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WB Group Successes

Members of the Constantine Cannon Whistleblower Lawyer Team have been responsible for a string of major whistleblower successes over more than a decade.  Please see our Whistleblower Team Successes page.

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Rose Cancer Center — Medicare Fraud ($5.7 million).

Two of our whistleblower attorneys co-led the representation of Kristi Beeson who reported Medicare fraud violations at her former employer Rose Cancer Center in Mississippi. Ms. Beeson, who was a laboratory technician for the clinic, brought a qui tam action under the False Claims Act against the clinic alleging, among other things, unqualified technicians performing bone marrow biopsies, diluting chemotherapy drugs, and doctoring patient records to conceal the clinic’s fraudulent Medicare billings. The physician who owned and ran the practice, Dr. Meera Sachdeva, plead guilty to various Medicare fraud violations, forfeited $5.7 million, and is now serving a 20 year prison sentence for her crimes. Ms. Beeson, along with three other whistleblowers, collectively received a whistleblower award of $525,000 for their efforts in exposing the fraud. See Clarion Ledger for more.

Ocean Carriers — Government Contracting Fraud/Prohibited Charges.

Two of our whistleblower attorneys led the representation of a whistleblower who brought a qui tam action under the False Claims Act against two ocean carriers alleging they included in their government invoices charges specifically disallowed under the government contract. The ocean carriers did not have direct contracts with the government and submitted their invoices to parties who in turn presented them to the Department of Defense. Although the government declined to intervene because of uncertainties created by the lack of direct interaction between the defendants and the United States, our whistleblower lawyers pressed ahead, defeating multiple motions to dismiss and aggressively moving forward with discovery. The action settled with both defendants, and the whistleblower was awarded 28% of the government’s recovery. See Pacific Business News and Ship and Bunker News for more.

JM Eagle — Government Contracting Fraud/Noncompliance with Industry Standards ($22.5 million).

Two of our whistleblower attorneys led the representation of whistleblower John Hendrix, a former engineer at JM Eagle, as well as dozens of public agencies, in a two-month jury trial in Los Angeles against JM Eagle, the largest PVC pipe maker in the world. The jury returned a 50-page verdict finding that, over a ten-year period, JM Eagle had falsely represented its compliance with industry standards related to long term strength and durability of its PVC pipe. The pipe is buried deep underground in hundreds of municipalities around the nation. The damages phase of the case has not yet been held. However, a co-defendant in the case, Formosa Plastics, paid $22.5 million to settle its own potential liability, and Mr. Hendrix received a whistleblower reward from that settlement. See NY Times and Corporate Crime Reporter for more.

ATK — Government Contracting Fraud/Defective Product ($37 million).

One of our whistleblower attorneys led the representation of Kendall Dye, an engineer with what was formerly ATK Thiokol and is now ATK Launch Systems, who brought a qui tam action under the False Claims Act against ATK for selling defective flares to the United States military. According to the complaint, company testing revealed the flares could accidentally ignite if dropped from a height of as little as 11 inches. The flares burn at thousands of degrees, and are capable of burning through the hull of a ship, creating a significant safety risk. The government joined Mr. Dye’s case, and ATK ultimately settled for $37 million, with Mr. Dye receiving a whistleblower reward of $9 million. See NY Times for more.

Northrop Grumman — Government Contracting Fraud/Failure to Test ($12.5 million).

One of our whistleblower attorneys led the representation of Allen Davis, a former quality assurance manager at Northrop’s Navigation Systems Division facility in Salt Lake City, who brought a qui tam action under the False Claims Act, alleging the defense contractor failed to test properly certain commercial parts it supplied for navigation systems in warplanes, submarines and space equipment. Northrop ultimately settled the case for $12.5 million with Mr. Davis receiving a portion of that amount as a whistleblower award. See Reuters for more.

Tyco — Government Contracting Fraud/Noncompliance with Industry Standards ($60 million).

