Angelo R. Mozilo, founder and former chief executive of Countrywide Financial Corporation, and two others settled a $73 million deal with the SEC to avoid going to trial on allegations of fraud and insider trading. The SEC suit, filed in June 2009, alleged that Countrywide’s exposure to risky loans was misrepresented by the three men and also accused Mozilo of insider trading.
Petricca Construction Company, a Massachusetts-based contractor, was allegedly involved in construction fraud and violating the Massachusetts False Claims Act. A new lawsuit filed by the Massachusetts Attorney General claims that Petricca falsely certified compliance with contracts that required Petricca to use minority- and woman-owned businesses for work equal to a certain value of the contract.
With the recent $422.5 million settlement by Novartis in the Eastern District of Pennsylvania, now seems to be a good time to step back and look more broadly at the magnitude of recent FCA settlements. Over the past 22 months alone, a total of 11 pharmaceutical companies have paid over $6 billion to the government.
Cisco Systems and Westcon Group North America have settled claims of overcharging the federal government and have agreed to pay the government $48 million. The settlement resolves a qui tam lawsuit brought by Norman Rille and Neal Roberts in Arkansas. The settlement covers a fraction of sales to the General Services Administration from 1997-2009 involving Westcon sales of Cisco products to the government.
On September 8, 2010, the First Circuit Court of Appeals dismissed a false claims act case by invoking the public disclosure bar. The court held that a complaint for wrongful discharge under state law triggers the public disclosure bar where the wrongful termination is based on the same set of operative facts as the qui tam action.
The Justice Department is considering joining a qui tam lawsuit now under seal concerning the use of performance enhancing drugs in cycling races. The qui tam relator is Floyd Landis, a former teammate of Lance Armstrong.
In 2006, Charles Donigan sued his former employer, St. Jude Medical, under the Federal False Claims Act for allegedly paying kickbacks to physicians and other health care providers to induce them to use St. Jude medical devices, including pacemakers.
Hewlett – Packard settled claims that it knowingly paid kickbacks to systems integrator companies in return for recommendations that federal agencies purchase H-P products. The government also claimed that H-P defectively priced a 2002 contract with the General services Administration by failing to disclose complete information during the negotiating process.
Allergan settled claims of off-label marketing of its Botox pharmaceutical and other claims for a total of $600 million. The government accused Allergan of recommending Botox for unapproved uses including headache, pain, spasticity and juvenile cerebral palsy.
If you are aware of any person, corporation or entity that you think may be violating the False Claims Act, securities, commodities, tax, anti-money laundering, or sanctions laws, contact us today.