Former Countrywide Financial Executive will Collect $57 in Mortgage Whistleblower Case

A former Countrywide Financial Corp. executive is set to receive $57 million for a whistleblower case against the firm.

The former executive’s testimony led a jury to find parent company Bank of America Corp. liable in July for fraud over slapdash mortgages the company sold. The current case involves allegations that Countrywide defrauded government-backed mortgage finance companies Fannie Mae and Freddie Mac by selling them loans that were not as substantial as the firm represented them to be. The process Countrywide used to sell the loans was technically referred to as “HSSL” (High Speed Swim Lane), earning the case the nickname the “Hustle.” In July, a New York federal judge ordered Bank of America to pay a penalty of $1.27 billion in connection with that case. The bank is currently appealing that decision, according to Reuters.

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Whistleblower Alleges Travel Promotion Entity Engaged in Kickback Schemes Fraud

The former vice president (VP) of operations for Brand USA has filed a lawsuit against the firm alleging that the travel promotion company engaged in “kickback schemes” through its Visit California and Visit Florida promotions, and others, as well as fraud.

The former VP alleges that Brand USA inked marketing agreements with partners that depended on the company to reimburse their donations to the firm at a minimum of 130 percent through advertising and services that supported partners’ existing ad campaigns and even the partners’ own advertising agencies in order to meet budgetary goals and qualify for more federal matching funds, according to Skift.com.

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Medtronic Makes Final Payment in $11.1 Million Settlement over Kickbacks Lawsuit

Medtronic made a final payment of $362,000 in the $11.1 million settlement of a lawsuit alleging that the company used illegal kickbacks to influence doctors to use its cardiac rhythm products. According to Mass Device, the whistleblower lawsuit was filed in 2009 by a former business development manager. According to the U.S. Justice Department, the whistleblower will receive approximately $1.7 million.

The lawsuit accused Medtronic of compensating physicians to speak at conferences and developing marking and business plans at no cost. The company even gave them free tickets to sporting events, restaurants and strip clubs, the suit alleges. The whistleblower is a former business development manager, according to Mass Device.

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National Whistleblower Appreciation Day Recognizes Whistleblower Contributions

Last year, by a unanimous resolution, the United States Senate declared July 30, 2013 “National Whistleblower Appreciation Day.”

The resolution was unanimous, according to the National Whistleblower Center, which also indicated that it “strongly supports” the move, which it described as historic. All Americans were asked to consider the huge contributions that whistleblowers have made to the country’s democracy and the costs and suffering whistleblowers have withstood.

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Whistleblower Cases Involving Allegations of Omnicare Swapping Scheme Settled for $124 Million

Omnicare, Inc., one of the largest pharmacy providers, has just agreed to a $124 million settlement to resolve whistleblower allegations regarding a swapping scam that involved below cost discounts and Medicare and Medicaid nursing home patients.

In late June, the Department of Justice announced that it settled with Omnicare, Inc. concerning two qui tam whistleblower cases involving allegations over kickbacks from discounts offered to skilled nursing homes for Medicare and Medicaid patients. The scheme was put in place to encourage facilities to choose Omnicare as their pharmacy provider.

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SEC Award: $875 Million to be Split Between Two Whistleblowers

The Securities and Exchange Commission (SEC) announced a whistleblower award of more than $875,000 to be equally split between two whistleblowers who provided tips and assistance to the agency.

The SEC’s whistleblower program was authorized by the Dodd-Frank Act and allows for the providing of financial rewards for what the SEC deems to be high-quality, original information that leads to an enforcement action by the SEC. At least $1 million in sanctions must occur, according to Corporate Crime Reporter, and awards to whistleblowers range from 10 to 30 percent of the total money collected. The SEC must protect whistleblower confidentiality and is prohibited from disclosing information that may directly, or indirectly, reveal the whistleblower’s identity.

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Whistleblower who Reported Contracting Violations Wins Retaliation Lawsuit

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A former employee at Canaveral National Seashore has won a whistleblower retaliation ruling against the U.S. Department of the Interior. According to Florida Today, the whistleblower alleged contracting violations, nepotism and other misconduct.

The whistleblower, a biological science technician at the park, filed the retaliation lawsuit in 2011. In December, a federal civil service judge in Atlanta ruled that she was subjected to assault, harassment and adverse personnel actions in retaliation for reporting contracting violations. The U.S. Merit Systems Protection Board ruling became final this month when the parks service decided not to appeal.

The whistleblower alleged in her lawsuit that park staff split $18,000 in construction into increments of $2,000 or less. Under federal procurement rules, single purchases are limited to $3,000 for supplies, $2,500 for services and $2,000 for construction. Purchases must be put out for competitive bid if these limits are exceeded. By making split purchases, the staff was able to hire vendors without competition in the construction of a storage facility and other work. Some of the work was given to relatives, the suit alleges.

The OIG found that two park employees violated federal policy and ethics rules in 2011. The employees circumvented procurement regulations by making the split purchases, the OIG found. The U.S. Assistant Attorney did not pursue criminal prosecution. The OIG also found that the superintendent of the park failed to address the whistleblower’s concerns, despite being aware of the allegations as early as May 2011.