One of our whistleblower attorneys led the representation of Nora Armenta and dozens of California municipalities in a qui tam action under the False Claims Act against Tyco International, Mueller Co., and the James Jones Company, alleging they sold waterworks parts to municipal water systems that were made with 40% more lead than allowed by industry standards. According to her complaint, Ms. Armenta repeatedly warned her superiors that the parts were for drinking water, but was ignored. The defendants settled the case, but only after 13 years of litigation, including three successful appeals that reversed unfavorable trial rulings. The defrauded municipalities received $60 million, and Ms. Armenta received a whistleblower reward of $15 million.

Northrop Grumman/TRW — Government Contracting Fraud/Defective Products ($325 million).

One of our whistleblower attorneys led the representation of Robert Ferro, who was a scientist for a TRW Inc. subcontractor, in a qui tam action under the False Claims Act against Northrop Grumman (which has since acquired TRW). Mr. Ferro alleged TRW sold classified “spy” satellites to the government with defective components that caused the satellites to fail while on orbit. According to the complaint, when Mr. Ferro brought the defect to the attention of TRW engineers, he was threatened and directed not to reveal the information to anyone in the government. Northrop ultimately settled the case for $325 million, the largest ever whistleblower settlement by a defense contractor. Mr. Ferro received a whistleblower award of $48.7 million. See NY Times, Wall Street Journal, Washington Post and LA Times for more.

LA Dep’t. of Water & Power — Government Contract Fraud/Utility Overcharges ($224 million).

Four of our whistleblower attorneys led the representation of whistleblower Sam Barakat, as well as the County of Los Angeles, the Los Angeles Unified School District, and other government agencies in a whistleblower action against the Los Angeles Department of Water and Power. The plaintiffs alleged that the DWP had overcharged these schools and other public agencies for electric power over a ten-year period of time. The case involved a ground-breaking legal theory that had never been tested in court. It also involved dissecting elaborate cost accounting to demonstrate government customers had been overcharged relative to the true cost of service. Following a two-month trial, a verdict was returned against the DWP for $224 million. See LA Times, UT San Diego, and National Law Journal for more.

Hanson Aggregates — Government Underpayments on Public Resource Lease ($48 million).

Two of our whistleblower attorneys led the representation of a whistleblower in a qui tam action filed under the California False Claims Act alleging underpayments (or “reverse false claims”) under a public resource lease. Specifically, the three defendants, which were engaged in dredging and selling sand and gravel from public lands, were alleged to have paid the State of California less than what was owed by under-reporting the quantity of the sand and gravel removed, as well as its value. Dubbed the “sand pirates” by the media, the defendants allegedly “sold” the sand to affiliated companies they set up, and used artificially deflated prices from those purported sales, instead of the prices paid in real third party transactions when calculating and reporting royalties due the State. Critical issues concerning the proper interpretation of the related leases and related accounting issues were resolved in favor of the government following a seven week trial, in which one of our whistleblower lawyers served as lead trial counsel. The case settled before the next trial phase. California recovered $48 million in combined settlement payments and price adjustments. The whistelblower, a tugboat captain, received a whistleblower award of 30% of the government’s recovery. It was the second-largest recovery for a whistleblower under California state law. See California AG Press Release and Oakland Tribune for more.

Health Line Clinical Laboratories — Medicare Fraud/Unnecessary on Nonexistent Testing ($10 million).

One of our whistleblower attorneys led the representation of two whistleblowers who brought a qui tam action under the False Claims Act alleging the medical laboratory was charging for tests not performed or not necessary. For many of the tests involved, records suggested treating physicians had ordered over inclusive “747” panels, and the defense relied heavily on these order forms. The Department of Justice was persuaded the defendants’ conduct caused the unnecessary testing and intervened. Following the defeat of motions to dismiss and focused discovery the case settled for $10 million. The whistleblowers received 18% of the government recovery.

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