The Whistleblower Cases

Blowing the Whistle About Fraud in The Finance Sector

In spite of a legal framework that vows to encourage transparency, securities and commodities trading fraud are rampant in the U.S. In order to deter fraudsters and protect investors, the Securities and Exchange Commission and the Commodity Futures Trading Commission have both established whistleblower programs.

In the wake of the 2008 crisis, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act enhancing the CFTC’s “regulatory authority to oversee the more than $400 trillion swaps market,” and allowing the SEC to exert more control over financial products and corporate governance and disclosure, improving consumer protections and transparency.

Dodd-Frank also gave rise to the above-mentioned whistleblower programs. The 2010 Act established that the CFTC would pay an award to eligible whistleblowers “who voluntarily provide the Commission with original information about a violation of the CEA that leads to the successful enforcement of a covered judicial or administrative action, or a related action.” On the other hand, retaliation against tipsters who provide information about potential violations is strictly forbidden....

What Makes a Successful Whistleblower? The SEC and CFTC whistleblower programs were created to encourage insiders to come forward with original information that can lead to enforcement actions against unethical financial industry players.
By offering rewards to tipsters, the programs help protect investors and other potential victims of financial fraud. The agency’s whistleblower provisions, the SEC states, help “better preserve the integrity of the United States' capital...

Duke University has agreed to pay $112.5 million to resolve allegations that it submitted fake scientific data to the government to secure research grants.

The alleged misconduct was brought forward in a whistleblower lawsuit filed by former Duke laboratory analyst Joseph Thomas. Under the False Claims Act, for his part in recovering misappropriated taxpayer funds, Thomas will receive a $33.75 million reward.

According to the suit filed by Thomas, a Duke researcher submitted bogus data as part of a series of grant applications, which resulted in lucrative financial aid from the government.

The research projects in question involved studying respiratory functions in mice. The complaint states that Duke researchers submitted false data to federal agencies, thus misrepresenting the results of their work....

According to a report released by the DOJ in December 2018, False Claims Acts cases led to $2.88 billion in recoveries during the last fiscal year. A staggering 84 percent of them were initiated by whistleblowers, leading to 73 percent of the total of settlements and judgments, and amounting to $2.044 billion. As a result of these successful lawsuits, FCA whistleblowers received a total of $301 million in awards in 2018.

Nearly 9 out of every 10 cases filed during 2018 were related to healthcare fraud. The top recoveries from fraudsters in the sector included $625 million from AmerisourceBergen Corp., which allegedly, illegally repackaged cancer medication, deriving hundreds of millions in profits. A handful of massive settlements, five to be exact, including the one with AmerisourceBergen amounted to $1.5 billion of the total recoveries.

The largest healthcare fraud recoveries also included a $360 Million settlement with drug maker Actelion over kickbacks, one with Insys over opioid kickbacks, amounting to $150; another one, of $260 million, with hospital chain Health Management Associates over kickbacks and fraudulent billing; and one amounting to $270 million, paid by Medicare Advantage provider HealthCare Partners Holdings, for defrauding the program....

Florida-based attorney John Uustal just announced he is offering up to $100,000 to the first person who comes forward with proof of “a secret conspiracy to create frivolous lawsuits.”

Uustal is a trial lawyer and author, famous for holding massive corporations responsible for their misconduct. The list of corporate titans he has successfully brought to justice includes the likes of Philip Morris, Toyota, and General Motors.

To Cheese or Not to Cheese

Uustal’s initiative was prompted by a recent class action initiative filed in Florida. In what some prominent legal professionals are referring to as “a BS lawsuit,” two McDonald’s customers are accusing the company of illegally charging for cheese.

Suing McDonald’s, “because it charges the same price for a Quarter Pounder with cheese and without cheese,” has made some people wonder whether there might be “a secret plot by big corporations to manufacture dumb lawsuits.”...

Do you have inside knowledge of fraud or false claims against the government? You could be in for a big cash award. America’s whistleblowers earned more than $392 million in fiscal year 2017 for helping the U.S. government reclaim $3.4 billion in stolen or misappropriated funds.
According to the Justice Department’s Civil Division, whistleblowers filed a total of 669 qui tam suits in 2017 – more than 12 cases per week on average. Over the past 31 years, whistleblowers...