Whistleblower Law Archives

United States Department of Justice Announces False Claims Act Settlements and Judgments in Fiscal Year 2024 Exceeded $2.9 Billion

Jan 20 2025

On January 15, 2025, the Department of Justice announced that False Claims Act settlements
and judgments for the fiscal year ending September 30, 2024 totaled more than $2.9 billion. In
making this announcement, Principal Deputy Associate Attorney General Benjamin C. Mizer
emphasized the critical role that the False Claims Act plays in guarding against fraud on the
government.

Continuing a trend over recent years, more than half of the amounts recovered, over $1.67
billion of the $2.9 billion total, were in cases involving healthcare fraud. The Justice Department
highlighted that these significant healthcare fraud recoveries represented losses only to
federally funded healthcare programs. DOJ also worked in coordination with state Attorneys
General to recover additional amounts for state funded healthcare programs, including
Medicaid. DOJ’s announcement highlighted other important recoveries in cases involving
military procurement fraud, COVID-19 pandemic fraud, failure to provide adequate
cybersecurity, as well as millions in recoveries for other procurement frauds against an array of
government agencies.

Over $2.4 billion of the $2.9 billion recovered came in cases initiated by whistleblowers. In
highlighting those recoveries, the DOJ announcement acknowledged the “efforts and often
times substantial sacrifices” of whistleblowers who use the False Claims Act’s qui tam provision
to file cases and expose fraudulent schemes defrauding taxpayers out of billions of dollars every
year.

“It’s impossible to ignore that more than 85% of the federal government’s successful recoveries
under the False Claims Act in FY2024 started with a whistleblower reporting the fraud using the
law’s qui tam mechanism,” Keller Grover’s Kathleen R. Scanlan, who primarily represents
whistleblowers, noted. “These are incredibly important recoveries spurned by whistleblowers.
But there is so much more work to be done as federal spending increases, and fraud along with
it.” “It’s great to see DOJ acknowledging the role these whistleblowers have played in these
recoveries. But even with $2.9 billion in recoveries last year, we’re still only catching less than
2% of the estimated fraud on the government. We need more whistleblowers to come forward,”
she said. In a first of its kind estimate in 2024, the Government Accountability Office estimated
that the federal government sustains direct financial losses of $233 to $521 billion each year
because of fraud.

Individuals in possession of information that would expose fraud on the government can help
stem the tidal wave of fraud. If you see something, say something. Keller Grover often helps
those who suspect wrongdoing, providing confidential, free consultations. We work with
potential whistleblowers from the very beginning to find the best path forward, help minimize the
impact of reporting, consider potential rewards, protect their rights and achieve the best possible outcomes.

Medicare Advantage Whistleblowers Could Protect the Most Vulnerable Patients: Taxpayers

Dec 18 2024

Alarming patterns keep cropping up in the Medicare Advantage program, and whistleblowers could be key to protecting both patients and taxpayers.

More than half of the roughly 100 million Medicare beneficiaries choose this program, which is supposed to offer patients a health plan comparable to traditional Medicare administered by private insurance companies at less cost to the government.

The problem: As more and more beneficiaries have elected Medicare Advantage it is proving to be more expensive than traditional Medicare. The U.S. government spent an estimated $454 billion on Medicare Advantage in 2023 with growing questions about whether those billions are going to take care of beneficiaries – or are enriching the private companies administering these plans.

A recent article in The Wall Street Journal raised the question of whether private insurers benefit from Medicare Advantage enrollees while they’re healthy but deny coverage when costly illnesses arise, prompting the patients to switch to traditional Medicare plans. Advantage plans require advance approval for many treatments and specify which doctors members can use. The fee for service model in traditional plans does not have the same prior authorization requirements.

When beneficiaries do this – and they increasingly do it when the scrutiny in the Medicare Advantage plans become an obstacle to care – it ultimately costs Medicare (and taxpayers) twice: Paying the private insurers for minimal care when patients are healthy, then paying for costly services when patients get sick and switch back to traditional Medicare.

Where do these suspicions come from?

An analysis by health policy nonprofit KFF found that Medicare spent an average of 27 percent more for people who switched from Medicare Advantage to traditional Medicare compared with those who had always been with the traditional program. That was after adjusting for differences in health status and other characteristics, and it meant an average difference of $2,585 in Medicare spending per person between the two groups.

There were multiple other findings, as well, raising similar questions.

A recent U.S. Senate subcommittee report found that private insurers are more likely to deny prior authorization for coverage of post-acute care, such as stays in skilled nursing facilities, than for other services.

“Insurance companies say that prior authorization is meant to prevent unnecessary medical services. But the Permanent Subcommittee on Investigations has obtained new data and internal documents from the largest Medicare Advantage insurers that discredit these contentions,” U.S. Sen. Richard Blumenthal (D-Connecticut), chair of the subcommittee, said in an October statement. “In fact, despite alarm and criticism in recent years about abuses and excesses, insurers have continued to deny care to vulnerable seniors—simply to make more money. Our Subcommittee even found evidence of insurers expanding this practice in recent years.”

