G&E’s False Claims Litigation Group has represented whistleblowers in some of the largest qui tam cases brought under federal, state and municipal False Claims Acts. These cases have been a catalyst for exposing unlawful practices that drain government dollars and place consumers at health and safety risk. Below is a representative sampling of the Firm’s whistleblower/false claims cases.
Western District of Virginia
G&E’s efforts on behalf of the lead whistleblower against Abbott Laboratories served as a catalyst for a $1.6 billion recovery for federal and state governments. The result marked one of the largest recoveries under the False Claims Act in a pharmaceutical case involving a single drug. The case was initiated when G&E’s False Claims Litigation Group brought claims in the United States District Court for the Western District of Virginia on behalf of the U.S. government and more than two dozen states alleging that Abbott had unlawfully marketed its anti-epileptic drug, Depakote, to children and nursing home patients. In addition to a monetary recovery, the settlement broke ground with a corporate integrity agreement that places compliance burdens on Abbott’s corporate management.
District of South Carolina
In a major whistleblower settlement, G&E, working with the U.S. Department of Justice and the U.S. Attorney’s office in South Carolina, reached an agreement with Amgen in which the drug giant paid $24.9 million to resolve claims that it paid kickbacks to long-term care pharmacies so that elderly patients in nursing homes across the nation would be switched to or placed on the company’s drug, Aranesp. The drug, one of several Erythropoetin stimulating agents (ESAs) on the market, was developed to treat patients with severe anemia whose lives were endangered from receiving frequent blood transfusions. The settlement with the government speaks to the stunning breadth of Amgen’s alleged conduct from September 1, 2003 to December 31, 2011. Specifically, the U.S. alleged that Amgen offered and paid kickbacks to long-term care pharmacy providers for the purpose of inducing them to recommend Aranesp and influence health care providers’ selection and utilization of the drug within the nursing homes, skilled nursing facilities, and long-term care settings. These kickbacks were paid by Amgen as purported market-share rebates, purported volume-based rebates, grants, honoraria, speaker fees, consulting services, dinners, travel, or purchases of unnecessary data.
District of South Carolina / Western District of North Carolina
G&E’s False Claims Litigation Group played a part in the government’s $25 billion recovery in the winter of 2012 against several of the world’s largest banks. G&E represented the whistleblower in a lawsuit against mortgage servicers Bank of America Corporation, J.P. Morgan Chase & Co., Wells Fargo & Company, and Citigroup Inc. The defendants agreed to pay $95 million to resolve allegations that they participated in a pervasive nationwide practice of failing to obtain required mortgage assignments and using false assignments to submit Federal Housing Administration mortgage insurance claims, which resulted in servicing misconduct. G&E worked with the U.S. Attorney’s Office for the District of South Carolina, the U.S. Attorney’s Office for the Western District of North Carolina, the Offices of Inspector General and legal counsel from the U.S. Department of Housing and Urban Development, Treasury and Federal Reserve to achieve this settlement. The whistleblower’s allegations and information also served to aid in the government’s overall blockbuster recovery.
Delaware Superior Court
G&E won a $2,953,826.40 jury verdict on behalf of its client, a whistleblower who exposed a scheme by Overstock.com to avoid reporting and remitting to Delaware millions of dollars in dormant gift cards. Following a six-day trial in Delaware Superior Court, a 12-person jury unanimously found that Overstock failed to report and remit unredeemed gift card balances that by law should have been reported to the State of Delaware as unclaimed property. As a result, Overstock was found to have violated Delaware’s False Claims and Reporting Act over a four-year period. The aggregate amount of unreported gift card balances was just under $3 million – under terms of Delaware’s whistleblower statute, Overstock is liable for treble damages plus statutory fines, attorneys’ fees and costs. Judgment was entered against Overstock for treble damages in the amount of $7,266,412.94 plus statutory fines of $22,000. Presiding Superior Court Judge Paul R. Wallace has not yet determined plaintiffs’ attorneys’ fees and costs.
Middle District of Tennessee
In a global whistleblower settlement resolving claims from seven qui tam lawsuits, G&E represented three relators in a case alleging healthcare fraud by Tennessee-based company Community Health Systems, Inc. (“CHS”). One of the nation’s largest hospital chains, CHS paid $97 million to resolve accusations that emergency room admissions were overstated at 120 hospitals in 20 states in a scheme to cheat federal and state insurance plans out of millions. The scheme to defraud the Medicare system dramatically compromised patients’ safety by unnecessarily hospitalizing patients, robbing legitimate patients truly in need of care. G&E, along with the U.S. Justice Department and several attorneys general from affected states, reached the historic settlement in August 2014, ensuring the integrity of Medicare.
District of Massachusetts
G&E represented one of several whistleblowers in a case against pharmaceutical giant GlaxoSmithKline (GSK) that resulted in a $1.04 billion recovery for the federal and state governments. The suit arose from alleged misrepresentation by GSK in its promotion of the company’s popular asthma and Chronic Obstructive Pulmonary Disease (COPD) medication, Advair.
District of Massachusetts
G&E was lead counsel for whistleblowers Natural Resources Defense Council and several individuals in a case involving a failure to identify, report, properly handle, and properly dispose of hazardous waste produced and stored at a government-operated enrichment plant in Kentucky. The U.S. Department of Justice intervened and settled the case for $5 million. In recognition of the high degree of assistance provided by the relators and their counsel, the DOJ awarded the relators 23% of the portion of the settlement attributable to the False Claims Act claims – which is well in excess of what is normally awarded in a settled case.
Eastern District of Virginia
G&E’s False Claims Litigation Group represented a whistleblower in a qui tam action involving allegations of price-fixing and bid-rigging by companies providing moving and storage services for U.S. military service members. The whistleblowers, citizens of Germany, came forward and reported the False Claims Act violations to the U.S. Army in 2002, resulting in criminal convictions and fines for federal antitrust violations for a number of moving companies and at least one individual. A partial settlement of the False Claims Act allegations, totaling $13 million, was reached. The case set precedent for a foreign national to seek relief under the U.S. False Claims Act.
District of Massachusetts
G&E’s False Claims Litigation Group represented one of six whistleblowers who revealed information to the government that resulted in an overall $2.3 billion recovery for the federal and state governments.
Western District of Oklahoma
G&E represented two key whistleblowers behind a $257.4 million settlement between drugmaker Wyeth Pharmaceuticals, a subsidiary of Pfizer, and the U.S. Department of Justice stemming from alleged marketing abuses of Wyeth’s powerful immunosuppressant drug Rapamune. The case was originally brought in the U.S. District Court for the Eastern District of Pennsylvania by two whistleblowers, both of whom were sales representatives for the company. Initially, the case was declined by the Justice Department, however, G&E continued to move forward with the case. On September 21, 2010, the Justice Department intervened and transferred the case to the U.S. District Court for the Western District of Oklahoma, where there was an ongoing investigation. The settlement agreement noted the broad scope of Wyeth’s alleged unlawful marketing of Rapamune for well over a decade, spanning from September 1999 to December 2011, including the knowing promotion of Rapamune for uses that were not approved by U.S. Food and Drug Administration. In addition to the civil settlement, the company pled guilty to a violation of the Food Drug and Cosmetics Act and entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services. The settlement is one of the largest False Claims Act recoveries for a single drug.