Last week, it was revealed that Prosecutors say that a former government lawyer named Jeffrey Wertkin tried to sell a whistleblower’s sealed, confidential lawsuit against a Silicon Valley company, for $310,000. He wore a wig to try to disguise him but the man Wertkin was selling to was actually an FBI undercover agent.  Wertkin, 40, worked a coveted job at the Justice Department in 2010 focusing  on cases related to health-care. He remained there until April 2016, when he left for a job at Akin Gump in Washington. His government pay was about $150,000 per year. At  Akin Gump, where Wertkin defended companies sued under the whistle-blower law, attorneys with his background earn as much as $600,000 or more.  According to press reports quoting inside sources,  FBI agents may be questioning Justice Department Trial Lawyers to try to determine where the leaked Complaint came from. If that is the case, this investigation comes at a time when a new Attorney General has just stepped into position at DOJ. It is not clear as to whether Wertkin will cooperate with the Government investigation in order to receive a more lenient sentence. If so, his source could be revealed in a shorter amount of time.

This is a highly unusual case. Wertkin was a senior level trial attorney at line Justice. He  tried a case claiming that hospice chain Aseracare Inc. falsely certified patient eligibility for Medicare funding. The case is on appeal after a judge overturned a verdict for the government. He also handled a case alleging Pharmerica Corp. submitted false claims to Medicare for improperly dispensed drugs, which ended in a $31.5 million settlement, and a suit against Medco Health Solutions Inc. over kickback allegations. That settled for $7.9 million. Justice Department lawyers specializing in False Claims Act cases conduct  investigations in secret after whistle-blowers file a lawsuit accusing companies of defrauding the government. Cases are filed under “seal” to give the government time to investigate. Legally, that suit may not be revealed to anyone outside the government. Companies usually don’t learn about a suit until the government nears the end of its probe.

Mr. Wertkin was arraigned last week on a charge of criminal contempt of court and was released on $750,000 bond. Mr. Wertkin, 40, had recently joined Akin Gump in April after six years as a trial lawyer at the Justice Department. The plan was for him to take a prominent role handling cases for corporate clients.

The Securities and Exchange Commission (SEC) has awarded three whistleblowers  more than $7 million for providing the agency information used to prosecute the perpetrators of an investment scheme. The information the whistleblowers provided helped the SEC recover more than $935 million in financial remedies for those harmed by the scheme, the agency said.

One whistleblower provided information that was a primary impetus for the start of the SEC’s investigation, earning him the lion’s share of the award money: more than $4 million. The other two whistleblowers provided new information during the agency’s investigation, which was deemed to have significantly contributed to the success of its enforcement action, earning them more than $3 million to split.

“Whistleblowers played an important role in the success of this case as they helped our agency detect and prosecute a scheme preying on vulnerable investors,” Chief of the SEC Office of the Whistleblower Jane Norberg said in a press release. “Whistleblowers not only helped us open the investigation but provided critical information after the investigation was already underway.”

The Government of Bermuda has filed a lawsuit against Lahey Clinic asserting that the Lahey and the former Premier of Bermuda, Dr. Ewart Brown created scheme to assure that Lahey would become the healthcare provider of choice for Bermudians. In a Complaint filed in the Federal District Court in Boston this week, the Government of Bermuda alleged that this scheme, spanning over two decades resulted in Lahey receiving preferential treatment when bidding healthcare contracts issued by Bermuda. In return, Mr. Brown received substantial sums of money from Lahey disguised as consulting fees.

 
The case alleged that the scheme violated the Racketeer Influenced and corrupt Organization Act (RICO) for injuries suffered to its business and property and also for violations of the foreign Corrupt Practices Act which prohibits bribes to foreign officials or their family members. The Complaint alleges that Lahey’s formal relationship with Brown began in 1997 when Brown served as Shadow Minister for Human affairs. At that time, according to the Complaint, Lahey began sending Massachusetts based specialist physicians to Bermuda to serve in a clinic there, owned by Brown.

 
The Complaint also asserts that in addition to paying Brown hundreds of thousands of dollars in consulting fees, Lahey also made large donations to Brown’s political party.

CVS and Walgreens, the two largest pharmacies in Texas have been charged with cheating the Medicaid program by exagerrating prices on medications and raking in larger reimbursements than they would be allowed.

CVS’ filed a lawsuit in December, stating that the pharmacy had the state’s blessing to use the prices that are now asserted for Medicaid reimbursement. Weeks later, the state filed a lawsuit of its own, accusing CVS of submitting fraudulent reimbursement requests since 2005. That lawsuit, unsealed this month at the end of a five-year investigation, says CVS inflated prices reported to Medicaid by as much as 670 times the customary price. For example, the lawsuit says the pharmacy falsely reported a $999.99 price for over-the-counter eye drops.

The state estimates CVS has made between $128 million and $130 million by falsely reporting the prices, according to Raymond Winter, division chief of the attorney general’s civil Medicaid fraud division.

