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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.

				

			

			
						
					
			

	
		
		

			

				
				
December 15, 2015

				 Comcast Cable Communications LLC agreed to pay a total of $25.95 million in penalties and other amounts to settle claims by the State of California that it unlawfully disposed of both hazardous waste (primarily e-waste such as remote controls, routers, etc.) and sensitive customer information.  CA				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 10, 2015

				 New Jersey announced that Accutest Laboratories would pay the State $2 million to resolve allegations that it deviated from both federal and state requirements for the extraction and testing of certain compounds, thereby submitting false claims to the State and its agencies for payment.  The State and its agencies – including the New Jersey Department of Environmental Protection (DEP) – had contracted with Accutest to perform a variety of environmental tests in its extraction laboratory.  The allegations central to today’s settlement flow from a federal qui tam or “whistleblower” lawsuit filed two years prior by a former Accutest employee, Koroush Vaziri.  The New Jersey Attorney General said that the settlement was the largest non-Medicaid-related False Claims Act settlement entered into by the State since New Jersey’s False Claims Act took effect in March 2008.  NJ				 					 

						
Tagged in:
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 4, 2015

				 The New York Attorney General announced the arrest of two individuals for allegedly defrauding the state of more than $3 million.  The indictment alleges that the individuals and related companies paid patients not to fill their HIV prescriptions and to forego receiving life-saving medications in return for side payments, as well as with dispensing to patients “diverted” medications obtained from unlicensed vendors.  The parties then submitted false claims to Medicaid and the state AIDS Drugs Assistance Program (ADAP), claiming to have dispensed the medications to patients in accordance with state and federal law.  NY				 					 

						
Tagged in:
													  Pharma Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 24, 2015

				 In a series of related cases, a former hospital CFO, two orthopedic surgeons and two others have been charged in long-running health care fraud schemes that illegally referred thousands of patients for spinal surgeries and generated nearly $600 million in fraudulent billings over an eight-year period.  The schemes involved tens of millions of dollars in illegal kickbacks to dozens of doctors, chiropractors and others.  As a result of the illegal payments, thousands of patients were referred for spinal surgeries at California hospitals.  Many of the fraudulent claims were paid by the California worker’s compensation system and the federal government.  CA				 					 

						
Tagged in:
													  Anti-Kickback and Stark, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 20, 2015

				 The New Jersey Bureau of Securities filed legal action against, and separately revoked the registrations of, two individuals who are alleged to have defrauded over 170 investors out of millions of dollars in a scheme involving investment in a Florida condominium complex called Esplanade at Millennia Condominiums.  NJ				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 4, 2015

				 The federal government, District of Columbia, and 48 states, settled claims against AstraZeneca LP and Cephalon, Inc., for a total of $54 million.  The settlement resolves allegations that AstraZeneca and Cephalon under-paid drug rebates owed to the states.  Under the federal law known as the Medicaid Drug Rebate Program, drug manufacturers must periodically return a portion of the amount paid by state Medicaid programs for the manufacturers’ drugs.  The rebate program is designed to ensure that states pay competitive prices for drugs, and is calculated based on a percentage of the average price drug wholesalers pay for the manufacturers’ drugs.  This average price, which the manufacturer reports to the federal government, is known as the Average Manufacturer’s Price or “AMP.”  The greater the AMP reported by the manufacturer, the greater the rebate the manufacturer must pay.  NY; MA; NH				 					 

						
Tagged in:
													  Drug and DME Pricing, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 3, 2015

				 In a consent judgment, Hess Corporation has agreed to pay $4.4 million over allegations that it illegally obtained reimbursements from a Massachusetts state fund for environmental cleanup projects at dozens of gasoline service stations throughout the state.  The complaint alleged that Hess submitted reimbursement applications to the Massachusetts Underground Storage Tank Petroleum Product Cleanup Fund program (UST Fund) with false certifications in that they failed to disclose the companies’ insurance claims, and therefore were not in compliance with applicable regulations.  MA				 					 

						
Tagged in:
													  Contract Non-Compliance, 
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 3, 2015

				 A construction company, D’Allessandro Corp., has agreed to pay $190,000 and conduct trainings to resolve allegations it falsely certified compliance with equal opportunity requirements on multiple public construction contracts in Massachusetts.  MA				 					 

						
Tagged in:
													  Contract Non-Compliance, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 21, 2015

				 14 states, as well as the District of Columbia and the cities of Chicago and New York, reached a $4 million settlement with UPS, resolving allegations brought by a whistleblower that that certain UPS employees recorded inaccurate delivery times on packages sent by governmental customers through next-day delivery services, resulting in premium-priced packages that appeared to have been delivered by their guaranteed commitment times when they had not been timely delivered. The lawsuit also alleged that certain UPS employees applied inapplicable or inappropriate exception codes to excuse late next-day packages, including claims of weather emergencies despite sunny conditions. As a result, the governmental customers were unable to claim or receive refunds for the late deliveries under the terms of their contracts. FL; IL; NY; MA; NM; VA				 					 

						
Tagged in:
													  Falsifying Invoices, 
													  Whistleblower Case, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
October 21, 2015

				 United Parcel Service has agreed to pay $4 million to resolve allegations that the company violated the false claims acts of 14 states, New York City, Washington D.C., and Chicago.  Under contracts at issue between UPS and the government, UPS guaranteed delivery of packages by certain specified times the following day. The investigation began after a UPS employee filed a federal whistleblower lawsuit in Virginia alleging that a practice of falsifying package arrival times and logging in phony reasons for late arrivals went on company-wide. The UPS employee alleged that, in some cases, bogus exception codes excusing late deliveries were entered into the tracking system before UPS drivers had even arrived at locations where cumbersome security procedures and other delays had purportedly occurred. The state settlement follows an earlier $25 million settlement with the federal government.  NJ; NY				 					 

						
Tagged in:
													  Contract Non-Compliance, 
													  FCA State, 
													  Government Procurement Fraud, 
													  Whistleblower Case, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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