Top-20 False Claims Act and DOJ Fraud Settlements for 2014
By the C|C Whistleblower Lawyer Team
Here is our look-back at the top-20 False Claims Act and other DOJ fraud settlements for 2014.
20. OtisMed Corp. — The medical products manufacturer and its former CEO agreed to pay more than $80 million for distributing knee replacement surgery cutting guides (called the OtisKnee) after the Food and Drug Administration (FDA) had rejected their application for marketing clearance. Click here for more.
19. Community Health Systems — The Tennessee-based operator of acute care hospitals — the largest in the country with 206 affiliated hospitals in 29 states — agreed to pay $98 million to settle charges of billing the government for inpatient services that should have been billed as significantly less expensive outpatient or observation services. Click here for more.
18. Sallie Mae — The student loan giant and its former loan-servicing arm, Navient Solutions, agreed to pay nearly $100 million to settle charges of violating the Servicemembers Civil Relief Act (SCRA) by charging members of the military excessive interest rates and late fees on student loans. Click here for more.
17. Omnicare — The country’s leading provider of pharmaceuticals and pharmacy services to nursing homes agreed to pay $124 million to settle charges of offering improper financial incentives to skilled nursing facilities in return for their continued selection of Omnicare to supply drugs to their elderly Medicare and Medicaid patients. Click here for more.
16. Amedysis — Amedisys home health companies agreed to pay $150 million to settle charges of billing Medicare for nursing and therapy services not medically necessary or provided to patients who were not homebound, and by otherwise misrepresenting patients’ conditions to increase its Medicare payments. Click here for more.
15. Trinity Industries — A Texas jury rendered a $175 million verdict against the highway guardrail maker for selling the government a defective and dangerous highway guardrail system. The DOJ did not intervene in this False Claims Act case.
14. Endo Pharmaceuticals — Endo Pharmaceuticals and its parent Endo Health Solutions agreed to pay $192.7M to settle criminal and civil charges arising from Endo’s marketing of the prescription drug Lidoderm for uses not approved as safe and effective by the FDA. Click here for more.
13. US Bank — The bank agreed to pay $200 million to settle charges of knowingly originating and underwriting mortgage loans insured by the Federal Housing Administration (FHA) that did not meet applicable requirements. Click here for more.
12. Bank Leumi — The major Israeli international bank admitted liability and agreed to pay $270 million for conspiring to assist US taxpayers in preparing and presenting false tax returns to the Internal Revenue Service (IRS) by hiding income and assets in offshore bank accounts in Israel and elsewhere around the world. Click here for more.
11. Davita Healthcare Partners — The Denver-based provider of dialysis services agreed to pay more than $400 million to settle charges of paying kickbacks for patient referrals to its dialysis clinics. It is the largest ever False Claims Act settlement solely covering kickbacks in the healthcare industry. Click here for more.
10. Bridgestone Corp. — The company agreed to plead guilty and pay a $425 million criminal fine for its role in a conspiracy to fix prices of automotive anti-vibration rubber parts installed in cars sold in the US and elsewhere. Click here for more.
9. Supreme Group — Supreme Foodservice pleaded guilty and paid $288 million for overcharging the government on a contract to provide food and water to the US troops in Afghanistan. In addition, Supreme Group B.V. and several of its subsidiaries agreed to pay an additional $146 million to resolve a related civil lawsuit alleging false billings to the Department of Defense for fuel and transporting cargo to American soldiers in Afghanistan. Click here for more.
8. JPMorgan Chase — The bank agreed to pay $614 million to settle charges of knowingly originating and underwriting non-compliant mortgage loans submitted for insurance coverage and guarantees by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration and the Department of Veterans Affairs (VA). Click here for more.
7. SunTrust — The mortgage lending arm of SunTrust Bank agreed to pay $968 million to settle charges of mortgage origination, servicing, and foreclosure abuses brought by the Justice Department, Department of Housing and Urban Development (HUD), the Consumer Financial Protection Bureau, and virtually every state attorney general in the country. Click here for more.
6. Toyota — The Japanese car maker agreed to pay $1.2 billion to settle charges of criminal wire fraud for misleading consumers by concealing and making deceptive statements about two safety issues affecting its vehicles that caused a type of unintended acceleration. It is the largest penalty of its kind ever imposed on an automotive company. Click here for more.
5. Credit Suisse — The Swiss bank pled guilty to criminal charges of conspiring to help thousands of US taxpayers evade taxes and agreed to pay fines and restitution amounting to $2.6 billion. It is the first big bank to plead guilty to illegal activity since Drexel Burnham Lambert in 1989. Click here for more.
4. Kerr-McGee Corp. — Kerr-McGee and its parent Anadarko Petroleum agreed to pay $5.15 billion to settle charges the company fraudulently conveyed assets to evade liability for environmental clean-up at contaminated sites around the country. It is the DOJ’s largest environmental enforcement recovery on record. Click here for more.
3. Citigroup — The bank agreed to pay $7 billion to resolve government claims related to Citigroup’s packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS). The settlement includes a $4 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). Click here for more.
2. BNP Paribas — The French banking giant agreed to pay $8.9 billion and plead guilty to conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) by processing billions of dollars of transactions on behalf of Sudanese, Iranian and Cuban entities subject to U.S. economic sanctions. It is the first time a global bank has pleaded guilty to large-scale, systematic violations of U.S. economic sanctions. Click here for more.
1. Bank of America — The North Carolina based banking giant agreed to pay $16.65 billion to resolve federal and state mortgage fraud claims against the bank and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch. It was the largest civil settlement with a single entity in American history. And it included a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), the largest FIRREA penalty ever. Click here for more