News Archives - Page 2 of 47

Crypto-related fraud losses hit $5.6B; whistleblowers can help

Oct 31 2024

Online scams are soaring, drawing the eye of federal enforcers, who want the help of whistleblowers to prosecute and stop fraudsters.

Cryptocurrency-related complaints, an up-and-coming area of fraud, hit $5.6 billion in losses last year, up 45 percent from 2022, according to an FBI report. Investment fraud accounted for the bulk of the crimes with a cryptocurrency nexus, followed by tech support scams, personal data breaches, extortion, confidence/romance, and government impersonation.

Several federal agencies recently issued an alert warning investors about relationship investment scams, in which bad actors — often masquerading as an old acquaintance or potential romantic partner — gain a target’s trust over time, then get them to send money for false investments. These may overlap with cryptocurrency scams.

The federal government urges vigilance anytime someone makes unsolicited contact with you online, through an app, or via text messages — no matter how trustworthy the person seems, particularly if they’re asking for money. Don’t share personal finances or identity information with those who reach out in this way. The U.S. Securities and Exchange Commission offers 5 key questions to answer before you invest in anything and encourages reports of fraud to the SEC or FINRA.

But vigilance isn’t always enough, and many people still fall prey. Whistleblowers can help.

In August, the Commodity Futures Trading Commission announced a more than $1 million award to a whistleblower who voluntarily offered original information about improper crypto trading that ultimately resulted in a successful enforcement action. Whistleblowers are becoming increasingly significant in this type of enforcement, the announcement said.

In the evolving area of cryptocurrency, which may be regulated by various agencies, talk to an experienced whistleblower attorney to find out about protections for whistleblowers and about potential rewards if money is recovered.

If you have been the victim of or suspect crypto-related fraud, contact Keller Grover for a free and confidential consultation.

$60M settlement underscores need for Medicare whistleblowers

Oct 25 2024

A CVS subsidiary recently struck a $60 million settlement to resolve kickback allegations, the latest settlement highlighting financial threats to Medicare programs.

Oak Street Health allegedly paid third-party insurance agents to recruit to its primary care clinics seniors who were either eligible for or enrolled in Medicare Advantage, regardless of the best interests of the seniors, in violation of the False Claims Act and Anti-Kickback Statute, according to a release. Some Medicare Advantage plans contract with health care providers like Oak Street Health to provide primary care services to plan members.

Fraud and kickbacks in the popular Medicare Advantage program, also known as Part C or managed care, pose a worrisome problem — not just because they misuse billions of taxpayer dollars to pad a private company’s bottom line; they also can affect the quality of care that the wrongfully documented patient receives in the future.

Medicare Advantage costs the government more per patient; there’s concern that unsupported diagnosis codes are being added to patients’ charts. In recent audits, the government’s Medicare watchdog organization found that 70 percent of the diagnosis codes weren’t supported by the patient’s medical record.

The nation depends on whistleblowers to help root out corruption in this area — and whistleblowers are eligible for an award of up to 30 percent of recoveries, which often include substantial penalties. Keller Grover’s Kate Scanlan recently helped a whistleblower pursue a case against Sutter Health for adding false medical conditions to Medicare Advantage patient records in order to get bigger payments from the government. The case resulted in a record $90 million settlement.

The False Claims Act targets fraud against the government; the Anti-Kickback Statute prohibits any sort of payment for patient referrals or recommendations related to items or services covered by federally funded programs.

If you suspect or have knowledge of fraud in Medicare Part C, or other fraud against the government, contact Keller Grover for a confidential, free consultation. We can advise potential whistleblowers about the best path forward from the very beginning, helping minimize the impact of reporting, protect rights and achieve the best possible outcome for the situation.

Wingstop owner will pay $1.7M over wage theft after tip leads to settlement

Oct 25 2024

Wingstop employees who suffered from wage theft will benefit from a $1.7 million settlement — yet more proof that employees who stand up against wrongdoing can be made whole.

The California Labor Commission announced the settlement, which pays affected workers $5 for every $1 originally due to them. The case affects about 550 employees of a Wingstop franchisee who owns five locations in Bakersfield.

It all started with a tip from one of the chicken restaurants. Ultimately, investigators found that the owner had schemed to pay workers less by disguising his ownership of the five locations. The owner treated each location as a separate employer, even though he ran all of them and shared employees among the locations. The benefit was financial: Workers were paid a lower minimum wage intended for businesses with 25 or fewer employees.

The owner also circumvented worker protections using scheduling ploys, according to the labor department. When employees worked at more than one Wingstop location — yet surpassed eight hours in a day or 40 hours in a week — the owner denied them overtime pay. He created schedules that switched staff member locations at times that let him avoid paying meal break premiums, and he did not pay them for time spent traveling between locations.

All told, citations covered minimum wage violations, contract wage violations, meal period premiums, liquidated damages and waiting time penalties.

Calling wage theft a “serious crime,” Labor Commissioner Lilia García-Brower emphasized that the office will enforce monetary consequences on law breakers.

If your employer is treating you unfairly — or you suspect wrongdoing — don’t suffer silently. Keller Grover offers free, confidential consultations to help workers better understand their rights, protections and options.

In more than 25 years litigating fraud and employment cases, we have recovered hundreds of millions of dollars for clients and class members. We can advocate for you.

