Whistleblower Rewards

May 26, 2017

Kuwaiti-based Agility Public Warehousing Co. KSC agreed to globally resolve criminal, civil, and administrative cases arising from allegations that it overcharged the United States when performing contracts with the Department of Defense to supply food for U.S. troops from 2003 through 2010.  As part of the settlement, Agility agreed to pay $95 million to resolve civil fraud claims, to forgo administrative claims against the United States seeking $249 million in additional payments under its military food contracts, and to plead guilty to a criminal misdemeanor offense for theft of government funds.  According to the government, Agility overcharged the DOD for locally available fresh fruits and vegetables that Agility purchased through the Sultan Center Food Products Company, K.S.C. (TSC).  Agility charged the full amount of TSC’s invoices despite agreeing with TSC it would pay 10 percent less than the amount billed.  The government further alleged Agility failed to disclose and pass through rebates and discounts it obtained from U.S.-based suppliers. The allegations originated in a whistleblower lawsuit filed against Agility and TSC under the qui tam provisions of the False Claims Act by Kamal Mustafa Al-Sultan, a former vendor of Agility.  Mr. Al-Sultan will receive a whistleblower award of $38.85 million from the proceeds of the government's recovery. DOJ

May 18, 2017

Missouri health care providers Mercy Hospital Springfield and its affiliate Mercy Clinic Springfield Communities agreed to pay $34 million to settle charges they violated the False Claims Act by engaging in improper financial relationships with referring physicians.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Mercy physician Dr. Viran Roger Holden.  Dr. Holden will receive a whistleblower award of $5,440,000 from the proceeds of the government's recovery. DOJ

May 16, 2017

Austin-based Financial Freedom agreed to pay more than $89 million to resolve charges it violated the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) in connection with its participation in a federally insured Home Equity Conversion Mortgages or "reverse mortgage" program.  According to the government, Financial Freedom sought to obtain insurance payments for interest from the Federal Housing Administration despite failing to properly disclose the mortgagee was not eligible for such interest payments because it had failed to meet various deadlines relating to appraisal of the property, submission of claims to HUD, and pursuit of foreclosure proceedings.  The allegations originated in a whistleblower declaration filed pursuant to FIRREA by Sandra Jolley, a consultant for the estates of borrowers who took out HECM loans.  She will receive a whistleblower award of $1.6 million from the proceeds of the government's recovery. DOJ

May 16, 2017

Omnicare Inc. agreed to pay $8 million to settle charges it violated the False Claims Act by submitting claims for generic drugs different from those actually dispensed to Medicare and Medicaid beneficiaries.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Elizabeth Corsi and Christopher Ezzie.  They will receive a whistleblower award of more than $2 million from the proceeds of the government's recovery. DOJ (DNJ)

May 11, 2017

Benefits management company Carecore National LLC agreed to pay $54 million to settle charges of violating the False Claims Act by submitting Medicare and Medicaid claims for medical diagnostic procedures without properly assessing whether they were necessary or reasonable.  CareCore provides utilization management services including determinations of medical necessity to New York Medicaid Managed Care Organizations (MCOs). The agreement settles allegations that CareCore instituted a scheme to auto-approve or “Process As Directed” (“PAD”) hundreds of radiology service requests on a daily basis, deeming those diagnostic services as reasonable and medically necessary, even though there had been no evaluation of those cases by the appropriate medical personnel. Of the $54 million, $18 million will go to 20 state Medicaid programs. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery. DOJ (SDNY); NY, FL

May 9, 2017

California-based radiation therapy center Valley Tumor Medical Group agreed to pay $3 million to resolve allegations it submitted fraudulent bills over a nearly 10-year period to three government-run healthcare programs for unsupervised radiation oncology services.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Valley Tumor employee Jared Shindler.  He will received a whistleblower award of $555,000 from the proceeds of the government's recovery. DOJ (CDCA)

May 2, 2017

The Securities and Exchange Commission today announced that a company insider has earned a whistleblower award of more than $500,000 for reporting information that prompted an SEC investigation into well-hidden misconduct that resulted in an SEC enforcement action. “This company employee saw something wrong and did the right thing by reporting what turned out to be hard-to-detect violations of the securities laws,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.  “Company insiders are in a unique position to provide specific information that allows us to better protect investors and the marketplace.  We encourage insiders with information to bring it to our attention.” The whistleblower award is the second announced by the SEC in the past week.  Approximately $154 million has now been awarded to 44 whistleblowers who voluntarily provided the SEC with original and useful information that led to a successful enforcement action. SEC

April 25, 2017

The Securities and Exchange Commission today announced an award of nearly $4 million to a whistleblower who tipped the agency with detailed and specific information about serious misconduct and provided additional assistance during the ensuing investigation, including industry-specific knowledge and expertise. “Not only did this whistleblower step forward and report suspicious conduct, but continued to help after we opened our investigation,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.  “Whistleblowers with specialized experience or expertise can help us expend fewer resources in our investigations and bring enforcement actions more efficiently.” Approximately $153 million has now been awarded to 43 whistleblowers who became eligible for an award after voluntarily providing the SEC with original and useful information that led to successful enforcement actions. SEC enforcement actions from whistleblower tips have resulted in more than $953 million in financial remedies against wrongdoers. SEC

May 2, 2017

North Carolina-based Piedmont Pathology agreed to pay $601,000 to settle allegations it violated the False Claims Act by submitting false claims to Medicare and Medicaid for medically unnecessary procedures. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Piedmont pathologist Dr. Kim Geisinger. She will receive a whistleblower award of roughly $120,000. DOJ (WDNC)

May 1, 2017

Memphis-based Poplar Healthcare PLLC and Poplar Healthcare Management, LLC agreed to pay $897,640 to resolve allegations they violated the False Claims Act by billing the government directly and through a subsidiary known as GI Pathology for diagnostic tests not medically necessary. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Poplar pathologist Gordon Wang. He will receive a whistleblower award of roughly $206,000 from the proceeds of the government's recovery. DOJ (DRI)