Tycko & Zavareei LLP has represented whistleblowers in qui tam cases filed in courts around the country. As is typical for qui tam cases, many of those cases remain “under seal” or subject to other confidentiality requirements. But here are some of the incredible results—significant settlements and important court rulings—that we’re allowed to tell you about and are proud to have achieved for our brave whistleblower clients.
Tycko & Zavareei LLP partners Jonathan Tycko and Andrea Gold represented a whistleblower in one of the largest settlements ever won in a kickback case. Tycko and Gold helped the whistleblower bring a qui tam lawsuit under the False Claims Act against Advanced Biohealing, Inc. (“ABH”). The suit alleged that ABH utilized illegal kickback schemes to sell its product, Dermagraft, to hospitals operated by the U.S. Department of Veterans Affairs. That lawsuit initially filed in federal court in the District of Columbia and later transferred to the Middle District of Florida, resulted in many criminal convictions and a large settlement. Pharmaceutical company Shire, which had purchased ABH, agreed to pay $350 million to federal and state governments and remains one of the largest settlements awarded in a kickback case.
In this groundbreaking case, Tycko & Zavareei LLP partners Jonathan Tycko and Anna Haac represented the relator in a qui tam case against Victaulic Company, alleging that Victaulic imported pipe fittings into the United States without proper country-of-origin marks. In a hotly contested appeal, the United States Court of Appeals for the Third Circuit ruled for the first time that if a company knowingly evades customs duties by importing goods that are not properly marked with their foreign country of origin, that company is subject to being sued by whistleblowers under the False Claims Act. U.S. law requires that imported goods be marked with their country-of-origin so that customers and consumers know where the goods were manufactured. If a company imports foreign-made goods in violation of that requirement, then the company is liable to the government for “marking duties,” which are extra duties equal to 10% of the value of the goods.
Tycko & Zavareei LLP partner Jonathan Tycko represented two whistleblowers who brought a qui tam lawsuit under the False Claims Act against defendants Orbit Medical Inc. and Rehab Medical Inc. The case alleged that Orbit sales representatives, under the direction of one of Orbit’s top executives, Jake Kilgore, forged medical records so that Orbit could obtain Medicare payments for electric wheelchairs. By blowing the whistle on this fraud, the firm’s brave clients helped the government get several criminal convictions and the return of more than $7.5 million to the government.
Tycko & Zavareei LLP partner Jonathan Tycko represented a whistleblower who brought a qui tam lawsuit under the False Claims Act against Cablexpress Corp. d/b/a/ CXtec, alleging that the company violated the Trade Agreements Act by knowingly selling products to U.S. government agencies manufactured in China and other non-approved countries. The lawsuit resulted in substantial payments by CXtec to the United States government; the settlement’s exact terms are confidential.
Tycko & Zavareei LLP partner Jonathan Tycko represented a whistleblower in a qui tam case under the False Claims Act alleging various forms of upcoding and other billing fraud by a large radiation oncology practice group. The case raised many important and recurring issues about using statistical sampling in healthcare fraud cases and the circumstances under which a physician’s medical judgments can cross the line into fraud. In an important decision issued in 2020, Judge David G. Campbell of the District of Arizona ruled that the sampling protocol developed by the firm and its experts could be used to prove the alleged False Claims Act violations, and that, under the circumstances presented by this case, the physician’s decisions about treatment options and how to bill for those treatments could be “false” within the meaning of the Act. The case subsequently settled on confidential terms.
Tycko & Zavareei LLP partner Jonathan Tycko represented a whistleblower against a major toxicology laboratory owned by Sterling Healthcare d/b/a Cordant Health Solutions. The whistleblower alleged that the testing laboratory paid kickbacks to at least two large laboratory clients to induce them to refer tests to the laboratory. The case filed in federal court in the Western District of Washington settled for almost $12 million.
Tycko & Zavareei LLP partners Jonathan Tycko and Andrea Gold represented a whistleblower who brought a qui tam lawsuit under the False Claims Act against defendants Arbon Equipment Corporation (Arbon) and Rite-Hite Holding Corporation (Rite-Hite). The lawsuit alleged that Arbon and Rite-Hite violated “prevailing wage laws,” including the federal Davis-Bacon Act and Service Contract Act and specific provisions of the California Labor Code. These prevailing wage laws require contractors and subcontractors working on certain types of government-funded projects to pay employees working on those projects specified hourly wages higher than minimum wage and often higher than pay for doing similar work on private projects. The action brought by a former Arbon employee alleged that Arbon and its parent company, Rite-Hite, failed to pay prevailing wages to employees who installed and serviced loading dock equipment at facilities owned by the federal or California state governments. According to the terms of a settlement, the Defendants paid a total of $4 million. They agreed to change their compensation practices and policies to assure compliance with federal and California prevailing wage laws.
