Over the last week, there have been several key developments in the never-ending “Deflategate” saga that indicate the battle between the NFL and Tom Brady is far from over. On April 25, a federal appeals court ruled in favor of the NFL, reinstating the star quarterback’s four-game suspension. It appears that Brady is gearing up for additional legal maneuvers as reports indicate that his legal team has added famed appellate attorney Theodore “Ted” Olson.
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.
— “I will never use talc again. It’s definitely concerning to me.”
Teri Brickey, foreperson of the 9-3 jury requiring Johnson & Johnson to pay a cancer survivor $55 million. Click here to read a Bloomberg article providing additional background.
Jury makes Johnson & Johnson pay $55 million for baby powder – A St. Louis jury made the award after finding that the company’s talc products caused ovarian cancer; months ago a different jury awarded $72 million for a woman who died of ovarian cancer, and there are over a thousand similar cases pending. Washington Post
Former New York Assembly Speaker hit with 12 years – Sheldon Silver was handed the prison term for taking $4 million in bribes and kickbacks and another $1 million from money laundering. New York Times
Government joins whistleblower case against Narco Freedom – The DOJ joined a False Claims Act lawsuit alleging that the operator of outpatient drug rehab clinics, as well as former executives and business associates, engaged in a kickback scheme to defraud Medicaid of tens of millions of dollars. USAO – SDNY
New York City agrees to pay $4.3 million over fraud allegations – The payment settles charges that the city’s fire department received improper Medicare reimbursements for ambulatory services in violation of the False Claims Act. Reuters
Air transporters settle False Claims Act case for $13 million – Menlo Worldwide Government Services and Estes Forwarding Worldwide agreed to the payment to resolve whistleblower allegations that they charged the government for air shipments that were actually transported on the ground. Sacramento Bee
— “There has been as much of a revolution in enforcing disability rights since 2009 as there has been for any other group in the county.”
Talley Wells, a disability lawyer with the Atlanta Legal Aid Society, on the Justice Department’s “scathing rebuke” of South Dakota for what it claims is the state’s improper placement of thousands of patients in “sterile, highly restrictive group homes.” Click here for more.
Government charges South Dakota of wrongly putting thousands in nursing homes — “In a scathing rebuke of the state’s health care system, the Justice Department said  thousands of patients were being held unnecessarily in sterile, highly restrictive group homes.” NYT
When farm to table is really fraud to table — “As more consumers become interested in locally sourced foods and sustainable farming, restaurants are racing to oblige. . . . Unfortunately, some of th[eir] claims are misleading or outright fabrications. CBS
US Chamber works behind the scenes to gut whistleblower protections — “Ensuring that contractors don’t defraud the government is clearly in the public interest. Yet . . . the Chamber has been . . . advocate[ing] policy changes that would reduce financial penalties on many companies and make it harder for whistleblowers to report alleged misconduct.” Truth Out
Lawsuit against New York group home claiming abusive treatment — The three families that filed the action claim staff “punched, kicked and spit on disabled residents and that state authorities knew about the abuse and did nothing for weeks.” ABC
Berlin Brandenburg airport corruption whistleblower poisoned — “German prosecutors are investigating allegations of grievous bodily harm, amid reports that an engineer working on Berlin’s troubled new airport was poisoned. German media say the man was a whistleblower in a corruption scandal involving an airport construction firm.” BBC
Whistleblower speaks out about food stamp fraud — “Angela Dominguez works for the [New Mexico] Human Services Department as a case processor for food stamps, and she and other case workers from all across the state say they were ordered to find ways to make emergency food stamp cases into non-emergencies.” KOB4
— “We will continue to hold executives accountable when their companies provide misleading information and fail to give investors a full and honest picture of what’s happening with their products.”
