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State Enforcement Actions

					
Each state enforces its laws and defends its interests, and states often work with the federal government in investigating and prosecuting corporate frauds.  Whistleblowers with knowledge of fraud or wrongful conduct that involves state or local funds or programs may be able to bring a claim under a state or local False Claims Act, and may be eligible to receive a monetary reward and protection against retaliation.


Below are summaries of recent settlements, successful prosecutions, and enforcement actions by states. If you believe you have information about fraud which could give rise to a claim under a State or Local False Claims Act or other whistleblower reward provision, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
October 24, 2022

				 The nation’s largest chicken producer, Tyson Foods, has agreed to pay $10.5 million to settle a lawsuit that alleged the company, along with 18 other broiler chicken producers, had been conspiring since 2008 to drive up chicken prices.  Their actions allegedly caused consumers to overpay by millions of dollars, and violated the Washington Consumer Protection Act’s antitrust provisions.  Two other broiler chicken producers have settled thus far—Mar-Jac Poultry for $725,000, and Fieldale Farms Corp. for $475,000—bringing the total recovery in this matter to $11.7 million.  AG WA				 					 

						
Tagged in:
													  Price Fixing, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 17, 2022

				 In one of New Jersey’s largest civil monetary recoveries ever, Credit Suisse Securities (USA) LLC, Credit Suisse First Boston Mortgage Securities Corp., and DLJ Mortgage Capital, Inc. (collectively, “Credit Suisse”) has agreed to pay $495 million to settle a lawsuit involving misrepresentations it made to investors on the risks of residential mortgage-backed securities (RMBS) in the years leading up to the 2008 financial crisis.  Approximately $100 million will resolve a civil monetary penalty, while another $300 million will be allocated toward restitution for victims nationwide.  Although Credit Suisse previously settled with DOJ for $5.28 billion and with New York for $10 million, the New Jersey settlement is the first to provide restitution.  NJ AG				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Housing and Mortgage Fraud, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 12, 2022

				 The owner of popular fashion ecommerce websites SHEIN and ROWME, Zoetop Business Company, Ltd., has agreed to pay $1.9 million to settle charges that it failed to properly safeguard consumer information, failed to protect accounts impacted by a data breach, and downplayed the extent of the breach to consumers.  In June 2018, attackers stole the names, email addresses, hashed passwords, and credit card information of 39 million SHEIN consumers worldwide, but Zoetop failed to alert more than 32.5 million of them that their login credentials had been compromised.  Two years later, Zoetop discovered that 7 million ROWME consumers were also affected.  AG NY				 					 

						
Tagged in:
													  Cybersecurity and Data Breaches, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 3, 2022

				 South Carolina-based Radeas, LLC has agreed to pay $3.6 million to settle allegations of submitting false claims to North Carolina’s Medicaid program.  Radeas had allegedly billed Medicaid for simultaneously-performed presumptive and definitive urine drug tests, in violation of Medicaid policy and standard practice to run definitive tests after presumptive tests come back positive.  NC AG				 					 

						
Tagged in:
													  FCA State, 
													  Healthcare Fraud, 
													  Laboratory and IDTF, 
													  Medicaid, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 13, 2022

				 Uber Technologies Inc. and subsidiary Rasier LLC have paid $100 million to the New Jersey Department of Labor and Workforce Development’s Unemployment Trust Fund after the agency found that nearly 300,000 Uber drivers in the state were improperly classified as independent contractors and thus ineligible for safety net benefits.  The companies were originally assessed $523 in overdue contributions, with penalties and interest adding up to another $119 million, but contested the amount and made the payment based on a revised assessment.  NJ AG				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 12, 2022

				 Two cigarette companies, Canada-based Grand River Enterprises Six Nations, Ltd., and its wholesaler, New York-based Native Wholesale Supply Company, Inc., have agreed to pay $50 million and follow corrective measures to resolve charges of evading New York state taxes.  According to the AG, Grand River—which manufactures Couture, Opal, and Seneca cigarettes—knew that its distributor, Native Wholesale, was not licensed to distribute or sell cigarettes in the state, and thus their cigarettes would not be taxed or stamped in accordance with state law, making their prices artificially lower and more accessible to young consumers.  NY AG				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 6, 2022

				 JUUL Labs has settled with thirty-four states and territories and agreed to pay $438.5 million and abide by strict injunctive terms in order to resolve an investigation into its marketing and sales practices.  The investigation had revealed that JUUL willfully targeted underage users, relied on age verification techniques it knew were ineffective, manipulated the chemical composition of its products to be less harsh for inexperienced users, and implied that its products contained lower concentrations of nicotine than it actually did.  DE AG; GA AG; OR AG; VA AG				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 24, 2022

				 Centene will pay Washington State $19 million to resolve allegations that the company overcharged the state for pharmacy benefit management services.  The state alleged that Centene failed to pass on discounts it received to the state Medicaid program, and inflated dispensing fees.  WA				 					 

						
Tagged in:
													  Drug and DME Pricing, 
													  Healthcare Fraud, 
													  Medicaid, 
													  Pharma Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 24, 2022

				 James R. Lee and entities affiliated with him – Lee Oil Company, Inc., Whitesville Producing Corporation, Whitesville Production Corp., Allegro Oil & Gas Inc., and Allegro Investments Corporation – have been ordered to pay a penalty of $2 million for their failures to follow environmental laws with respect to over 400 oil wells they operated in western New York State.  The court found numerous violations, including defendants’ failures to plug over 400 wells and their failures to file required reports.  NY				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 23, 2022

				 Essilor International and related subsidiaries, which manufacture, market, and distribute optical lenses and equipment to produce optical lenses—have agreed to pay $22 million to resolve federal and state allegations of defrauding Medicare and Medicaid.  In two separate qui tam suits, former sales managers Laura Thompson and Lisa Brez, and Christie Rudolph alleged that Essilor violated the Anti-Kickback Statute and False Claims Act by paying illegal kickbacks to optometrists and opthalmologists to induce purchases of their products for patients, including patients covered by Medicare and Medicaid.  $5.6 million of the total settlement was allocated between states that were parties to the settlements, and $16.4 million to the federal government. DOJ; USAO EDPA; USAO NDTX; CO; CT; SD (see later CA settlement)				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
													  FCA Federal, 
													  FCA State, 
													  Healthcare Fraud, 
													  Medicaid, 
													  Medical Devices and DME, 
													  Medicare, 
													  Whistleblower Case, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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