Tycko & Zavareei LLP partner Eva Gunasekera, while working for the United States Department of Justice, helped obtain over $350 million in settlements against one pharmaceutical company. The company allegedly paid kickbacks to induce physicians to prescribe their drugs and marketing the medicines for uses not approved by the FDA (off-label uses). The physicians associated with the case participated in the Medicare and Medicaid programs. The Anti-Kickback law prohibits any payments to physicians that entice them to prescribe a company’s drugs. In this case, the kickbacks allegedly included remuneration in the form of grants or consulting fees, expensive meals, lavish entertainment, and speaking events. The physicians received payment even for canceled events with no bona fide reasons for the cancellations (“sham speaker events”). The Department of Justice received help from individuals who reported the fraud. These whistleblowers received awards of around $21 million.
Tycko & Zavareei LLP partner Eva Gunasekera, while working for the United States Department of Justice, helped obtain a $26 million settlement against a Medicaid managed health care plan contractor in a case brought by whistleblowers. The contractor allegedly failed to provide screening, assessment, and case management services for adults and children with special health care needs and submitted false data to a cash-strapped state Medicaid program to avoid penalties. The former employees of the contractor who shed light on the alleged scheme, and provided the Department of Justice valuable information, received awards of over $3.1 million.
Tycko & Zavareei LLP partner Eva Gunasekera, while working for the United States Department of Justice, helped obtain an over $7 million resolution against a doctor and their cardiology practice after investigating a complaint by two individuals. The whistleblowers alleged that the cardiology practice routinely performed unnecessary cardiac procedures on patients and billed Medicare, Medicaid, and TRICARE for them. The government discovered that the physician was one of Medicare’s highest-paid cardiologists in the country. As part of the resolution, the doctor was prohibited from participation in the Medicare, Medicaid, or TRICARE programs for three years. For reporting these harmful medical procedures to the Department of Justice, the whistleblowers received over $1.3 million.
Tycko & Zavareei LLP partner Renée Brooker, during her time working for the United States Department of Justice, spent five years litigating the Average Wholesale Price Multidistrict Litigation Proceeding (AWP-MDL) and received the Attorney General’s Highest Award for Fraud Prevention for sizeable recoveries. The AWP-MDL involved allegations against many major pharmaceutical companies for a scheme to report false and fraudulent inflated prices for numerous drug products knowing that the Medicare and Medicaid programs relied on those prices to set payment rates. The AWP-MDL was hailed as a successful public-private partnership between the Department of Justice, state Attorneys General, and private counsel representing whistleblowers. Overall, the cases against the pharmaceutical manufacturers resulted in over $2.5 billion in Medicare and Medicaid recoveries. The whistleblowers who brought the violations to the Justice Department’s attention included a physician, registered nurse, pharmacist, insurance biller, and the principals of a home drug infusion health care provider. The whistleblowers received hundreds of millions of dollars for reporting the fraud.
Tycko & Zavareei LLP partner Renée Brooker was the architect of the Big Lender Initiative while working for the United States Department of Justice and received two awards for her efforts. She received the Civil Division Commendation Award for recovering billions of dollars in mortgage fraud funds and the Council of the Inspectors General on Integrity and Efficiency’s Award for Excellence for the $1.2 billion settlement with Wells Fargo Bank. This group of cases was notable for the sizeable recoveries and because all of the banks and mortgage companies publicly admitted wrongdoing. The Big Lender Initiative was driven by the need to protect the Mutual Mortgage Insurance Fund (MMIF) from total collapse after the 2007-2008 financial crisis. The MMIF is a federal fund that acts as the insurer of mortgages guaranteed by the U.S. Department of Housing and Urban Development’s Federal Housing Administration. The MMIF exists to promote homeownership, the bedrock of the American dream. Dozens of financial institutions admitted to knowingly failing to properly underwrite mortgage loans, which, in part, led to the collapse of financial markets. The Justice Department’s investigations received assistance from the individual whistleblowers who reported the fraudulent mortgage loan underwriting. Many of the whistleblowers received rewards of millions and tens of millions of dollars for reporting the fraud.