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Whistleblower Group

This archive page contains posts by the Whistleblower Practice Group.  For all Whistleblower pages, please see: 

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May 14, 2021

Dusko Bruer, who owned and operated an agricultural machinery company, was sentenced to two years in prison and ordered to pay $2.8 million in restitution following his conviction on tax evasion charges.  Between 2003 and 2009, Bruer's company did not file or pay either corporate or employment taxes.  Bruer was not paid a salary; instead, he used funds from corporate bank accounts for personal expenses.  Bruer also failed to report foreign bank accounts that he owned and controlled, and to which he transferred millions of dollars between at last 2006 and 2015.   DOJ

May 14, 2021

Texas dentists Gunjan Dhir and Gaurav Puri and their affiliated management companies and practice groups will pay $3.1 million to resolve allegations that they fraudulently charged the Texas Medicaid program for pediatric dental services.  The investigation was initiated by the filing of a qui tam complaint by whistleblowers Sandy Puga, Nelda Torres-Brown, and Sonia Cardoso, who were former employees of defendants and will receive an undisclosed share the settlement.  Defendants allegedly billed for services that were not actually provided and/or misreported the provider of services by using erroneous Medicaid provider numbers.  USAO ND Texas

May 14, 2021

Swiss insurance company Swiss Life Holding AG and related entities will pay $77 million and enter into a deferred prosecution agreement admitting that they conspired with U.S. taxpayers to  conceal more than $1.452 billion in assets and income in offshore insurance policies and related policy investment accounts.  From 2005 to 2014, Swiss Life maintained approximately 1,608 Private Placement Life Insurance policies known as “insurance wrappers,” with associated policy investment accounts with Swiss Life entities identified as the owner, allowing U.S. taxpayers to hide undeclared assets and income and evade taxes.  Beginning in 2008, Swiss Life specifically marketed such policies to taxpayers withdrawing assets from UBS and other Swiss banks in response to offshore tax enforcement efforts aimed at those bank.  DOJ; USAO SDNY

Catch of the Week: University of Miami to Pay $22 Million to Resolve Allegations of Lab Test Fraud

Posted  05/14/21
By Leah Judge
University of Miami logo
The University of Miami will pay $22 million to resolve three False Claims Act lawsuits, the first of which was filed in 2013.  The government alleged that UM, which operates a medical school out of Jackson Memorial Hospital and an extensive health system spanning four south Florida counties, fraudulently billed government health care programs to boost declining revenues.  Jackson Memorial will separately pay $1.1...

May 13, 2021

Financial services company State Street Corporation will pay a $115 million criminal penalty and enter into a deferred prosecution agreement following its voluntary disclosure to authorities that, over the course of 17 years, the bank defrauded its clients out of $290 million.  State Street  admitted that it secretly marked up “out-of-pocket” (OOP) expenses charged to clients, despite telling clients that OOP expenses were passed through without markups. State Street executives took steps to conceal the mark-ups from clients, including by misleading clients when they inquired about what they were being charged for OOP expenses. As part of the settlement, defendant agreed to cooperate with ongoing investigations, to enhance its compliance program, and to retain an independent corporate compliance monitor for a period of two years. DOJ

May 12, 2021

Technology company MobileActive will pay $500,000, and its principal Katrin Verclas will serve two years in prison in civil and criminal resolutions arising from the defendants' scheme to defraud the U.S. State Department's Bureau of Democracy, Human Rights, and Labor ("DRL").  In 2010, MobileActive applied for and was awarded a $1.4 million DRL grant to develop and promote a "mobile security toolkit" for human rights organizations and activists to use in assessing and mitigating risks associated with mobile communications. After claiming $1.2 million in grant funds, Verclas failed to respond to requests for information from the State Department; she has admitted that she failed to comply with grant requirements, and directed the funds to her personal use while concealing the nature of the transactions from MobileActive's bank.  USAO MD

May 12, 2021

Wireless communications provider Assurance Wireless, a subsidiary of Sprint (now T-Mobile), will pay $1.6 million to resolve claims under the Oregon False Claims Act that it overcharged low-income Oregonians purchasing voice and broadband service under the Oregon Lifeline program, which is funded with federal and state subsidies.  The settlement follows an FCC enforcement action that resulted from the state's investigation.  OR

May 12, 2021

Registered broker-dealer GWFS Equities Inc. will pay a penalty of $1.5 million to settle allegations that it failed to respond appropriately when it detected external bad actors gaining, or attempting to gain, access to the retirement accounts of participants in the employer-sponsored retirement plans it serviced, including through the use of improperly obtained electronic login information, user names, email addresses, and passwords. There was no allegation that this personal identifying information was disclosed in a breach of GWFS systems. However, the bad actors used this information to request distributions from plan participant accounts. While GWFS detected and blocked many of these attempts, the SEC charged that GWFS failed to file suspicious activity reports, or filed incomplete SARs, with respect to the account takeovers. SEC

May 12, 2021

The SEC made a whistleblower award of $3.6 million to an individual who provided new information that resulted in the opening of an SEC investigation directly based on that information, and provided ongoing assistance to the Commission during the course of the investigation.  At the same time, the SEC denied a whistleblower award to a second individual who submitted information regarding the company in the same covered action, finding that the information provided by the second claimant did not significantly contribute to the success of the Covered Action.  SEC

CFTC Whistleblower Program Faces Challenges of its Success: What Whistleblowers Should Know

Posted  05/11/21
Screenshot of CFTC Whistleblower Program web page
This week, the Wall Street Journal reported (paywall) on “turmoil” in the CFTC Whistleblower Program. According to the article, the CFTC has under consideration a whistleblower award of approximately $100 million, based on a claim by a whistleblower in the 2015 $2.5 billion Deutsche Bank LIBOR manipulation settlement.  Given the size of the Deutsche Bank settlement, the potential whistleblower award is...
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