Whistleblower Settlement
Federal and state laws protect and rewards whistleblowers who report accurate information of fraud to the government. Individuals may receive up to 30 percent of the amount recovered.
Whistleblowers are essential in exposing corporate fraud and corruption. These individuals have shined a light on some of the largest corporate and government crimes—including Enron, Wells Fargo, and the Flint Water crisis—by reporting illegal behavior committed by organizations to the government.
The False Claims Act protects and rewards individuals who report accurate information of fraud to the government. Individuals are protected under law against retaliation, and in the event of a settlement or penalty, they are eligible for 15 to 25 percent of the amount recovered.
The U.S. Securities and Exchange Commission rewards even more: up to 30 percent of the recovered amount. In some cases, these rewards have resulted in multi-million dollar payments for whistleblowers.
If you need to report fraud, contact us for a free, confidential consultation. They will help determine if you are eligible for a lawsuit.
Tenet Healthcare (2016) — $84.4 Million
Whistleblower Ralph Williams helped uncover Tenet Healthcare’s kickback scheme in which they allegedly defrauded Medicare and Medicaid of $145 million. Mr. Williams was a former CFO at a Tenet-owned hospital in Monroe, Georgia.
The healthcare system paid kickbacks in exchange for patient referrals from Clinica de la Mama clinics. The clinics received up to $20,000 a month in exchange for referring women to Tenet-owned hospitals for labor and delivery. The lawsuit alleged that Clinica de la Mama clinics often misled women by telling them that these were the only hospitals that accepted Medicare and Medicaid.
Tenet paid $513 million in penalties for violating the Anti-Kickback Statute. Mr. Williams, who filed the claim under the False Claims Act, received $84.4 million for his contributions.
Monsanto (2016) — $22 Million
A former Monsanto executive exposed the company for misrepresenting their earnings for three years.
The whistleblower reported that the company didn’t report the costs of their Roundup rebate programs, which offered millions of dollars in rebates to retailers and distributors, but instead just reported revenue, misleading investors of the company’s earnings.
The whistleblower filed the claim under the Dodd Frank financial reform law, ultimately receiving $22 million—28 percent of the final $80 million settlement.
Novartis Pharmaceuticals (2015) — $66.4 Million
Novartis Pharmaceuticals paid $390 million to settle with the federal government and more than 40 states for a five-year kickback scheme with pharmacies. David Kester, a former sales manager with Novartis, filed a whistleblower claim under the False Claims Act and received a $66.4 million award for reporting the fraud.
Novartis allegedly paid kickbacks to pharmacies in exchange for them recommending various medications and encouraging Medicare and Medicaid patients to refill prescriptions. The company even had contests between pharmacies and kept scorecards on who could keep patients on certain medications for the longest.
DaVita (2015) — $135 Million
Dr. Alon Vainer and nurse Daniel Barbir filed a whistleblower lawsuit under the False Claims Act that uncovered DaVita Healthcare Partners’ Medicare fraud.
The company allegedly would throw out partially-used vials of medications, like the dialysis drug Venofer, but received government reimbursements for the full amount. They even relied on a computer program called “Snappy” to track their dosages. Allegedly these actions helped DaVita defraud Medicare of millions of dollars.
DaVita settled with authorities for $495 million. The whistleblower reward was not disclosed, but attorneys said they could receive up to $135 million for their contributions.
J.P. Morgan Chase (2014) — $63.9 Million
J.P. Morgan Chase paid $614 million to settle a whistleblower lawsuit filed by Keith Edwards, a former vice president of an insurance unit for J. P. Morgan Chase. The bank allegedly had the government unknowingly insure non-compliant home loans through the Department of Housing and Urban Development and the Department of Veterans Affairs.
Mr. Edwards received a $63.9 million reward for reporting the fraud.
Johnson & Johnson (2013) — $167.7 Million
Whistleblowers in Pennsylvania, Massachusetts, and California reported Johnson & Johnson’s illegal marketing and kickback scheme which ultimately resulted in the company paying $2.2 billion in penalties.
The company allegedly marketed some of their drugs for uses not approved by the FDA, and paid doctors and nursing homes to prescribe their medications.
Collectively, the whistleblowers earned $167.7 million. Joe Strom, a former employee of Johnson & Johnson subsidiary Scios, earned $28 million.
UBS (2012) — $104 Million
Because of the lawsuit’s publicity, 14,000 Americans joined a tax amnesty program, resulting in the government recovering more than $5 billion in unpaid taxes.
Bradley Birkenfeld received one of the largest individual whistleblower settlements ($104 million) for reporting his employer UBS to the U.S. treasury. The Swiss bank allegedly helped U.S. clients evade taxes by hiding their money in Swiss accounts.
The company paid $780 million in penalties and provided the government with information for 4,500 of their clients. But Birkenfeld's impact went even further. Because of the lawsuit’s publicity, 14,000 Americans joined a tax amnesty program, resulting in the government recovering more than $5 billion in unpaid taxes.
GlaxoSmithKline (2012) — $96 Million
In 2012, GlaxoSmithKline settled one of the largest lawsuits for healthcare fraud, paying $750 million in penalties.
Whistleblower Cheryl Eckard, a former global quality assurance manager for GlaxoSmithKline, reported contamination issues at the company’s largest manufacturing site located in Puerto Rico. The company allegedly violated FDA manufacturing standards and sold adulterated medication, including antibiotic ointment for babies, nausea drugs, depression drug Paxil CR, and diabetes drug Avandamet. The facility closed in 2009.
Ms. Eckard received $96 million for exposing GlaxoSmithKline’s healthcare fraud.
Abbott Laboratories (2012) — $84 Million
The company allegedly marketed Depakote to nursing homes for unapproved uses, including sedating agitated elderly patients suffering from dementia.
Four whistleblowers exposed Abbott Laboratories’ illegal drug marketing, resulting in a $1.6 billion settlement in 2012 with the U.S. government. The whistleblowers shared an $84 million reward.
The company allegedly marketed Depakote to nursing homes for unapproved uses, including sedating agitated elderly patients suffering from dementia. The drug was only approved by the FDA for patients suffering from epileptic seizures, migraines, and bipolar disorder.
Abbott confessed to having a special sales team specifically for the illegal promotion of Depakote to nursing homes as far back as 1998. The company allegedly discontinued a 1999 clinical trial on dementia patients because Depakote caused drowsiness, dehydration, and anorexia in participants. Despite these results, the company continued to illegally promote the drug to nursing homes.
Pfizer (2009) — $102 Million
Pfizer paid $2.3 billion in civil and criminal penalties for illegally promoting pain medication Bextra and 12 other drugs for non-FDA approved uses. Bextra was eventually pulled from the market because it increased the risk of heart attack and stroke in patients.
John Kopchinski, a former Pfizer sales rep, and five other whistleblowers reported Pfizer's crimes. Collectively they received $102 million, with Mr. Kopchinski receiving the bulk of the settlement—more than $51.5 million.
Merck (2008) — $69 Million
Dean Steinke, a district sales manager for Merck, blew the whistle on Merck’s Medicare and Medicaid fraud.
The company allegedly sold arthritis drug Vioxx and cholesterol drug Zocor at a 92% discounted rate to hospitals. When patients continued to take the pricey medications after being released, Merck didn’t extend the same discounted rate to Medicare and Medicaid. This cost the government millions of dollars in discounts.
The company settled in 2008, paying $650 million to authorities. Mr. Steinke received $69 million for his help exposing the fraud.
