Top payouts to federal false claims whistleblowers in fiscal year 2014
In the last fiscal year, the federal government recovered a record $5.69 billion under the False Claims Act, which means the payouts to the whistleblowers, who play a crucial role in exposing cases of fraud, have been some of the biggest ever.
Whistleblowers who file false claims lawsuits can receive up to 30 percent of the money that a company pays to the government, which added up to $435 million in whistleblower rewards primarily for mortgage, health care and defense fraud cases.
Here’s a round up of some of the biggest False Claims Act settlements and the subsequent whistleblower rewards from the last fiscal year:
Johnson & Johnson
Settlement: $2.2 billion “to resolve criminal and civil liability arising from allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration and payment of kickbacks to physicians and to the nation’s largest long-term care pharmacy provider.” It’s one of the largest health care fraud settlements in U.S. history, according to the Department of Justice.
Whistleblower’s share: $167.7 million divided among whistleblowers in Pennsylvania ($112 million), Massachusetts ($27.7 million) and California ($28 million).
JP Morgan Chase
Settlement: $614 million “for violating the False Claims Act by knowingly originating and underwriting non-compliant mortgage loans submitted for insurance coverage and guarantees by the Department of Housing and Urban Development’s Federal Housing Administration and the Department of Veterans Affairs,” according to the Department of Justice.
Whistleblower’s share: $63.9 million will go to Keith Edwards, a former assistant vice president supervising a government insuring unit for JP Morgan, for providing tips that led to the company’s agreement to pay $614 million.
Bank of America
Settlement: $16.65 billion — the largest civil settlement with a single entity in American history — “related to the packaging, marketing, sale, arrangement, structuring and issuance of RMBS, collateralized debt obligations, and the bank’s practices concerning the underwriting and origination of mortgage loans.”
Whistleblower’s share: Former Countrywide Financial executive Edward O’Donnell is collecting more than $57 million for helping federal prosecutors force Bank of America to pay $16.65 billion for its role in churning out shoddy mortgages and related securities before the financial crisis.
Settlement: $150 million “to the federal government to resolve allegations that from 2008 to 2010 they billed Medicare for nursing and therapy services that were medically unnecessary or provided to patients who were not homebound, and otherwise misrepresented patients’ conditions to increase payments,” according to the Department of Justice.
Whistleblowers’ share: $26 million split collectively among former Amedisys employees.
Settlement: $124.4 million “for allegedly offering improper financial incentives to nursing facilities in return for their continued patronage of Omnicare to supply drugs to elderly Medicare and Medicaid patients.“
Whistleblowers share: $17.24 million will be awarded to Donald Gale, a former Omnicare employee.