Whistleblower Rewards

March 9, 2021

The SEC will pay $1.5 million to an unidentified whistleblower who provided original information to the Commission regarding the whistleblower’s employer, causing them to open an investigation.  The whistleblower provided detailed written information, identified potential witnesses, and assisted throughout the investigation.  SEC

March 2, 2021

Hedge fund manager Thomas E. Sandell has paid $105 million to resolve claims first brought by a whistleblower under the New York False Claims Act alleging that Sandell evaded tens of millions in state and local taxes by falsely claiming that $450 million in management and performance fees he recognized in 2017 were not earned for services performed in New York, despite the fact that his fund, Sandell Asset Management Corporation, operated in New York and represented to the SEC that New York City was its principal place of business.  In his effort to evade NY taxes, Sandell moved to London for a period of time, opened an office in Florida, and managed SAMC expenses through a shell company that he also owned and controlled, all while continuing to perform the investment services that generated the fee income in New York.  When Sandell’s accountant informed him that he would have to pay NY state taxes, he terminated them and retained a firm that took his preferred position.  The whistleblower will receive an award of $22.05 million, which is 21% of the government’s recovery. NY

March 1, 2021

The SEC has granted two whistleblowers a $500,000 award for providing tips on an ongoing fraud.  The whistleblowers’ substantial assistance led to multiple SEC actions, as well as a related action from another government agency.  SEC

February 25, 2021

The SEC has awarded two whistleblowers two awards totaling more than $1.7 million.  Under the first award, one whistleblower received over $900,000 for providing significant evidence, including a critical declaration, that helped shut down an ongoing fraud scheme.  Under the second award, the whistleblower received over $800,000 for providing important information through an interview and documents that helped return millions to harmed investors.  SEC

February 25, 2021

Texas Center for Orthopedic and Spinal Disorders and its owner, osteopath Mark Kuper, have agreed to a judgment of $11.2 million to resolve claims arising from their fraudulent billing of government healthcare programs.  Kuper also pleaded guilty to healthcare fraud, and was sentenced to 10 years in prison.  Defendants admitted that they submitted claims for services that were never rendered, including claims for one-on-one physical therapy pursuant to an individualized plan of care, when patients were actually attending group sessions with an athletic trainer, and claims for 60-minute psychotherapy sessions when patients actually spoke with unqualified individuals for just 15-20 minutes.  In addition, Kuper permitted his wife to use his credentials to issue prescriptions for controlled substances.  The civil investigation was initiated by a qui tam complaint filed by Richard Brown, who will receive 17% of the government’s recovery.  USAO ND TX

February 23, 2021

A previous SEC award recipient has been awarded another $9.2 million for contributing to successful related actions arising from the same information.  After receiving the whistleblower’s tip from the SEC, the DOJ was able to bring about additional actions, including a non-prosecution agreement or deferred prosecution agreement.  SEC

February 19, 2021

The SEC has awarded two whistleblowers a total of almost $3 million for alerting the agency to misconduct.  The first award of over $2.2 million went to an individual whose information helped bring a successful enforcement action to an open investigation.  The second award of almost $700,000 went to an individual whose tip about a fraudulent reporting scheme helped launch an investigation.  SEC