Whistleblower Case

February 1, 2016

Florida-based military contractor Centerra Services International Inc. (formerly known as Wackenhut Services) agreed to pay $7.4 million to resolve allegations it violated the False Claims Act by double billing and inflating labor costs on its firefighting and fire protection services contract with the Army in Iraq.  According to the government, Wackenhut inflated its labor costs by billing the salaries of certain managers as direct costs when those salaries had already been charged as indirect costs.  The government further charged that Wackenhut artificially inflated its labor rate by counting its costs for holidays, vacation, sick leave, rest and recuperation and other variable labor costs twice in calculating the rate.  The allegations first arose in a whistleblower lawsuit filed by Gary W. Reno under the qui tam provisions of the False Claims Act.  He will receive a whistleblower award of $1,332,000 as his share from the government’s recovery.  Whistleblower Insider

January 29, 2016

Amalya Cherniavsky and her husband Vladislav Tcherniavsky, the former owner and former operator of California-based durable medical equipment supply company JC Medical Supply were sentenced  for their roles in a $1.5 million Medicare fraud scheme.  They were ordered to pay $614,418 in restitution and Tcherniavsky was ordered to serve 51 months in prison.  The evidence at trial demonstrated that they paid illegal kickbacks to patient recruiters in exchange for patient referrals and paid kickbacks to physicians for fraudulent prescriptions—primarily for expensive, medically unnecessary power wheelchairs—which the defendants then used to support fraudulent bills to Medicare.  DOJ

January 15, 2016

The SEC awards more than $700,000 to a whistleblower described as a “company outsider.”  The SEC says that the whistleblower provided a “detailed analysis” of the wrongdoing that lead to a successful SEC enforcement action.  SEC

November 4, 2015

The SEC announced a whistleblower award totaling more than $325,000 for a former investment firm employee who tipped the agency with specific information that enabled enforcement staff to open an investigation and uncover the extent of the fraudulent activity.  The whistleblower waited until after leaving the firm to come forward to the SEC, however, and agency officials say the award could have been higher had this whistleblower not hesitated.  SEC

July 17, 2015

The SEC paid more than $3 million to a whistleblower whose “specific and detailed information comprehensively laid out the fraudulent scheme which otherwise would have been very difficult for investigators to detect.”  SEC

April 28, 2015

The SEC awarded $600,000 to a whistleblower who suffered “unique hardships, including retaliation” as a result of blowing the whistle on misconduct at hedge fund advisory firm Paradigm Capital Management.  It is the first time the SEC has made an award to a whistleblower in a retaliation case.  Whistleblower Insider

April 22, 2015

The SEC announced a whistleblower award of roughly $1.5 million to a compliance officer who had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.  This is the second award the SEC has made to an employee with internal audit or compliance responsibilities.  Whistleblower Insider

September 22, 2014

The SEC announced an expected whistleblower award of more than $30 million.  It will be the largest award to date under the SEC whistleblower program established in 2012 under the Dodd-Frank Act.  It surpasses the $14 million award the SEC made roughly a year ago.  The new award will also be the fourth award to a whistleblower living in a foreign country.  Whistleblower Insider