Whistleblower Insider

Whistleblower Insider is written by the Constantine Cannon law firm team of experienced qui tam and whistleblower lawyers. It is updated daily to provide the latest whistleblower and fraud news and developments.

July 22, 2016

In Their Own Words — Richmond

–“Health care executives who exploit patients through medically unnecessary services and conspire to obstruct justice in order to boost their own profits – as alleged in this case – have no place in our health care system.”

Shimon R. Richmond of the U.S. Department of Health and Human Services-Office of Inspector General, commenting on $1B health care fraud charges against owner of over 30 skilled nursing and assisted living facilities.

July 22, 2016

Whistleblower News From The Inside — July 22, 2016

By the C|C Whistleblower Lawyer Team

$1 billion dollar bust in Medicare fraud and money laundering scheme —  Three people are charged with operating a huge Medicare and Medicaid fraud scheme in which the owner of a network of over 30 skilled nursing homes and assisted living facilities and two co-conspirators are charged with admitting beneficiaries who have no medical need for services, paying kickbacks to referring doctors, and billing Medicare and Medicaid of medically unnecessary services.   DOJ

Sentencing in first Bitcoin securities fraud case – Authorities say Texas man Tredon Shavers carried out a “classic Ponzi scheme” after offering potential investors high interest rates to turn over bitcoins, and that he used $220,000 in bitcoins and money from investors to cover his rent, car payments, groceries and other family expenses.  WSJ

House Oversight Committee looks to further whistleblower protection for contractors — Members of the House Oversight and Government Reform Committee, Elijah Cummings (D-Md.) and Chairman Jason Chafetz (R-Utah), unveiled legislation to expand whistleblower protections for subgrantees and personal services contractors.   Federal News Radio

Conviction in case related to e-biofuel biodiesel fraud —  “Wilson’s conviction represents the end of the line for a group of fraudsters in Indiana, New Jersey and Oregon who bent and twisted programs designed to increase America’s energy independence to line their own pockets.”  DOJ

IMF’s Lagarde to face trial in France over corruption case — Christine Lagarde is to face trial for negligence in a botched arbitration that led the French state to make a €400m payout to businessman Bernard Tapie under her watch as France’s finance minister.  Financial Times

Death Fraud?  — A new book details the surprising cottage industry devoted to helping people disappear or fake their own deaths.   Bloomberg

July 21, 2016

Whistleblower News From The Inside — July 21, 2016

By the C|C Whistleblower Lawyer Team

CMS reports $42B saved over 2 years via fraud prevention – CMS announced it saved 42 billion taxpayer dollars—or $12.40 for every dollar invested— through fraud prevention efforts including screenings for providers, predictive analytics, and coordination with external partners. The CMS Blog

Man sentenced to 25 years in prison over fraud scheme – Anton Paul Drago and Joseph Rizzuti collected $2M in investments they claimed would be for the shipment of crude oil from Nigeria to a refinery in the Bahamas; the men instead diverted investors’ money to enrich themselves. KTNV Las Vegas

South Carolina neurology practice settles FCA suit – A Greenville, SC neurology practice charged with mislabeling Botox will pay the United States $300K to settle the allegations. Greenville Online

University of Oregon settles whistleblower Suit with 2 former employees – Two former University of Oregon employees who raised concerns about the privacy of a student’s therapy records following an alleged sexual assault will receive $425K to settle their retaliation claims. The Register-Guard

Anonymity Clause to Be Inserted in Botswana Whistleblowing Bill – Botswana’s Assistant Minister for Presidential Affairs and Public Administration, Dikgang Makgalemele, yielded to suggestions from MPs to insert an anonymity clause in the country’s whistleblowing bill and to increase whistleblower rewards. All Africa Daily News

Opposition party in Indian State Legislature puts on public corruption exhibition – Maharashtra state’s minority party revealed a museum-style exhibit detailing allegations of corruption against several ruling party ministers; exhibition visitors are able to exam documents and receive a 2 kg bag of onions. India Today

July 20, 2016

Whistleblower News From The Inside — July 20, 2016

By the C|C Whistleblower Lawyer Team

Justice Department files to seize $1 billion in assets allegedly stolen from Malaysian investment fund – The government believes the assets, including a $35 million jet, royalty rights to the movie “The Wolf of Wall Street,” and art by Van Gogh and Monet, were purchased with money embezzled from the 1Malaysia Development Berhad fund by Malaysian officials and their associates.  Los Angeles Times

Government sues DynCorp International for False Claims Act violations – The lawsuit alleges that the company defrauded millions from the State Department by submitting inflated claims for payment on a contract it had to train Iraqi police forces.  Corporate Crime Reporter

Internet provider hit with $40 million whistleblower lawsuit – Citynet, a West Virginia internet provider, alleges that Frontier Communications used $40.5 million in federal stimulus funds to build a high-speed broadband network to block competition.  Charleston Gazette-Mail

Registered nurse convicted in $8 million home-healthcare fraud conspiracy – A jury convicted Ann Anyanwu of participating in a scheme to bill Medicare for services that were not provided while falsifying records to make it appear that they had been.  DOJ

HSBC’s global head of foreign exchange trading charged with front running – Mark Johnson was arrested at JFK airport on charges that he conspired with HSBC’s Forex head for Europe, Middle East, and Africa, Stuart Scott, to defraud a client by trading ahead of that client on confidential information they received from the client.  USAO – EDNY

July 20, 2016

Question Of The Week: Is Taser International Too Cozy With Police Departments?