Andrew Ceresney, Director, SEC Division of Enforcement. SEC
New Orleans Jury Convicts Company Owner for Directing $3 Million Fraud and Kickback Scheme — Evidence introduced at trial showed that defendant’s company billed Medicare for durable medical equipment and orthotics that were not needed and/or were not provided; paid patient recruiters for the names and Medicare numbers of Medicare recipients and then used these Medicare numbers to bill Medicare, claiming that it had provided them power wheelchairs, accessories and orthotics, when the vast majority of these patients did not need and often did not receive, or even want, the equipment; and engaged in “upcoding,” billing Medicare for more expensive equipment than was actually provided. DOJ
Pennsylvania Man Charged In Alleged $35 Million Fraud Against Veterans’ Education GI Bill – The defendant’s scheme allegedly targeted veterans through his company, ED4MIL LLC, and enrolled them in unapproved online courses without their knowledge. DOJ (NJ)
Former Immunosyn Corp. CEO convicted – The SEC had alleged that Stephen D. Ferrone signed and certified public filings that misled investors about the regulatory status of its sole product called SF-1019, a drug derived from goat blood that was intended to treat a variety of ailments. SEC
Twenty-Five Miami-Area Defendants Charged with Submitting $26 Million in False Claims to the Medicare Part D Program – The defendants allegedly instructed pharmacy staff to submit false and fraudulent claims for prescription drugs that were not medically necessary and not provided to the Medicare Part D beneficiaries. Medicare beneficiaries were frequently referred to the pharmacies by patient recruiters, who received kickbacks for referring patients. DOJ
Halliburton and Baker Hughes Abandon Merger Following DOJ Suit to Block Deal – DOJ had alleged that the proposed merger, originally valued at $34 billion, would have unlawfully eliminated significant head-to-head competition between the companies in at least 23 markets crucial to the exploration and production of oil and natural gas in the United States. DOJ
Former SunTrust Mortgage VP and Loan Officers Sentenced to Prison for 24 and 15 months – The four individuals has been convicted in February for conspiracy and wire fraud related to their falsification of loan applications for borrowers, including the purchase of fake tax documents to support the false loan applications. DOJ (ED VA)
Academic Research Sheds Light on Whistleblower Weighing of Risk vs. Reward — A new study by researchers at Florida Atlantic University and Providence College has found that vivid language intended to assure potential whistleblowers they will be protected from retaliation is instead likely to evoke fear and make them less likely to report misconduct. It’s the first study to demonstrate that promoting explicit whistleblower protections can have the unintended consequence of actually inhibiting reporting of misconduct by intensifying the perceived risk of retaliation. South Florida Reporter
Ringling Bros. Circus Elephants Perform Last Show — In 1998, a whistleblower tipped off the People for the Ethical Treatment of Animals to the death of Kenny, a 3-year-old Asian elephant traveling with the Ringling Bros. Circus, prompting PETA to file a complaint with the US Dept. of Agriculture. Decades of litigation, protest and mounting scrutiny, as well as a shifting public opinion toward the captivity and use of wild animals for entertainment, forced the circus to phase out its long-running elephant act for good. Although the circus originally intended to maintain the act through 2018, it later chose to end the performances at least 18 months earlier than expected. WAPO
Big news for Donald Trump on the campaign trail. It has nothing to do with his inexorable march to the Republican nomination. It is about the fraud action New York brought against him concerning his now-defunct Trump University. On Tuesday, a New York judge ruled the case will go to trial, perhaps as early as the fall, clearly creating what could be another major sideshow in his bid for the White House.
This week’s Department of Justice “Catch of the Week” goes to the pharmaceutical giants Wyeth and Pfizer, Inc. On Wednesday, the companies agreed to pay $784.6 million to resolve allegations that Wyeth violated the False Claims Act by reporting to the government false prices on two of its proton pump inhibitor (PPI) drugs, Protonix Oral and Protonix IV. These drugs are used to treat acid reflux symptoms, among other things. New York City-based Pfizer acquired New Jersey-based Wyeth in 2009, roughly three years after Wyeth had ended the alleged misconduct. See DOJ Press Release.
— “Whistleblowers need to be able to disclose wrongdoing outside of their organizations. They need strong protections regardless of who first receives their complaint. Protecting internal reporting is important, but requiring it only discourages many would-be whistleblowers with evidence of actual wrongdoing from coming forward. Moreover, when they do, they are often subjected to the hostility of the ill-intentioned manager or worse, as in the case of Millenium Health, the company lawyers. Whistleblowers need their jobs to be safe or they will not come forward.”
Republican Senator Chuck Grassley’s testimony on requiring corporate whistleblowers to report fraud internally at a hearing on the False Claims Act before the House Subcommittee on the Constitution and Civil Justice. Click here for more.