In U.S. v. Alderson, 686 F.3d 791 (9th Cir. July 18, 2012), a case of first impression, the Ninth Circuit Court of Appeals found that a relator’s share should be treated as ordinary income for tax purposes rather than as capital gain.
After just one year of operation, the SEC made the first payment under its Whistleblower Program. The program was established in August 2011 as part of the 2010 Dodd-Frank Act. The whistleblower will receive nearly $50,000, representing 30% of the amount collected in an SEC enforcement action against the perpetrators of a securities fraud scheme.
On August 13, 2012, a U. S. District Court in Dallas, Texas entered a final judgment in the amount $40,472,759 for Qui Tam plaintiffs against a defendant for violations of the False Claims Act. The violations stemmed from fraudulently inflated charges that were submitted by a government subcontractor to Lockheed Martin Corporation and then passed on to the United States government.
On July 27, 2012, it was announced that the McKesson Corporation agreed to pay $151 million to 29 states to settle allegations that the company artificially raised Medicaid drug prices, resulting in excess charging for prescription medications.
A recent Senate report stated that for-profit colleges mismanage taxpayer money despite their reliance on federal financial aid which accounts for as much as 90% of their revenue. The report was issued by U.S. Senate Committee on Health, Education, Labor and Pensions which is chaired by Iowa Senator Tom Harkin.
Defense subcontractor, Robbins, LLC, settled False Claims Act allegations filed by a former employee, James Brown of Temple, Georgia. Mr. Brown filed the suit alleging that Robbins used an expired ingredient, Elastomag 170, when mixing a rubber compound used in sonar nose cones for U.S. Navy ships. Goodrich subcontracted with Robbins to prepare two rubber compounds which would form the outer layers of the sonar nose cones.
The District of Columbia Court of Appeals upheld a ban by the U.S. Department of Health & Human Services prohibiting three former executives from serving in the healthcare industry. This 12-year ban affected Perdue Pharma executives, CEO Michael Freedman, General Counsel Howard Udell, and Chief Scientific Officer Paul D.
On August 2, 2012, the Mayo Clinic and three related Mayo entities agreed to settle the False Claims Act suit which was filed in the U.S. District Court for the District of Minnesota.
A recent article revealed that the U.S. government is expected to receive as much as $8 billion this year to resolve charges of defrauding the government. This amount is more than twice the amount anticipated by the Department of Justice. The substantial increase is due in part to the resolution of long-pending actions against defense contractors and pharmaceutical manufacturers.
In a unanimous decision, the U.S. Court of Appeals for the Ninth Circuit determined that knowingly submitting low bids, premised on false estimates, can be a violation of the False Claims Act.
If you are aware of any person, corporation or entity that you think may be violating the Federal False Claims Act or a State False Claims Act, contact us today.