When private companies contract with the government to administer these plans and knowingly manipulate the payment mechanisms to keep payments from the government as profits rather than paying for patient care, whistleblowers could play a key role in both protecting these patients and in preventing fraud against the federal government (and thus, taxpayers).

If you have insight into these practices and suspect fraudulent activity, contact Keller Grover for a free and confidential consultation. Our experienced whistleblower attorneys can answer questions and provide prudent next steps. Whistleblowers who help expose fraud against the federal government also are eligible for 15 percent to 30 percent of recoveries as an award.

Tariffs, Customs Fraud, and How Whistleblowers Can Help

Dec 15 2024

You’ve probably heard plenty about tariffs lately, including a heavy dose of speculation.

What you may not have heard about are the fraudulent measures some companies take in an effort to evade them and essentially get an unfair pricing advantage by defrauding the federal government.

If existing tariffs increase or new ones are imposed, we’ll likely see more attempts to evade them, including fraudulent labeling or transshipment, which involves shipping to an intermediate destination that isn’t covered by the tariff. Often, companies participating in this type of fraud keep two sets of books to prevent or trim what they pay in customs duties or tariffs.

But this is where whistleblowers can help; they often are the only ones who see it happening. During the past 12 years, the government has recovered more than $220 million in settling 43 False Claims Act cases alleging customs fraud, according to The Anti-Fraud Coalition. Of those 43 cases — initiated by internal whistleblowers, industry experts, or competitors — the government intervened in 42. This high rate of government intervention is strong evidence of the government’s interest in customs fraud enforcement actions brought by whistleblowers.

Keller Grover represented a whistleblower in a customs fraud case the government settled for $500,000 in 2015. And whistleblowers who help the government successfully pursue a customs fraud case could receive 15 percent to 30 percent of recoveries as an award.

Keep in mind — customs fraud also can involve other types of fraud, such as counterfeit goods. U.S. Customs and Border Protection recently announced that it seized more than $18.7 million in fake Gibson guitars that were shipped into California from Asia. (This can be a particular risk near the holidays.) All authentic Gibson guitars are made in the United States.

Not only can customs fraud harm businesses and the federal government; it can threaten consumers with unsafe goods or by tricking them into paying high amounts for lesser products.

If you suspect this type of activity, contact Keller Grover for a free and confidential consultation — our experienced whistleblower attorneys can answer questions and work with you to provide prudent next steps.

Historic Bank Secrecy Act Settlement: Was a Whistleblower Involved?

Nov 30 2024

TD Bank last month became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures and to conspiracy to commit money laundering.

The dubious distinction came with agreements to pay more than $3 billion in penalties — the largest penalty ever imposed under the act.

Internal bank communications showed that employees knew lax internal policies made TD Bank, the nation’s 10th-largest bank, an easy solution for criminal networks.

What’s not known: How the malfeasance became public.

The Bank Secrecy Act and Anti-Money Laundering Act allow for whistleblower awards, similar to other government whistleblower programs that reward original tips leading to penalties. They also protect from retaliation whistleblowers who bring complaints to the government, as well as complaints within a company. Part of the draw of the whistleblower program is its anonymity.

Plenty of TD Bank employees knew the bank was violating the law; some even accepted bribes or helped launder narcotics proceeds.

Even if there was no whistleblower behind this settlement, the TD Bank example could inform employees of other banks how to confidentially hold banks accountable for criminal activity. It’s unlikely that TD Bank was alone in efforts to work around this law.

In fact, The Wall Street Journal has reported the Justice Department and other government agencies are investigating Morgan Stanley’s vetting procedures to determine whether it has sufficient anti-money-laundering controls. A recent Journal article uncovered internal bank documents that describe the bank’s failure to complete due-diligence reviews, such as allowing a “self-proclaimed princess claiming to have more than $5 billion in assets … to engage Morgan Stanley for weeks without the bank carrying out a basic background check.”

There were multiple red flags at TD Bank, according to the U.S. Department of Justice:

The bank didn’t update its anti-money laundering compliance program for more than a decade. Rather, senior executives enforced a flat internal budget, despite the bank’s significant growth. Its program looked sufficient on paper but in reality had tremendous flaws.
During the past decade, the bank’s federal regulators and its internal audit group repeatedly brought up concerns about its transaction monitoring program, which helps pinpoint suspicious activities. But the program didn’t change and had anemic staff and funding.
The bank didn’t monitor approximately $18.3 trillion of transaction activity, including that involving high-risk countries. It even told stores to stop filing internal unusual transaction reports on certain suspicious customers. It also allowed more than $5 billion in transactional activity in accounts even after the bank decided to close them.
Three money-laundering networks collectively transferred more than $670 million through TD Bank accounts between 2019 and 2023. In one scheme, employees received gift cards worth more than $57,000 as bribes to continue processing suspicious transactions. The DOJ has charged more than two dozen people related to the schemes.

Individuals in possession of information that would expose a fraud like this need to trust their instincts. If you see something, say something. Keller Grover often helps those who suspect wrongdoing, providing confidential, free consultations. We advise clients about the best path forward from the very beginning, helping minimize the impact of reporting, consider potential rewards, protect their rights and achieve the best possible outcomes.

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.