Top Ten Whistleblower Awards of 2018
2018 was another banner year for whistleblowers. As the DOJ recently reported in its annual summary of False Claims Act recoveries, $2.1 billion of the $2.8 billion in settlements and judgments reported last year arose from lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $301 million in whistleblower awards to the individuals who exposed the fraud by filing these actions. In its press release announcing last year’s statistics, the government highlighted the critical role whistleblowers play in helping it root out fraud:
Whistleblowers have played a vital role in unmasking fraudulent schemes that might otherwise evade detection. The taxpayers owe a debt of gratitude to those who often put much on the line to expose such schemes.
This invaluable role of whistleblowers in the government enforcement scheme has been a consistent theme for years. And as shown from the listing below of Top-10 whistleblower awards, whistleblowers are being recognized not just under the whistleblower program of the False Claims Act. They are also securing financial rewards under the SEC program and CFTC program of the Dodd-Frank Act, and the various state False Claims Act programs. Please contact us if you would like more information on any of these programs or would like to speak with one of our experienced whistleblower lawyers.
- AmerisourceBergen – Several whistleblowers collectively received an award of $93 million from the $625 million pharmaceutical distributor AmerisourceBergen Corporation agreed to pay to resolve allegations it violated the False Claims Act through its repackaging and distributing of pre-filled syringes not approved for sale or use by the FDA.
- Merrill Lynch – Three whistleblowers shared an award of $83 million relating to the 2016 SEC settlement with Bank of America’s Merrill Lynch brokerage unit concerning the misuse of customer funds. Merrill Lynch paid $415 million to settle those charges, apparently admitting to misusing customer cash by holding up to $58 billion a day in a clearing account when it should have been held in reserve. This is the largest whistleblower reward to date under the SEC Whistleblower Program under the Dodd-Frank Act.
- Sprint – A whistleblower received an award of $62.7 million from the proceeds of the $330 million settlement cell phone carrier Sprint Communications, Inc. agreed to pay to resolve allegations it violated the New York False Claims Act by failing to collect and remit more than $100 million in state and local sales taxes owed on its flat-rate wireless calling plans sold to New Yorkers. It is the largest recovery under the New York statute and also the largest-ever recovery by a single state under any state false claims act.
- Anonymous SEC Whistleblowers – Two whistleblowers shared a SEC whistleblower award of $54 million relating to an undisclosed SEC settlement. Pursuant to the SEC’s strict whistleblower confidentiality provisions, neither the identities of the whistleblowers were revealed nor the subject of the SEC enforcement action.
- HMA – Multiple whistleblower will receive awards totaling tens of millions of dollars from more than $260 million Health Management Associates agreed to pay to resolve allegations it violated the False Claims Act by billing government health care programs for inpatient services that should have been billed as outpatient or observation services, paying kickbacks to physicians in return for patient referrals, and submitting inflated claims for emergency department facility fees.
- Anonymous CFTC Whistleblower – Multiple whistleblowers received CFTC awards totaling more than $45 million. Pursuant to the CFTC’s whistleblower confidentiality provisions, neither the identities of the whistleblowers were revealed nor the subject of the CFTC enforcement action. Christopher Ehrman, Director of the CFTC’s Whistleblower Office stated “the sheer magnitude of the $45 million in monetary awards announced  demonstrates the game-changing nature of the Whistleblower Program.”
- JP Morgan – A whistleblower received a CFTC award of $30 million. Pursuant to the CFTC’s whistleblower confidentiality provisions, the CFTC did not identify the whistleblowers or the subject of the CFTC enforcement action, other sources reported that the award related to a 2015 settlement with JPMorgan Chase for that banks’ failure to disclose that it was directing certain wealthy clients into investments that would be profitable for the bank.
- BP Energy – Whistleblower Christopher J. Schroen received a reported $27 million from the $102 million BP agreed to pay to resolve allegations it violated the California False Claims Act by overcharging the state for natural gas it had purchased under three successive contracts.
- Prime Healthcare – A whistleblower received an award of roughly $17 million from the $65 million Prime Healthcare and its founder and CEO agreed to pay to resolve allegations they violated the False Claims Act through 14 Prime hospitals admitting patients who required only less costly, outpatient care and by billing for more expensive patient diagnoses than the patients had (a practice known as “up-coding”).
- Harbinger Capital – A whistleblower will receive an award of $15.4 million from the $30 million Harbinger Capital Partners Offshore Manager LLC agreed to pay to resolve allegations it violated the New York False Claims Act by knowingly evading New York State and New York City taxes. In announcing the settlement, the government highlighted that the “New York False Claims Act, which expressly covers tax fraud, provides a powerful tool for government to use to compel tax law compliance.” New York is one of the few states that includes tax fraud within its false claims act.
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