Whistleblower Rewards
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March 7, 2022
Pharmaceutical company Mallinckrodt ARD LLC will pay $260 million to resolve allegations that it violated the False Claims Act in the sale and marketing of its drug H.P. Acthar Gel. The government intervened in whistleblower actions alleging that Mallinckrodt and its predecessor Questcor Pharmaceuticals Inc. knowingly underpaid state Medicaid programs by improperly calculating amounts it owed under the Medicaid Drug Rebate Program, and unlawfully used a foundation as a conduit to subsidize co-payments. With respect to the Medicaid rebate claims, which represent $234.7 million of the settlement, defendants were alleged to have calculated rebate amounts as if Acthar was a “new drug” first marketed in 2013, rather than a drug that had been approved since 1952. By using 2013 for Acthar’s Base Date Average Manufacturer Price (AMP), the company ignored price increases prior to 2013 and fraudulently reduced Acthar drug rebates. With respect to the copayment fraud claims, which represent $26.3 million of the settlement, defendants were alleged to have violated the Anti-Kickback Statute by subsidizing copayments through payments to three funds that Mallinckrodt had a foundation set up to induce Medicare-reimbursed purchases of Acthar, using the subsidies to counteract doctor and patient concerns about the drug’s high cost. The whistleblower in the Medicaid rebate case, James Landolt will receive an award of $24.7 million, representing 20% of the $123.6 million federal share of that settlement; the relator’s share for the state share of the settlement was not announced. The whistleblowers in the copayment case, Charles Strunck and Lisa Pratta, will receive an award of $4.9 million, representing 19% of that settlement. The settlement includes a five-year corporate integrity agreement (CIA) with monitoring provisions. DOJ; USAO MA; USAO EDPAFebruary 23, 2022
TriMark USA, LLC and related entities will pay $48.5 million to resolve claims brought in a whistleblower lawsuit alleging that they improperly manipulated federal contract set-asides for service-disabled, veteran-owned small businesses (SDVOSB) by enlisting small business to secure the contracts while TriMark actually performed all of the work and received most of the benefits of the federal contract. In addition, former TriMark executive Kimberley Rimsza has agreed to pay $100,000 to resolve claims against her. The whistleblower, Fox Unlimited Enterprises, LLP, will receive an award of $10.9 million. USAO ND NY; USAO ED WAFebruary 11, 2022
Transportation company Academy Bus, LLC, together with related entities and individuals, will pay $20.5 million to resolve claims brought in a whistleblower lawsuit under New Jersey’s False Claims Act that the defendants defrauded New Jersey Transit, for whom defendants operated bus routes. Defendants were paid by NJ Transit based, in part, on miles and hours driven, with deductions for missed bus trips; they were alleged to have over-reported miles and hours driven, and underreported their missed bus trips to the state. The settlement also required Academy to implement specific compliance procedures. The whistleblower, former Academy employee Hector Peralta, will receive an award totaling $3.9 million. NJJanuary 31, 2022
Cardinal Health agreed to pay more than $13 Million to settle allegations it violated the Anti-Kickback Statute and False Claims Act by paying “upfront discounts” to its physician practices. According to the government, Cardinal Health recruited new customers by offering and paying cash bonuses that were not attributable to identifiable sales or were purported rebates which Cardinal Health’s customers had not actually earned. In connection with the settlement, the whistleblowers who brought the case will receive approximately $2.6 million of the recovery. USAO MAJanuary 21, 2022
A whistleblower received an award of $1.5 million, with the SEC finding that the individual voluntarily provided new and original information as well as substantial assistance during the course of the government’s investigation. The information helped Commission staff formulate their investigative strategy, saved government time and resources, and significantly contributed to the success of a government investigation. SECJanuary 21, 2022
A whistleblower received an award of $1.8 million, with the SEC finding that the individual voluntarily provided original information that led the SEC to open an investigation that was directly based on the whistleblower’s information. The SEC further noted that the individual had also reported the misconduct internally in a timely manner, had suffered hardship as a result of reporting, and had provided substantial ongoing assistance during the government’s investigation. SECJanuary 21, 2022
Two unidentified whistleblowers were jointly awarded $37 million based on findings that they voluntarily provided key evidence to the government, which significantly contributed to the government’s understanding of the underlying wrong, and provided ongoing assistance during the government’s investigation. The award is based on amounts recovered in a successful enforcement action by the SEC, as well as a separate related action by a different, unidentified, agency. SECJanuary 10, 2022
The SEC has issued two awards totaling more than $4 million to three whistleblowers whose information and assistance helped bring about two successful enforcement actions. In the first order, a single whistleblower who reported internally before providing significant new information to the agency on an existing investigation was awarded $2.6 million. According to the SEC, the misconduct occurred overseas and would have been difficult to detect without the whistleblower’s tip. In the second order, two whistleblowers received a joint award of $1.5 million for providing substantial ongoing assistance. SECTop Ten Whistleblower Awards of 2021
Posted 01/6/22
