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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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June 1, 2022

Caris Life Sciences, Inc. will pay $2.9 million to resolve claims that it falsely billed Medicare for laboratory tests to detect the activity of certain genes within a tumor that predicted the risk of recurrence by fraudulently circumventing Medicare’s 14-day rule, which, during the relevant time period, prohibited laboratories from separately billing Medicare for tests performed on specimens if a physician ordered the test within 14 days of the patient’s discharge from a hospital stay.  By submitting separate claims for the laboratory tests, Medicare paid twice for the same service, first to the hospital as part of the hospital’s lump-sum DRG payment, and in a direct payment to Caris.  Caris allegedly discouraged providers from ordering testing within 14 days of discharge, or canceled and re-submitted orders to avoid the 14 day window.  The settlement covers two separate whistleblower actions.  USAO EDNY

May 31, 2022

Healthcare company SCWorx Corp. has agreed to resolve SEC charges that it made false and misleading statements in an April, 2020 press release, claiming in a press release that it had received a purchase order for millions of COVID-19 rapid test kits.  The announcement caused the company’s stock price to surge, but the SEC alleged that the company had neither a legitimate supplier of COVID-19 test kits nor an executed purchase agreement with a buyer.  When the true facts became public, investors lost at least $116 million.  The company has agreed to pay a civil penalty of $125,000 and contribute stock valued at $600,000 as disgorgement and prejudgment interest to harmed investors in a private class action.  The company’s former CEO, Marc Schessel, has been indicted for securities fraud with respect to the scheme.  SEC; USAO NJ

Constantine Cannon Whistleblower Attorneys File Brief to Supreme Court on Behalf of Senator Grassley

Posted  05/26/22
Abraham Lincoln Monument
Constantine Cannon whistleblower attorneys were proud to represent long-time champion of the False Claims Act (FCA) Senator Charles Grassley in filing an amicus brief to the United States Supreme Court. In the brief, available here, Senator Grassley urges the Court to repair a worrying trend among certain courts that is undermining the statute. Specifically, the brief describes how the Seventh Circuit’s decision...

May 25, 2022

RiverSource Distributors Inc. will pay a $5 million civil penalty for violating Section 11 of the Investment Company Act by employing sales practices wherein variable-annuities-holding customers were unknowingly switched from one variable annuity to another, increasing sales commissions for employees and boosting RiverSource’s revenues. These trades were effectuated through Ameriprise Financial Services, LLC, an affiliated broker-dealer/investment adviser. RiverSource’s compliance department caused the sales practice to stop in 2018, but only after these types of transactions saw a significant increase from 2016 until then. RiverSource was also hit with a cease-and-desist order and a censure, in addition to the civil penalty. This is the SEC’s first-ever enforcement proceeding under Section 11. SEC

May 25, 2022

Twitter will pay $150 million in civil penalties and implement new compliance measures to settle allegations of FTC Act violations by misrepresenting how it would deploy users’ nonpublic contact information, affecting more than 140 million Twitter users. From 2013 to 2019, Twitter collected users’ telephone numbers and email addresses under the guise of account security protocols, while concealing their secondary use of this information to help companies send targeted ads to consumers, which thereby increased Twitter’s primary source of revenue. In addition to the monetary penalty, Twitter is required to implement a new privacy and information security program and comply with numerous other reporting and record-keeping requirements. DOJ, USAO NDCA

May 25, 2022

Textile manufacturer HEYtex USA will pay $3 million to resolve an action brought by a whistleblower under the False Claims Act alleging that the company knowingly supplied fabrics to the U.S. military that failed to meet contract specifications, and falsely certified that its military-grade fabrics met specifications when, in fact, they had failed to pass required testing.  The whistleblower first reported the falsified test results to company management, but was initially ignored.  USAO WD Va

May 24, 2022

Switzerland-based mining and commodity trading firm Glencore International A.G. and an affiliate have agreed to pay over $1.1 billion in criminal penalties and forfeitures, and will plead guilty to violations of the Foreign Corrupt Practices Act and conspiracy to engage in commodity price manipulation.  In addition, the companies will pay over $1.186 billion in civil penalties and disgorgement in settlement with the CFTC.  As part of the criminal plea agreement, Glencore admitted that between 2007 and 2018, it corruptly provided more than $100 million in payments and other things of value to intermediaries for the payment of bribes to officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of the Congo.  With respect to the commodity price manipulation scheme, the CFTC found that from as early as 2007 through at least 2018, Glencore sought to increase profits from its physical and derivatives oil products trading by manipulating or attempting to manipulate four U.S. based S&P Global Platts physical oil benchmarks and related futures and swaps.  Criminal fines and forfeitures total over $700 million for the FCPA violations and nearly $486 million for the for the market manipulation violations, which amounts are subject to credits for amounts paid to the CFTC and foreign authorities including the United Kingdom.  The $1.186 billion CFTC resolution will also be reduced, with Glencore receiving credit for payments in the criminal resolutions.  DOJ; USAO SDNY; CFTC

May 24, 2022

The owners of the Motor Vessel Joanna, Empire Bulkers Limited and Joanna Maritime Limited, will pay $2 million and plead guilty to violations of the Act to Prevent Pollution from Ships, admitting to knowingly falsifying the ship’s Oil Record Book to conceal unlawful discharges of oil.  Modifications to the vessel’s oil content monitor had been made so that discharge samples from the oily water separator were diluted with fresh water, thereby leading the oil content monitor to report erroneous concentrations.  DOJ; USAO ED LA

May 24, 2022

Dr. Roger Wang will pay over $1 million for violations of the False Claims Act committed by charging Medicare for non-FDA-approved drugs and associated services. Dr. Wang, a rheumatology specialist, injected his patients with drugs like Synvisc, Synvisc One, or Orthovisc—vicosupplements used to treat osteoarthritis pain—that were not FDA-approved for distribution in the US, and therefore not billable to Medicare. USAO NDCA

May 23, 2022

Art dealer Inigo Philbrick will spend 7 years in prison and forfeit over $86 million for defrauding investors to finance his art business. Over a 3-year period, from 2016 through 2019, Philbrick misrepresented the ownership of certain artworks, selling multiple ownership interests in an artwork totaling more than 100%; created fraudulent contracts and records to further the scheme; made material misrepresentations and omissions to collectors, investors, and lenders; and sold or used artworks as collateral on loans without the knowledge of the artworks’ co-owners. The fraud was eventually exposed when investors learned of the fraudulent records and material misrepresentations Philbrick had made, and a lender notified Philbrick that he was in default on a $14 million loan. USAO SDNY
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