2.4 million for the risk to her job in livelihood that she faced in coming forward.
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Whistleblower Helps Holds Defense Contractors Accountable for Selling Defective Material to the U.S. Army
March 28, 2016:  Kilgore Flares Company and one of its subcontractors, ESM Group Inc., have agreed to pay $8 million to resolve allegations that they violated the False Claims Act by selling or conspiring to sell defective infrared countermeasure flares to the U.S. Army and, in the case of ESM, knowingly evading customs duties owed to the U.S. ESM misrepresented the content of ultrafine magnesium powder in order to avoid paying antidumping duties. 

The actions of the two defense contractors, which put American lives at risk, were revelaved in a whistleblower lawsuit filed by Reade Manufacturing Company, a domestic manufacturer of magnesium powder.  Due to their vital role in the case, Reade Manufacturing Company will be awarded $400,000.

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Whistleblower Unmasks Medical Kickbacks Program Leading to $34.8 Million Fine
March 23, 2016:  Respironics Inc., which sells masks designed for patients with sleep apnea, has agreed to pay $34.8 million to resolve allegations that they violated the False Claims Act by paying kickbacks in the form of free call center services to durable medical equipment (DME) suppliers that bought its masks for patients with sleep apnea. This directly violates the Anti-Kickback Statue, which prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE.

Thankfully Rd. Gibran Ameer, who has worked for several different DME companies, noticed these illegal activities. He bravely decided to stand up against Respironics, recognizing that the payment of illegal remuneration in any form to induce patient referrals threatens public confidence in the health care system. Ameer filed a lawsuit under the qui tam provision, which was successful in exposing the illegal activities of Respironics. Of the $35.8 million fine, $34.14 million will go to the Federal Government and the remaining $660,000 will go to various state governments based on their participation in the Medicaid program. Rd. Gibran Ameer has been awarded $5.38 million for risking his career and livelihood as well as for his vital role in the case.

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Whistleblower Case Reveals Cancer Care Provider Performed and Billed Unnecessary Procedures
March 8, 2016: 21st Century Oncology Inc., the nation's largest physician led integrated cancer care provider, and its wholly owned subsidiary South Florida Radiation Oncologu LLC, have agreed to pay $34.7 million to settle allegations that they violated the False Claims Act by performing and billing procedures that were not medically necessary. The companies knowingly performed a procedure called the Gamma function even when it served no medical purpose and also billed patients for the procedure even when there were no results due to "technical failures."

This information was brought to light by Joseph Ting, a former physicist at South Florida Radiation Oncology, who filed the case under the qui tam provisions of the False Claims Act. Due to his important role in the case and the risks he faced to his career and livelihood, he has been awarded more than $7 million.

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Whistleblower Action Leads to Recall of Military Helmets and $3 million in Taxpayer Recovery
March 7, 2016:   The defense contractor ArmorSource, LLC has agreed to pay $3 million to resolve False Claims Act allegations about the Advanced Combat Helmets they were contracted to make for the U.S. Army. ArmourSource subcontracted its manufacturing to Federal Prison Industries, Inc. and the resulting helmets were manufactured and tested using methods that did not conform to contract requirements and that failed to meet contract performance standards.

The case was brought forth by two whistleblowers, former employees of Federal Prison Industries, who filed the lawsuit under the qui tam provisions of the False Claims Act. In recognitionf ot their vital role in the case as well as the potential loss of their careers and livelihoods, both have been awarded $450,000.

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Florida Home Health Care Company Sham Discovered by Whistleblower 
March 2, 2016:  Mark T Conklin, the former owner, operator and sole shareholder of Recovery Home Care Inc. and Recovery Home Care Services Inc. (collectively RHC) has agreed to pay $1.75 million to settle a lawsuit alleging that he violated the False Claims Act. Conklin spearheaded a scheme that paid dozens of physicians thousands of dollars per month to serve as sham medical directors who supposedly conducted quality reviews of RHC patient chards. The payments violate the Anti-Kickback Statute as well as the Stark Law. These laws are intended to ensure that a physician's medical judgment is not compromised by improper financial incentives.

The lawsuit was originally filed by the whistleblower Gregory Simon, a former RHC employee. Due to his vital role in bringing these violations to light and as acknowledgment of his potential loss of career and livelihood, Gregory Simon will be awarded up to $315,000.
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Whistleblowers Help Save Environment From Radioactive Waste
February 29, 2016:  Lockheed Martin Corporation and some of its subsidiaries have agreed to pay $5 million to settle accusations that they submitted false claims for payment under contracts with the Department of Energy. The company owned a power plant that produced enriched uranium for nuclear fuel for weapons and civilian energy until 2013. However, Lockheed Martin failed to report hazardous waste from the facility's operations. They also failed to properly handle and dispose of the dangerous waste, even though they were responsible for the environmental restoration, waste management, and custodial care of the plant site.

Several former employees of Lockheed Martin who worked at the plant reported these wrongdoings by filing a lawsuit under the qui tam provision of the False Claims Act. The whistleblowers will collectively receive $920,000 due to their invaluable help in the case and the risks they faced in reporting the company.
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Company History of Customs Evasion Uncovered in Whistleblower Case
February 22, 2016:  Three importers and their owners-- Ameri-Source International Inc., Ameri-Source Specialty Products Inc., Ameri-Source Holdings Inc., Ajay Goel and Thomas Diener-- and a related importer, SMC Machining LLC, have agreed to pay $3 million to resolve a lawsuit alleging that the importers engaged in a scheme to evade customs duties on imports of small-diameter graphite electrodes from the People's Republic of China. The four companies knowingly misclassified the size of the graphite in order to avoid paying antidumping duties. 

Information about these wrong doings was brought forth by Graphite Electrodes Sales Inc., which originally filed the case under the qui tam, or whistleblower, provisions of the False Claims Act.  In recognition of the important role that Graphite Electrodes Sales Inc. played in the case, as well as the risks that they took in coming forward as a whistleblower, the company will be rewarded $480,000.
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Whistleblowers Reveal Security Service Company Abused Wartime Contract
February 1, 2016:  Centerra Services International Inc., a security services company formerly known as Wackenhut Services LLC, has agreed to pay $7.4 million to resolve allegations of double billing and inflating labor costs in connection with a contract for firefighting and fire protection services in Iraq. Centerra inflated its labor costs by billing the salaries of certain managers as direct costs under the subcontract, when those salaries had already been charged as indirect costs. The company also artificially inflated its labor rate by counting its costs for holidays, vacation, sick leave, rest and recuperation and other variable labor costs twice in calculating the rate.

The settlement resolves a lawsuit originally filed by whistleblower Gary W. Reno. In recognition of the potential loss of career and livelihood that the Mr. Reno risked in coming forward with this information, he will be awarded $1,332 million.

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Whistleblower Action Reveals Deceit by The Nation's Largest Nursing Home Therapy Provider
January 12, 2016:  RehabdCare and Kindred Health Care Inc. have agreed to pay $125 million to settle a lawsuit alleging that they violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare for rehabilitation therapy services that were not necessary or that never occured. RehabCare's policies and practices resulted in the company providing unreasonable and unnecessary services to Medicare partients and led its SNF customers to submit artificially and improperly inflated bills to Medicare.

The lawsuit was originally filed by two whistleblowers under the qui tam provisions of the False Claims Act. One of the whistleblowers was Janet Halpin, a physical therapist and former rehabilitation manager for RehabCare, and the other was Shawn Fahey, an occupation therapist who worked for Rehab Care. In acknowledgment of their instrumental role in the case, as well as their potential loss of career and livelihood, the two whistleblowers will be awarded nearly $24 million.

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