Whistleblower News From The Inside -- January 9, 2017

By the C|C Whistleblower Lawyer Team

FBI Arrests Volkswagen Executive on Conspiracy Charge in Emissions Scandal – The FBI arrested Oliver Schmidt, a former top emissions compliance manager for Volkswagen in the United States, on a charge of conspiracy to defraud the United States. The arrest and charge comes in light of the United States Department of Justice’s continuing investigation into Volkswagen emissions cheating. Mr. Schmidt is accused of playing a key role in deceiving government regulators by “offering reasons for the discrepancy other than the fact that VW was intentionally cheating on U.S. emissions tests in order to allow VW to continue to sell diesel vehicles in the United States.”  NYT

Penn State Abuse Scandal Costs Approach a Quarter-Billion – Penn State’s costs related to the Jerry Sandusky child abuse scandal have reached at least $237 million. These costs include a recent $12 million verdict in the whistleblower and defamation case brought by former assistant coach Mike McQueary who initially brought forward the information regarding the scandal and whose testimony helped convict Sandusky in 2012. The $237 million also covers a $48 million fine from the NCAA and a $2.4 million federal fine. Penn State’s insurers have thus far covered $30 million in costs.  Wash. Post

U.S. Supreme Court Ends 18 Year Long False Claims Act Case in Favor of MWI – One of the longest running False Claims Act cases in its history came to an end after 18 years and 136 days when the United States Supreme Court denied relator’s petition for certiorari thereby granting a judgment in favor of Moving Water Industries (“MWI”). The case dates back to 1998 when a former MWI employee alleged violations of “regular commission” rules in transactions between MWI and Nigerian states financed by the Export-Import Bank.  PR Newswire

Whistleblower Case Against Express Scripts Dismissed – A federal judge in Delaware has dismissed a whistleblower lawsuit accusing Medco Health Solutions of taking kickbacks from AstraZeneca to promote its drugs. The judge ruled that the lawsuit must be dismissed because a similar whistleblower lawsuit targeting AstraZeneca was pending in 2011 when this case filed and an additional pair of earlier whistleblower cases against both Medco and AstraZeneca disclosed the alleged scheme.  Reuters

Grandma Rips off Medicare, Skips Town – A 49 year old grandmother allegedly involved in a $17 million Medicare fraud scheme allegedly fled to Cuba to evade charges after being granted a delay surrender to attend her grandson’s birth. Dora Robaina allegedly participated in a pharmaceutical fraud scheme in Miami that allowed the ringleader to make as much as $17 million off of Medicare. The Miami FBI field office estimates that over 160 defendants are on the lam from active Medicare fraud cases in South Florida. Robaina had already served two years in prison on a previous Medicare fraud charge in 2005.  Miami Herald

Rogue Surgeon to be Sentenced – Prosecutors are recommending 19 years in prison for a Detroit-area doctor that has pleaded guilty to conspiracy and fraud. Dr. Aria Sabit is alleged to have performed surgeries on patients that were unnecessary or poorly performed. Sabit admitted that he was receiving kickbacks for using certain implants in California and that he committed fraud against insurers and patients while working as a neurosurgeon in the Detroit area. Prosecutors have compared Sabit to Dr. Farid Fata who gave unnecessary or excessive cancer treatments to patients and is serving a 45 year prison sentence. Sabit is slated to be sentenced today.  WLUC