Prescription drug price fraud persists; whistleblowers help root it out

Oct 04 2024

The federal government has been working to make pricey prescription drugs more affordable for the roughly 54.1 million people who are enrolled in the Medicare prescription program, known as Part D.

However, fraud threatens to cost both the government and individuals suffering from health conditions significant amounts of money. Whistleblowers — working people who witness wrongdoing and courageously report it — can play a key role in protecting both.

The government has been pursuing drug price fraud to protect both the public and the Medicare program. A generic pharmaceutical manufacturer, Glenmark Pharmaceuticals Inc., USA, recently reached a $25 million civil settlement to resolve allegations that it fixed the price of a generic drug used to treat high cholesterol. The settlement followed last year’s announcement that seven generic pharmaceutical companies — including Glenmark — collectively agreed to more than $681 million in criminal penalties related to price-fixing, bid-rigging and market-allocation schemes affecting many generic medicines.

In August, a whistleblower prompted Humana to reach a $90 million settlement over allegations that the health insurance company caused individuals and the government to pay more than their share of Medicare prescription drug costs.

Deceptive activity undermines ongoing efforts to cut drug prices. The Centers for Medicare & Medicaid Services has negotiated directly with drug companies for lower prices, starting in 2026, for 10 of the most frequently dispensed drugs in the Medicare program. These drugs treat conditions such as heart disease, diabetes and cancer.

When the change takes effect, the 9 million people with Medicare who use at least one of the drugs could save, collectively, an estimated $1.5 billion in out-of-pocket costs. Medicare stands to save even more — about $6 billion a year.

Entities that knowingly and falsely claim money — or don’t pay owed money — affecting the federal government face triple damages and penalties under the False Claims Act.

The False Claims Act allows whistleblowers to be compensated 15 percent to 30 percent of recoveries from successful cases. In fiscal year 2023, whistleblowers filed 712 qui tam suits, or lawsuits alleging false claims on behalf of the government.

At Keller Grover, we help whistleblowers protect the country against fraud and make sure public money gets to its intended beneficiaries. Through our confidential, free consultations, we advise potential whistleblowers about the best path forward from the very beginning. Our deep experience litigating both fraud and employment law uniquely equips us to represent whistleblowers.

Cybersecurity Breaches Are Costly. Whistleblowers Can Be Crucial in Preventing Them

Oct 04 2024

Protecting taxpayer money is one of the most important purposes of the False Claims Act. A false claim against the federal government is sometimes clear to see from a whistleblower’s standpoint, such as when unrendered services are billed to Medicare. But cybersecurity is becoming an increasingly important vulnerability for the federal government and the watchful eyes of whistleblowers who understand the complexities of information technology are needed more than ever.

This year, a botched security update by Crowdstrike cost an estimated $5.4 billion while taking computers at airports, hospitals and financial institutions offline, grounding flights and causing other disruptions. Change Healthcare was hacked by cybercriminals, disrupting healthcare payments and medical services across the country and causing more than $16 billion in damages. There was also a breach that may have compromised the Social Security number of every U.S. citizen.

As Keller Grover attorney Kate Scanlan points out in a recent article for the TAF Coalition, these three examples did not involve governmental entities but they nonetheless illustrate how all computer systems are vulnerable, including those operated by the federal government. An 2021 Executive Order noted that “the security of software used by the Federal Government is vital to the Federal Government’s ability to perform its critical functions,” and “there is a pressing need to implement more rigorous and predictable mechanisms for ensuring that products function securely, and as intended.” The next year, the White House said the federal government is increasingly reliant “on information and communications technology (ICT) products and services to carry out critical functions.”

Last fiscal year, IT was the fifth-largest service procurement for agencies other than the Defense Department, totalling $10.2 billion. To protect that investment from cybercrime and preventable breaches, the federal government launched the Civil Cyber-Fraud Initiative, which includes pursuing False Claims Act liability for companies that falsely certify compliance with cyber security requirements. When whistleblowers who spot noncompliance with security standards step forward to report wrongdoing, they are helping prevent a future breach or attack that can not only cost taxpayers money but expose their private and personal data.

In three years since the Justice Department launched the initiative, it has led to nearly $30 million in recoveries and at least $5 million paid to whistleblowers who’ve come forward with information about cybersecurity fraud. In the initiative’s first full year, 2022, the government recovered $9 million when Aerojet Rocketdyne, Inc. resolved allegations that it had misrepresented its compliance with cybersecurity requirements in certain government contracts. Last year, Verizon Business Network Services paid slightly more than $4 million to settle claims that it failed to implement required cybersecurity controls in its Managed Trusted Internet Protocol Service (MTIPS) provided to federal agencies.

As Kate wrote in her article, relying on whistleblowers to alert the government about inadequate cyber security is a proverbial ounce of prevention when we know it costs billions for a cure. For those who want to report such wrongdoing, it’s critical to engage a whistleblower attorney early in the process. With more than 30 years of combined experience litigating fraud and employment cases — and billions in recoveries for its clients — Keller Grover is uniquely positioned to represent whistleblowers.

If you want to report cybersecurity fraud in your organization, we are here to help. For advice about how to handle suspected fraud, contact Keller Grover for a free and confidential consultation.