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DOJ Enforcement Actions

					
The Department of Justice is the principal federal agency authorized to enforce the laws and defend the interests of the United States. As such, it oversees the enforcement of the False Claims Act, the foundation of the American whistleblower system, as well as numerous other laws.


The agency traces its origins to the Judiciary Act of 1789 which created the Office of the Attorney General, and the 1870 Act to Establish the Department of Justice, which established the agency as “an executive department of the government of the United States” with the Attorney General as its head.


The agency is comprised of numerous divisions with the Civil Division and in some instances, the Criminal Division, overseeing investigations and prosecutions under the False Claims Act. The U.S. Attorneys Office of the federal district where the False Claims Act case is filed also plays a key role in False Claims Act enforcement.


Below are summaries of recent DOJ settlements or successful resolutions under the False Claims Act as well as other successful prosecutions for fraud and misconduct. If you believe you have information about fraud which could give  rise to a claim for a whistleblower reward, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
January 19, 2017

				 Nevada-based gaming and resort company Las Vegas Sands Corp. agreed to pay a $6.96 million criminal penalty to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) in connection with business transactions in China and Macao. According to admissions by Sands, certain Sands executives failed to implement internal accounting controls to ensure the legitimacy of payments to a business consultant who assisted Sands in promoting its brand in China and Macao and to prevent the false recording of those payments in its books and records. Sands continued to make payments to the consultant despite warnings from its finance staff and an outside auditor that the business consultant had failed to account for portions of these funds. In addition, Sands terminated the finance department employee who raised concerns about the payments. Sands also agreed to pay a civil penalty of roughly $9 million to settle related SEC charges for a total payout of roughly $16 million. DOJ				 					 

						
Tagged in:
													  Accounting Fraud, 
													  FCPA, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 19, 2017

				 Meadowvale Dairy, LLC -- which operates multiple concentrated animal feeding operations in Rock Valley, Iowa -- agreed to pay a civil penalty of $160,000 for alleged violations of the Clean Water Act related to mismanagement of animal wastes. The company also agreed to take actions to prevent illegal discharges to Iowa streams which EPA estimates will result in a reduction of approximately 200,000 pounds of pollutants discharged annually into Iowa streams. DOJ				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 19, 2017

				 Costco Wholesale will pay $11.75 million to settle allegations that its pharmacies violated the Controlled Substances Act when they improperly filled prescriptions for controlled substances. The settlement resolves allegations that Costco pharmacies filled prescriptions that were incomplete, lacked valid Drug Enforcement Administration (DEA) numbers or were for substances beyond various doctors’ scope of practice. Additionally, the settlement resolves allegations that Costco failed to keep and maintain accurate records for controlled substances at its pharmacies and centralized fill locations. In addition to the payment, Costco purchased a new pharmacy management system at a total budgeted five year cost of approximately $127 million. DOJ				 					 

						
Tagged in:
													  Pharma Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 19, 2017

				 Magellan Pipeline Company agreed to roughly $16 million worth of injunctive relief across its 11,000 mile pipeline system and to pay a $2 million civil penalty to resolve alleged violations of the Clean Water Act related to gasoline, diesel and jet fuel spills in Texas, Nebraska and Kansas. DOJ				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 19, 2017

				 Colorado-based global money services business Western Union Company agreed to forfeit $586 million and enter into agreements with DOJ, FTC, and the U.S. Attorney’s Offices for the Middle District of Pennsylvania, the Central District of California, the Eastern District of Pennsylvania and the Southern District of Florida to settle criminal violations relating to the company's failure to maintain an effective anti-money laundering program and aiding and abetting wire fraud. According to company admissions, Western Union violated the Bank Secrecy Act (BSA) and anti-fraud statutes by processing hundreds of thousands of transactions for Western Union agents and others involved in an international consumer fraud scheme. As part of the scheme, fraudsters contacted victims in the U.S. and falsely posed as family members in need or promised prizes or job opportunities. The fraudsters directed the victims to send money through Western Union to help their relative or claim their prize. Various Western Union agents were complicit in these fraud schemes, often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds. The company also agreed to pay a $586 million judgement to settle related FTC charges. DOJ				 					 

						
Tagged in:
													  Financial Institution Fraud, 
													  Money Laundering, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 19, 2017

				 Nationwide retail pharmacy operator Walgreen Co. agreed to pay $50 million to settle charges it violated the False Claims Act and the Anti-Kickback Statute by enrolling hundreds of thousands of beneficiaries of government healthcare programs in its Prescription Savings Club program by inducing them with discounts and other monetary incentives. According to the government, Walgreens understood that allowing government beneficiaries to participate in the program was a violation of the Anti-Kickback Statute but nevertheless marketed the program to them anyway and paid its employees bonuses for each customer they enrolled in the program, without verifying whether the customers were government beneficiaries. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. DOJ (SDNY)				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  FCA Federal, 
													  Pharma Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 18, 2017

				 Dmitriy V. Melnik, the owner and operator of Candy Color Lenses, a major online retailer of colored contact lenses, was sentenced to 46 months in prison and to pay $200,000 in restitution and forfeit $1.2 million for running an international operation importing counterfeit and misbranded contact lenses from suppliers in Asia and then selling them over the internet without a prescription to tens of thousands of customers around the country. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
January 18, 2017

				 Massachusetts-based global financial services company State Street Corporation agreed to pay a $32.3 million criminal penalty to resolve charges it engaged in a scheme to defraud a number of the bank’s clients by secretly applying commissions to billions of dollars of securities trades. The company also agreed to pay the SEC a civil penalty of the same amount to settle related charges for a total government payout of roughly $65 million. According to company admissions, bank employees conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. State Street employees took steps to hide the commissions from the clients. DOJ				 					 

						
Tagged in:
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 18, 2017

				 Credit Suisse agreed to pay $5.28 billion to resolve charges it misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) in the years leading up to the Great Recession. As part of the settlement, the bank agreed to a detailed Statement of Facts describing how it knowingly made false and misleading representations to investors about the characteristics of the billions of dollars of mortgage loans it securitized in RMBS. Whistleblower Insider				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
													  Misrepresentations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 17, 2017

				 Deutsche Bank agreed to pay $7.2 billion to resolve charges it misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) in the years leading up to the Great Recession. It is the largest RMBS resolution in what has been a string of multi-billion dollar settlements. As part of the settlement, the bank agreed to a detailed Statement of Facts describing how it knowingly made false and misleading representations to investors about the characteristics of the billions of dollars of mortgage loans it securitized in RMBS. Whistleblower Insider				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
													  Misrepresentations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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