Whistleblower Rewards

March 27, 2023

Laboratory Corporation of America (“Labcorp”) has agreed to pay $2.1 million to settle a lawsuit by former employee Donna Hecker-Gross, who alleged that Labcorp overbilled the Department of Defense for genetic tests performed by a third party.  Under a 2012 contract, Labcorp was to perform laboratory testing for military treatment facilities worldwide, but certain specialized tests would be performed by subcontractor GeneDx.  However, when billing the Department of Defense for tests performed by GeneDx, LabCorp allegedly overcharged for them, double or triple billed for them, or billed for them even in the absence of evidence the tests were ever performed.  For initiating a successful enforcement action, Hecker-Gross will receive a $357,000 relator’s share.  USAO MD

February 13, 2023

Spacelabs Healthcare, LLC has agreed to pay $2.5 million to settle claims of violating the False Claims Act by overcharging the Department of Veteran Affairs and Department of Defense between 2014 and 2019.  According to a qui tam suit filed by two former Spacelabs employees, Marci Gebhardt and Christopher Kelley, the company agreed to contract clauses in which they would sell patient monitoring equipment to the government at lower rates.  However, Spacelabs then failed to comply when billing the VA and Defense Logistics Agency.  For their role in bringing a successful enforcement action, Gebhardt and Kelley will share in a $437,500 reward.  DOJ

January 24, 2023

The SEC has awarded more than $28 million to a pair of whistleblowers whose information and assistance prompted the SEC to launch an investigation and enable the return of millions of dollars to harmed investors.  These actions ultimately led to a successful enforcement action.  SEC

January 20, 2023

DePuy Synthes, Inc., a subsidiary of Johnson & Johnson that manufactures medical devices, has agreed to pay $9.75 million to resolve allegations of defrauding Medicare and Medicaid.  According to former sales representative Aleksej Gusakovs, DePuy gave a Massachusetts-based orthopedic surgeon thousands of dollars’ worth of free implants and instruments for use in overseas surgeries.  The illegal kickbacks induced the surgeon to use DePuy products in surgeries performed in the United States, and caused false claims to be submitted to Medicare and the Massachusetts Medicaid program.  As the whistleblower in a successful qui tam action, Gusakovs will receive a $1.37 million share of the settlement.  DOJ

January 19, 2023

The SEC has awarded approximately $18 million to a trio of whistleblowers whose information contributed to a successful enforcement action.  The first whistleblower’s detailed and significant information also led the agency to open an investigation and saved considerable staff time and resources.  SEC

January 13, 2023

The SEC has awarded more than $5 million to a whistleblower who first reported internally, and whose subsequent tip to the agency helped shape its investigation.  Based on the whistleblower’s information, agency staff were able to identify witnesses and effectively draft document and information requests.  SEC

December 20, 2022

Cochlear implant manufacturer Advanced Bionics LLC paid $11.4 million to resolve claims brought in a whistleblower action that the company falsely stated that the radio-frequency (RF) emissions generated by some of its cochlear implant processors met international standards when it submitted pre-market approval applications to the FDA.  The company allegedly knew that the devices did not meet standards, and manipulated testing conditions to obtain passing test results.  Whistleblower David Nyberg, a former engineer at Advanced Bionics, will receive a qui tam award of $1.9 million from the federal amount of the settlement.  DOJ; USAO ED PA

December 20, 2022

BioTelemetry Inc. and its subsidiary CardioNet LLC, which provide cardiac monitoring services (including Holter and mobile cardiovascular telemetry (MCT) tests), will pay $44.875 million to resolve claims that they submitted false claims to federal healthcare programs for cardiac monitoring services that were improperly performed overseas and by unqualified technicians.  CardioNet used an India-based contractor to perform diagnostic and analysis services of heart monitoring data, and while it had a formal policy of sending such data for federal healthcare beneficiaries to a U.S.-based independent diagnostic testing facility for review and analysis, in fact, substantial amounts of such data was sent to its Indian contractor.  The government further alleged that most of the offshore technicians tasked with reviewing ECG Data for federal healthcare program beneficiaries did not have the basic qualifications to perform the tests in question. The government’s investigation was initiated by a qui tam action filed by former CardioNet employees Christopher Strasinski and Philip Leone, who will share a whistleblower award of approximately $8.3 million.  DOJ; USAO ED PA