By the C|C Whistleblower Lawyer Team

The privatization of public services and its ramifications has been a recent theme in our weekly questions.  The pressing issue of police violence has once again brought this critical question to the forefront.  A large number of corporate interests have a very serious stake in the matter—manufacturers of guns, police armor, drug tests, and bomb robots all stand to benefit from the tragic killings both of, and by, police officers.  As The Verge put it last week, “In a week of police violence, Wall Street won.”

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July 19, 2016

In Their Own Words — Melia

— “The Olympic brand is under intense scrutiny.  This is a seminal time.”

Paul Melia, Canada’s top anti-doping officer, on the Russian Olympic doping scandal and the controversy surrounding whether Russia should be banned from the Rio Games.  Click here for more.

July 19, 2016

Whistleblower News From The Inside — July 19, 2016

By the C|C Whistleblower Lawyer Team

Russia may face Olympics ban as doping scheme is confirmed — “The world’s leading antidoping officials on Monday called for Russia to be barred from this summer’s Rio Games after a damning report confirmed a Russian whistleblower’s claims of government-ordered cheating at the 2014 Sochi Olympics.”  NYT

EU fines truckmakers record $3.2 billion over 14-year cartel — The European Commission has issued its biggest antitrust fine ever against Daimler, DAF, Iveco and Volvo/Renault.  Volkswagen subsidiary MAN escaped any fine because it was the whistleblower.  Fortune

Bristol-Myers Squibb settles whistleblower suit for $30M — “The lawsuit alleged that Bristol-Myers Squibb violated the California Insurance Frauds Prevention Act by employing and using sales representatives for the purpose of defrauding private commercial health insurers by using kickbacks to procure patients or clients.”  Insurance Journal

Judge rejects Morgan Stanley’s bid to dismiss $20M whistleblower lawsuit — “A federal judge has shot down Morgan Stanley’s attempt to dismiss a case brought by two former employees seeking $20 million in damages who alleged that they were terminated after calling attention to extensive misconduct at the firm.”  On Wall Street

Fiat Chrysler auto sales probed by Justice Department and SEC — The company is under investigation by U.S. authorities “amid allegations that the maker of Dodge and Jeep vehicles inflated sales figures.”  Bloomberg

Rare good news for a military whistleblower — “Both the House and Senate versions of the 2017 National Defense Authorization Act (NDAA) contain key provisions to make sure that this case is not such a rare occurrence.”  The Hill

July 18, 2016

In Their Own Words — Capers

— “Embezzlement of public funds meant to aid individuals with developmental disabilities impacts some of the most vulnerable members of our community. With this indictment, we serve notice that those who engage in such crimes will be vigorously investigated and held to account.”

U.S. Attorney Robert L. Capers of the Eastern District of New York, on the indictment of ex-execs of Human First. Click here for more.

July 18, 2016

Whistleblower News From The Inside — July 18, 2016

By the C|C Whistleblower Lawyer Team

Columbia University pays $9.5 million to settle excessive research cost reimbursement allegations —  Prosecutors said that the university applied for the higher on-campus reimbursement rate even though the research was conducted at off-campus facilities.  423 National Institutes of Health grants, from June 2003 to June 2015, were involved. Modern Healthcare

Liberian ship management company indicted for environmental crimes —  Aegean Shipping Management and Aegeansun Gamma were indicted by a federal grand jury in Charleston, SC, on charges stemming from falsification of records and obstruction designed to cover up overboard discharges of oily mixtures and machinery space bilge water.  Marine Log

Herbalife will pay $200 million and change its business model – The settlement resolves allegations by the Federal Trade Commission that the company, which sells weight-loss products and nutritional supplements, misled its distributors by telling them they could get rich quick. The FTC alleged that the real reward came from recruiting others to join, although the phrase “pyramid scheme” was not used in the settlement.  LA Times

Former execs of social service agency indicted for embezzling from the charity – Money that was supposed to be used to assist the developmentally disabled  community in NY and Long Island was instead used by the Human First execs for cosmetic surgery, family vacations and spa treatments.  DOJ NY AG

USAID says there has been fraud and bribery in Syrian aid response – The USAID inspector general told Congress that the most common frauds involved collusion between companies selling humanitarian supplies and staff of USAID’s local partners who accepted bribes or kickbacks in exchange for help in winning a contract.  But there were also product substitutions, including replacing lentils with salt. Reuters

Was HSBC “too big to jail”? – A Congressional report examines DOJ’s 2012 settlement with the global bank. Why did a potential criminal prosecution for laundering drug money and processing transactions for sanctioned countries end with a $2 billion settlement and a deferred prosecution agreement?  NYT