Constantine Cannon Whistleblower Practice Group 2021 Roundup: Another Banner Year

2021 was another banner year for Constantine Cannon’s whistleblower practice group, with three historic whistleblower successes, including the first-ever award under the Motor Vehicle Safety Whistleblower Act.

This string of successes follows the firm’s record-shattering 2020 year where our whistleblower team secured blockbuster settlements that recovered more than $600 million for the government and roughly $115 million for our whistleblower clients.  It also follows the firm’s Practice Group of the Year recognition by Law360, the first time a whistleblower practice group received such an accolade.

The highlights for 2021 include three key victories—one under the Motor Vehicle Safety Whistleblower Act, one under the False Claims Act, and one under the SEC Whistleblower Program.  Together, they brought in more than $300 million for the government and more than $45 million for our whistleblower clients.  These results recognize the courage of our clients and years of hard work by our experienced legal team.

Auto Safety – Hyundai and Kia: A $210 Million Settlement and a $24.3 Million Whistleblower Award (November 2021)

In the first-ever whistleblower award under the Motor Vehicle Safety Whistleblower Act, the U.S. National Highway Traffic Safety Administration (NHTSA) awarded $24.3 million to Constantine Cannon client Gwang Ho Kim, the former Hyundai safety engineer who reported safety defects in millions of Hyundai and Kia vehicles.

Mr. Kim provided evidence the carmakers hid from regulators a critical engine defect that caused vehicles to stall at high speeds and catch fire.  Based on this evidence, NHTSA found Hyundai and Kia delayed in recalling over 1.6 million vehicles and provided inaccurate information to regulators about the defects.  The agency imposed penalties of $210 million, the largest NHTSA ever assessed against a carmaker.

Read more on Mr. Kim’s whistleblower journey here.

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Risk Adjustment Fraud – Sutter Health: A $90 Million Settlement and a $21 Million Whistleblower Award (August 2021)

Constantine Cannon, together with co-counsel Keller Grover and Kleiman Rajaram, secured a landmark $90 million False Claims Act settlement with Sutter Health on behalf of their whistleblower client over allegations that Sutter defrauded the government’s Medicare Advantage program (Medicare Part C).

Our client was a former Sutter risk adjustment compliance manager.  According to her Complaint, Sutter manipulated patient records, ignored audit “red flags,” and engaged in other misconduct to increase patient risk scores to obtain inflated Medicare Advantage payments.  In Spring 2019, the Government intervened in the portion of our case relating to one Sutter affiliate, and we continued to pursue our client’s claims against the other affiliates.

The settlement is the largest False Claims Act settlement against a hospital system involving allegations of fraud on the Medicare Advantage program and the second largest Medicare Advantage fraud settlement reported to date.  Our client received a whistleblower award of roughly $21 million from the proceeds of the Government’s recovery.

Read more on this groundbreaking settlement here.

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SEC Whistleblower Program – ITG Dark Pools: A 30% Whistleblower Award (May 2021)

Constantine Cannon secured another multi-million dollar whistleblower award, this one under the SEC Whistleblower Program, for an anonymous whistleblower whose original information and assistance led to the SEC’s recovery from brokerage firm ITG Inc.  The SEC has repeatedly fined ITG in recent years, including for violations related to the firm’s dark pool, POSIT.  A dark pool is an alternate trading system that is supposed to allow investors to place buy and sell orders without alerting predatory traders who can manipulate prices.  ITG told its customers that they could trade in POSIT anonymously and confidentially, but the SEC twice concluded this was false.  The SEC awarded our client 30 percent of its recovery, the maximum amount allowed under the SEC Whistleblower Program.

Read more on this SEC settlement here.

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Another Notable Success

Constantine Cannon also represented Theranos whistleblower Tyler Shultz, one of the central figures in John Carreyrou’s bestseller “Bad Blood,” which broke the story of this Enron-style fraud and documented the rise and fall of the multibillion-dollar startup.  Shultz was one of Carreyrou’s most important and early sources, revealing that the high-flying Theranos startup, which claimed to have invented a machine that would run hundreds of blood tests with a single drop of blood, was a fraud.

As a result of events Shultz largely set in motion, the government indicted two of Theranos’ most senior executives, its founder Elizabeth Holmes and CEO Sunny Balwani.  Late last year, Holmes was convicted of four counts of fraud and conspiracy, and now faces a long prison term. The verdict is a ringing vindication of Shultz’s whistleblower efforts, which likely saved many patients who might have suffered serious harm by relying on Theranos’ questionable blood tests.

Looking Forward

These successes are but a small sampling of the groundbreaking work and results that Constantine Cannon’s whistleblower team has achieved over the past decade.  This includes our unparalleled track record of achieving the maximum possible awards for our clients.  Those awards totaled roughly $150 million in the past two years alone.

Our successes in 2021 also offer a prelude to what we hope to accomplish in the years to come.  Areas we are paying particularly close attention to include money laundering, cybersecurity fraud, cryptocurrency fraud, and Medicare Advantage (or risk adjustment/managed care) fraud.  The government has stressed these are all high-priority enforcement areas.

The Department of Justice has highlighted its enforcement efforts in Medicare Advantage fraud, and following our success against Sutter Health, we are especially focused on risk adjustment cases, with several pending matters in which the government has intervened, including actions against Independent Health Association, Kaiser Permanente, and in one of the largest risk adjustment matters ever, against UnitedHealth Group.

Since Constantine Cannon launched its whistleblower practice roughly a decade ago, the firm has emerged as among the largest and most successful whistleblower firms in the world, with more than 20 full-time whistleblower lawyers in offices in New York, Washington, San Francisco, and London.

The firm continues to grow not only in size and success, but in the scope of the whistleblower matters it handles and the international reach of the clients it represents.  Whether representing whistleblowers, antitrust clients, or clients in our other specialty practice areas, the firm is committed to working in the public interest.

With many dozens of promising cases on our docket, the firm’s steep trajectory of success is likely to continue.  We look forward to continuing our whistleblower work for many years to come.

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• The Constantine Cannon Whistleblower Practice Group
• Our Whistleblower Team
• Our Whistleblower Successes

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