Although the whistleblower retaliation suit has concluded, Florida Today reports that the park is again under federal scrutiny due to similar allegations of improper purchases. The whistleblower alleges that the park continued to engage in illegal procurement even after her 2011 complaint. This prompted a second investigation by the U.S. Department of Interior’s OIG. According to reports submitted to the OIG in October, the park staff continued to make split purchases in 2014 on roughly $25,000 in construction projects. The projects involved the demolition of a lifeguard building, sign modifications and screening, septic, roofing and other work.

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Whistleblower Lawsuit Accuses NantHealth of Fraud

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Whistleblower Lawsuit Accuses NantHealth of Fraud

Whistleblower Lawsuit Accuses NantHealth of Fraud


Health technology firm NantHealth is facing a lawsuit filed by two former executives alleging the company committed fraud. According to the New York Times, the wrongful-termination lawsuit was filed in a federal court in Panama City, Fla.

NantHealth’s system is meant to link patient information using different medical devices and pieces of hospital equipment. The company is owned by a billionaire surgeon and business entrepreneur whose business relationships have been scrutinized in the past. Over a decade ago, NYT reported that the surgeon headed a drug company with financial ties to Premier; the major purchaser of supplies for hospitals nationwide is not supposed to have such conflicts of interest.

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Arguments in Katrina Whistleblower Case Appeal Scheduled for February

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Whistleblower_Advisor_Arguments_Katrina_Whistleblower_Case_Appeal_for_FebruaryOral arguments have been scheduled for February in the 5th U.S. Circuit Court of Appeals in State Farm Fire and Casualty Co.’s appeal of an order that it pay legal fees and damages of $3 million in a whistleblower lawsuit. The jury found the insurer defrauded the government in a claim after Hurricane Katrina.

The case was brought in 2006 by Cori and Kerri Rigsby, sisters from Ocean Springs, Mississippi, who worked for an Alabama contractor that provided damages assessments to State Farm after the August 2005 hurricane, The Associated Press (AP) reports.
In 2013, a jury found that State Farm avoided covering a policyholder’s wind losses by categorizing it as water damage from the storm surge, which is covered by federal flood insurance.

The sisters pursued cases for a number of policyholders, but only one came to trial, the case of Thomas and Pamela McIntosh. The McIntoshes lost their Biloxi, Mississippi, home to the storm. The sisters allege State Farm defrauded the McIntoshes by manipulating engineers’ reports so claims could be denied, according to the AP. The Rigsbys also alleged that State Farm’s fraud against the National Flood Insurance Program was widespread along the Mississippi coast.

State Farm says it correctly assessed the McIntoshes’ damage and never instructed its adjusters to wrongly process claims as flood damage, nor did it withhold a report that showed the home had been destroyed by wind as the Rigbys alleged.

At State Farm’s direction, the flood insurance program paid the Macintoshes the policy limits of $250,000, the AP reports. State Farm initially paid the couple $36,000 for wind damage on a policy that provided more than $500,000 in coverage, according to court documents.

U.S. District Judge Halil S. Ozerden ordered State Farm to pay $750,000 in damages to the government. Under the federal False Claims Act, a whistleblower law dating back to the Civil War, individuals may sue on behalf of the government and receive a portion of funds recovered if the case is successful. If damages are upheld on appeal, the Rigsbys will each receive 15 percent of the $750,000 judgment, according to the AP.

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National Law Firm, Parker Waichman LLP, Seeks Increased Transparency and Ethics from the Pharmaceutical Industry in the New Year

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In the new year, Parker Waichman LLP hopes for increased testing, safety, and efficacy in the processes and promotions used by Big Pharma so that consumers may be confident that they are receiving safe and effective medications that were ethically developed, tested, and marketed.

Parker Waichman, a national law firm that has long been an advocate for victims of defective medications is urging the pharmaceutical industry, as we approach a new year, to step up the ways in which it develops, tests, inspects, and markets medications.

In the new year, Parker Waichman is seeking increased transparency and accountability from all drug makers, with the hope that patient welfare is made the key priority and placed before drug approval activities and profits.

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Whistleblowers Faced with Growing Retaliation

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Reports suggest that corporate whistleblowers are faced with increased retaliation, Corporate Counsel reports. The U.S. Chamber of Commerce has began an aggressive lobbying campaign against the False Claims Act, the law that allows whistleblowers to file lawsuits on behalf of the government when they have knowledge of wrongdoing.

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Fired Air Marshal’s Whistleblower Case Weighed by Supreme Court

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On Tuesday, most of the Supreme Court justices appeared to agree with a fired air marshal who blew the whistle on the Transportation Security Administration, The New York Times reports. The Court is weighing whether or not he is protected by federal whistleblower laws.

The air marshal was secretly briefed about a terrorist threat affecting long-distance flights in 2003. He was contacted via text message by the TSA two days later stating that the assignments were canceled in order to save on costs. He complained about this action to his superiors, saying that it posed a threat to the public. When no action was taken, he contacted a reporter for MSNBC. The travel policy was reversed as a result of the news coverage.

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