Monday, August 09, 2010

New Laws Provide Substantial Rewards to Whistleblowers for Reporting Fraud on Wall Street

The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law last month contains new laws rewarding whistleblowers who report securities and commodities fraud. The rewards can range anywhere from 10% to 30% of any sanctions exceeding $1 million (including penalties, disgorgement and restitution) arising from a judicial or administrative action brought under the securities laws or Commodity Exchange Act. Whistleblowers may file for an award anonymously, provided they are represented by counsel, but the person must reveal their identity to the Commission in order to receive an award. 

The Act requires the Commission to preserve the confidentiality of information provided by whistleblowers and their identity. The Act also allows whistleblowers to bring an action for retaliation by employers for either reporting fraud to the Commission or assisting an investigation conducted by the Commission. The employee may sue for reinstatement, back pay and attorneys’ fees.

Click here to read the full article, “Tip-off law set to spark bounty hunts.”

Friday, July 16, 2010

Advanced BioNutrition Pays $934,000 to Settle Whistleblower Allegations

Advanced BioNutrition Corporation ("BioNutrition"), a Columbia biotech company, and its chief executive officer, David Kyle, paid the U.S. government $934,000 to resolve allegations that its officials submitted inaccurate grant progress reports to government research funds and thereby violated the False Claims Act. 

In 2005, BioNutrition was awarded the first phase of a National Science Foundation Small Business Innovation Research grant to develop probiotic bacteria encapsulating technology.  In 2006 the company was awarded the second phase of funding based on another proposal which detailed results obtained during its first phase of research.  Allegedly, BioNutrition misrepresented and omitted critical information about its initial research results, and made further misrepresentations in final reports about its progress during the second phase of work. 

In addition to the monetary component of the settlement, the company has agreed to a five-year Compliance Integrity Agreement, and Mr. Kyle agreed to be excluded from all federal procurement programs for five years.

The settlement resolves a qui tam lawsuit brought by whistleblower Albert Cunniff, Jr.  Mr. Cunniff will receive $105,275 out of the recovery.

Click here to read the full article, “Columbia biotech pays $934,000 to settle false claims suit"

Benchmark Rehabilitation Reaches Settlement with Tennessee Attorney General

Benchmark Rehabilitation Partners LLC ("Benchmark") reached a $1.8 million settlement agreement with Tennessee Attorney General Robert Cooper to resolve allegations that it improperly billed the Medicare, TennCare and Medicaid programs.

According to the state and federal government, Benchmark submitted claims to Medicaid for therapeutic exercise services from 2001-2006.  However, records show that patients actually underwent aquatic therapy during this time which is restricted by Medicaid reimbursement rules. 

In submitting claims for physical therapy services that were not considered reimbursable under the Medicaid program regulations, the business allegedly violated the federal False Claims Act and the Tennessee Medicaid False Claims Act.  Benchmark, however, denies any wrongdoing. 

Under terms of the settlement, the state will receive $190,977 and the federal government will receive $1,625,489.

Click here to read the full article, “Feds, Cooper Join Forces for Settlement"

Tuesday, July 06, 2010

University of Chicago Hospital Pays $7 Million to Settle Whistleblower Case

The University of Chicago Medical Center has agreed to pay $7 million to resolve allegations that it overcrowded its neonatal intensive care unit ("NICU"), thereby exposing infants to a risk of infection. 

The medical center said that it exceeded capacity in order to help as many infants as possible, that no babies were harmed, and that the practice ended in 2005.  However, Illinois Attorney General Lisa Madigan filed a case in 2006 claiming that the hospital’s practice of “double bunking” put newborns at risk of infection and violated health regulation. 

Of the settlement, $5.1 million will go to neighborhood clinics that provide health services for poor expectant mothers in Chicago’s South Side and $500,000 will go to the Centers for Medicare and Medicaid.

Ms. Madigan’s office was notified about this situation by two former nurses at the medical center.  The whistleblowers will share $1.4 million of the settlement.

Click here to read the full article, “University of Chicago hospital pays $7M to settle suit over NICU crowding"

Wednesday, June 30, 2010

Northrop Grumman to Pay $12.5 Million in False Claims Settlement; Whistleblower Awarded $2.4 Million

Northrop Grumman Corp. agreed to pay the federal government $12.5 million to settle allegations that the company caused false claims to be submitted to the government.

Allegedly, Northrop Grumman’s Navigation Systems Division failed to test electronic components it supplied for military airplane, helicopter and submarine navigation systems to ensure that the parts would function at the extreme temperatures required for military and space uses.

This case was filed under the qui tam provisions of the federal False Claims Act by whistleblower Allen Davis, a former quality assurance manager at Northrop Grumman’s Navigation Systems Division facility in Salt Lake City.  Mr. Davis will receive $2.4 million out of the settlement. 

Click here to read the full article, “Northrop Settles Gov’t Lawsuit for $12.5M"

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