Walgreen’s has agreed to pay $50 million to settle  a civil fraud lawsuit against it which alleged it  violated the federal Anti-Kickback Statute (“AKS”) and False Claims Act (“FCA”) by enrolling hundreds of thousands of beneficiaries of government healthcare programs (“government beneficiaries”) in its Prescription Savings Club program (“PSC program”). Specifically, the Government’s Complaint alleges that Walgreens violated the AKS and FCA by providing government beneficiaries with discounts and other monetary incentives under the PSC program, in order to induce them to patronize WALGREENS’ pharmacies for all of their prescription drug needs. The Complaint further alleges that WALGREENS understood that allowing government beneficiaries to participate in the PSC program was a violation of the AKS, but that it nevertheless marketed the program to government beneficiaries and paid its employees bonuses for each customer they enrolled in the program, without verifying whether the customers were government beneficiaries. The settlement will also resolve numerous state law civil fraud claims.

Under the settlement, WALGREENS is required to pay approximately $46.21 million to the United States and has admitted and accepted responsibility for conduct alleged in the Government’s Complaint. Further, as part of the settlement, WALGREENS will pay approximately $3.79 million to resolve the state law civil fraud claims. Walgreens admits to having paid bonuses to employees for enrolling customers in its prescriptions savings program without verifying whether the customers were Medicare or Medicaid beneficiaries, despite stated company policy against enrolling such beneficiaries based on federal statutes. Today’s settlement is a message to other retailers that there will be consequences for such conduct.”

As part of the settlement, WALGREENS admitted, acknowledged, and accepted responsibility for the following conduct:

The largest money transfer company Western Union must  pay $ 586 million for willingly allowing criminals to use its services for money laundering and fraud, federal authorities announced Thursday. The company admitted to “aiding and abetting wire fraud,” a joint statement by by the Department of Justice and Federal Trade Commission stated. The company owed consumers protection against fraud but instead  “looked the other way” and even helped fraudsters, authorities said.

Authorities said that Chinese illegal immigrants used the service to send hundreds of millions of dollars to their human smugglers and Western Union agents helped structure the transactions to avoid federal reporting requirements.Fraudsters posing as family members in need convinced tens of thousands of consumers to send money through the service and complicit Western Union agents often processed the fraudulent payments in return for a cut of the proceeds.

Western Union — which has more than half a million locations in more than 200 countries — apparently knew of fraudulent transactions between 2004 and 2012, but failed to discipline more than 2,000 agents involved, authorities said.As part of the agreement with the authorities, Western Union will  implement stricter policies to prevent future fraud and money laundering.

Credit Suisse must pay $5.28 billion to settle Department of Justice chargesrelated to Credit Suisse’s conduct in the packaging, securitization, issuance, marketing and sale of residential mortgage-backed securities (RMBS) between 2005 and 2007.  The resolution announced today requires Credit Suisse to pay $2.48 billion as a civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  It also requires the bank to provide $2.8 billion in other relief, including relief to underwater homeowners, distressed borrowers and affected communities, in the form of loan forgiveness and financing for affordable housing.  Investors, including federally-insured financial institutions, suffered billions of dollars in losses from investing in RMBS issued and underwritten by Credit Suisse between 2005 and 2007.

Under the terms of this settlement, Credit Suisse will pay $2.48 billion as a fine for its conduct. And Credit Suisse has pledged $2.8 billion in relief to struggling homeowners, borrowers, and communities affected by the bank’s lending practices.

“Credit Suisse claimed its mortgage backed securities were sound, but in the settlement announced today the bank concedes that it knew it was peddling investments containing loans that were likely to fail,” said Principal Deputy Associate Attorney General Bill Baer. “That behavior is unacceptable. Today’s $5.3 billion resolution is another step towards holding financial institutions accountable for misleading investors and the American public.”

Moody’s Corporation will pay announced that it has reached an agreement with the U.S. Department of Justice (DOJ) and the attorneys general of 21 U.S. states and the District of Columbia to resolve pending and potential civil claims related to credit ratings that Moody’s Investors Servicec credit ratings for Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDO) during the financial crisis period.

Moody’s stands behind the integrity of its ratings, methodologies and processes, and the settlement contains no finding of any violation of law, nor any admission of liability.

Under the terms of the agreement, Moody’s will pay a $437.5 million civil penalty to the DOJ to resolve potential civil claims asserted under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). The company has also agreed to pay $426.3 million, to be divided among the participating states and the District of Columbia, to resolve pending and potential state civil claims. The financial impact to the Company will be recorded in the fourth quarter of 2016. The estimated impact is an approximate $702 million after-tax charge or approximately $3.62 per share.

 
Former Employee Claimed Company Falsified Bills for Ambulance Services to Fraudulently Qualify for Higher Medicare Reimbursements in Violation of the False Claims Act

BOSTON – January 13, 2017 – Jeffrey Newman Law, a law firm dedicated to representing whistleblowers nationwide, today announced that MedStar Ambulance, Inc. and its related companies have agreed to pay $12.7 million to settle a False Claims Act lawsuit alleging the company fraudulently billed Medicare for unqualified ambulance services.

The whistleblower, former billing manager Dale Meehan, represented by Attorney Jeffrey Newman Esq. of Boston, alleged MedStar knowingly and fraudulently billed Medicare for ambulance services by billing for ambulance transports that were not medically necessary and by up-coding the runs to exact higher payments from the government.