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Multiple Whistleblowers and First-to-File

This archive displays posts tagged as relevant to multiple whistleblowers and first-to-file issues in whistleblower litigation. You may also be interested in our pages:

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September 3, 2021

A number of South Carolina pain management clinics, drug testing laboratories and other entities associated with chiropractor Daniel McCollum have had default judgments entered against them ordering the payment of $140 million.  The defendant entities, Oaktree Medical Centre P.C., FirstChoice Healthcare P.C., Labsource LLC, Pain Management Associates entities, ProLab LLC, and ProCare Counseling Center LLC, were alleged to have provided illegal financial incentives to providers to induce their referrals of urine drug tests in violation of the Stark Law and the Anti-Kickback Statute, and to have submitted false claims to federal healthcare programs for medically unnecessary urine drug testing, steroid injections, opioid prescriptions, and lidocaine ointment prescriptions.  The settlement resolves claims against the entities brought in three separate qui tam actions Donna Rauch, Muriel Calhoun, Brandy Knight, Karen Mathewson and Tracy Hawkins, former employees of pain management clinics owned or operated by McCollum. The government continues to pursue claims against McCollum.  DOJ; USAO SC

May 17, 2021

The SEC made an award of $750,000 to one whistleblower and $3.75 million to a second whistleblower based on findings that they provided information that assisted SEC staff in related civil and criminal proceedings against a company and individual.  The first individual provided information relevant to the action against the individual only, but did so more than five years after learning of the violation.  The second individual, who received a larger award, was originally denied any award by the SEC, but, upon reconsideration, the SEC concluded that they had voluntarily provided information to the Commission prior to being contacted by the Commission.  Three other claimants were denied awards.  SEC

May 17, 2021

Two whistleblowers were awarded a total of $27 million, with the SEC finding that the information they jointly and voluntarily provided aided an enforcement action which resulted in the return of millions of dollars to harmed investors, even through most of the information the individuals provided was already known the SEC from other sources. The two individuals had also reported their concerns internally and met in-person with SEC staff over the course of two days. SEC

Partner Mary Inman discusses SEC whistleblower reward program and Reenvisioning Whistleblowers as Forward Indicator of Risk at Stanford Rock Center “Whistleblowers, Ethics and Compliance” Event

Posted  03/19/21
On January 19, 2021, Constantine Cannon partner Mary Inman joined several esteemed co-panelists to discuss the recent amendments to the SEC Whistleblower program’s rules, SEC whistleblowers’  impact on securities law enforcement, and the nature and frequency of corporate whistleblowing in the “Whistleblowers, Ethics and Compliance” event organized by Stanford’s Rock Center for Corporate Governance. The...

July 24, 2020

Several divisions of pharmaceutical company Indivior, which marketed of the opioid-addiction drug Suboxone, pleaded guilty to felony healthcare fraud, entered into a five-year Corporate Integrity Agreement, and will pay a total of $600 million in criminal fines, restitution, civil damages, and penalties.  In six separate cases brought by whistleblowers, Indivior was also alleged to have caused false claims to be submitted to government healthcare programs including by promoting the sale of Suboxone to physicians who were prescribing it outside of medically accepted indication, misrepresenting the likelihood of Suboxone being diverted, and taking steps to delay generic competition for Suboxone. Indivior admitted making false statements about the safety of the film version of Suboxone in order to promote its sale.  In addition, the FTC claimed that violated antitrust laws through a deceptive scheme to thwart lower priced generic competition with Suboxone.  The total settlement consists of criminal restitution of $289 million; a civil settlement of $300 million, with $209.3 million paid to resolve claims by the federal government and $90.7 million to participating states; and, $10 million in penalties to the Federal Trade Commission.  The settlement also requires Indivior to take steps including the dissolution of its Suboxone sales force. Indivior was until 2014 a subsidiary of Reckitt Benckiser Group PLC, which previously paid $1.4 billion to resolve claims related to Suboxone marketing.  DOJ; USAO NJ; FTC

Centric Parts – Customs Fraud ($8 million)

In a customs fraud victory, the Constantine Cannon team represented whistleblower Steve Hughes in his successful False Claims Act action against his former employer, auto parts distributor CWD, LLC.  Hughes alleged that CWD, which does business as Centric Parts, misclassified brake pads imported from Asia as “unmounted” brake pads when they were, in fact, brake pads mounted to a metal backing plate, and therefor subject to a 2.5% tariff.  When Hughes learned of the misclassification, he immediately advised the CEO and CFO to disclose the issue to U.S. Customs and Border Protection.  Instead, the company concealed the misclassification and retaliated against Hughes.  As a result of Centric’s alleged omissions and false statements regarding its imported products, the company knowingly evaded millions of dollars of customs duties it owed to the United States.  The $8 million settlement resolved the Hughes lawsuit and one other qui tam action filed by a different whistleblower.  The whistleblowers shared a $1.48 million whistleblower award, representing 18.5% of the government’s recovery.  Whistleblower Insider; Press release

Time Limits Under The False Claims Act

Posted  02/14/20
fca whistleblower statute of limitations
If you have information about fraud, you may be able to bring a lawsuit on behalf of the government under the False Claims Act and receive a portion of any recovery. However, you should keep an eye on the clock. You have limited time to start your case before it could be barred by the False Claims Act’s statute of limitations or “first-to-file” rule.

What you should know about the False Claims Act Statute...

Catch of the Week: ResMed Pays $37.5 Million to Settle Five Qui Tam Cases Alleging Kickbacks

Posted  01/16/20
Pizza cut into wedges
Sleep apnea equipment manufacturer ResMed agreed to pay $37.5 million to resolve allegations that it violated the False Claims Act and Anti-Kickback Statute by providing unlawful remuneration to durable medical equipment distributors, sleep labs, doctors, and other healthcare providers.  It seems that ResMed’s kickback schemes struck many people as wrong: the settlement resolves five separate cases brought by...

July 11, 2019

Reckitt Benckiser Group plc, which marketed and sold the opioid addiction treatment drug Suboxone until 2014 through its then-subsidiary Indivior Inc., will pay a total of $1.4 billion in a global settlement resolving criminal, civil, and administrative claims.  In marketing Suboxone Film, Indivior allegedly made unsupported claims that the drug was less-divertable and less-abusable than other buprenorphine drugs, and steered patients to doctors known to have a history of over-prescribing Suboxone and other opioids.  In addition, Indivior was alleged to have discontinued its tablet Suboxone for pretextual reasons, claiming a concern for pediatric exposure when, in fact, the company was seeking to delay FDA approval of a generic form of tablet Suboxone.  In a non-prosecution agreement, RB Group will forfeit $647 million in proceeds it received from Indivior, will cooperate with ongoing investigations, and will not manufacture or market controlled substances in the U.S. for three years.  In resolution of civil claims with the U.S. and states, including six lawsuits filed by whistleblowers under the False Claims Act, RB Group will pay $700 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to federal- and state-funded government healthcare programs.  Finally, RB Group has agreed to pay $50 million in a settlement with the Federal Trade Commission to resolve claims that it engaged in unfair competition in seeking to impede generic equivalents of Suboxone.  DOJ; USAO W.D.Va.; FTC; VA; NY; PA

Second Relator to File Wins First-to-File Fight in First Circuit

Posted  05/16/19
Runners on track race to cross finish line
After Millennium Health agreed in 2015 to pay $227 million plus interest to settle claims that it submitted false claims bills for excessive urine testing, $34 million – 15% of the total – was set aside to resolve the competing claims of more than seven different relators who had filed qui tam cases against Millennium that were dismissed as part of the settlement.  Since that time, several of the relators have...
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