This is the second part of a two-part article.
In the first of this two-part series, we discussed the success of the United States’ federal False Claims Act (FCA),[1] the rise of international whistleblowers through a study of the Michael Epp case,
The United States recently filed a False Claims Act Complaint in Intervention against Florida-based compounding pharmacy Patient Care America (“PCA”), two PCA employees, as well as the private equity (“PE”) firm that acquired PCA and helped manage the company.1 The scheme alleged by the government was a common one: the payment of kickbacks for referrals of expensive compound drugs,
In the first-of-its-kind enforcement action, The Securities and Exchange Commission accused a hedge fund adviser, Paradigm Capital Management, Inc. and its owner Candace King Weir, of squashing a top trader after learning that he reported trade violations at the firm.
Paradigm had failed to meet their obligations to obtain client’s consent prior to conducting trades.
JP Morgan is the most recent Wall Street firm to write a check, a whopping $614 million, to the government to settle allegations that it violated the False Claims Act by knowingly underwriting non-compliant mortgages that received federal insurance coverage from the Department of Housing and Urban Development (HUD), the Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA).
Tracking the whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, new legislation would establish whistleblower bounties and protections for information given to the New York State Department of Financial Services (“DFS”) – a super agency formed in October 2011 to regulate banks and insurance companies in New York.
A quick summary:
Relator Bradley Birkenfeld will receive a $104 million award, for his part in revealing UBS Bank’s illegal offshore banking scheme. It is believed to be the largest award to an individual Relator and the first major award under the IRS Whistleblower Act. Birkenfeld will have to settle for online shopping for the time being as he is currently finishing out his felony sentence for his part in the scheme,
Abraham Gutterman and his companies, Alliance Capital Metals LLC and AR Goldman Wealth Management, LLC, are barred from the commodities industry by a court order from Judge Marcia G. Cook, of the U.S. District Court for the Southern District of Florida. As a result from a Commodity Futures Trading Commission (CFTC) complaint associated with a fraudulent gold and oil commodity options scheme,
Kyle Lagow, a former home appraiser with Countrywide Financial brought suit under the Federal False Claims Act accusing his employer of defrauding the Federal Government by inflating appraisals on government backed loans. Lagow along with four other whistleblowers, initiated suits that were combined and ultimately led to a $25 billion settlement reached between state and federal officials and five lenders including Bank of America.
Several months ago we reported about Judge Jed Rackoff’s rejection of a settlement between the SEC and Citigroup for its marketing of collateralized debt obligations. The judge found insufficient facts that the settlement was reasonable or in the public interest because Citibank would not admit to liability. That decision is now on appeal to the United States Court of Appeals for the Second Circuit.
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.