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New York Whistleblower And Commercial Litigation Blog

Worker's whistleblower suit vs. Bank of the Internet moves ahead

A former employee of the Bank of the Internet claims he saw wrongful conduct occur at BofI between his hiring in 2013 and his firing in June 2015. He cited over a dozen examples of wrongful conduct of a serious nature.

That conduct allegedly included items such as depositing third-party annuity checks into a personal account, maintaining a $4 million account for the CEO's impoverished brother, and changing account entries in order to get around rules against lending to known criminals. Some of the alleged wrongdoing violated the Sarbanes-Oxley and Dodd-Frank acts.

Pre-recession whistleblower suit revived against Wells Fargo

In light of a 2016 Supreme Court ruling, the Second Circuit Court of Appeals has ordered a federal court to reconsider the case of two men who tried to blow the whistle on actions by Wells Fargo and two mortgage lenders before the 2008 financial crisis.

The case involved adjustable-rate mortgage specialist World Savings Bank. Wachovia bought World Savings' parent company, Golden West Financial Corp., in 2006 for $24.2 billion. In 2008, Wells Fargo bought both Wachovia and Golden West for $12.7 billion.

NYC pharmacist accused of defrauding Medicaid of $11 million

A New York City pharmacist is facing both a civil complaint and criminal charges after allegedly bilking Medicaid out of $11 million. The pharmacist is accused of giving kickbacks to Medicaid patients in exchange for the opportunity to refill their prescriptions -- or to buy the prescriptions outright and bill Medicaid despite never intending to fill them. The patients were typically poor and the prescriptions were often for expensive HIV medications.

The kickback scheme resulted in millions of dollars billed to Medicaid, sometimes entirely fraudulently. Much of the money was spent on luxury purchases and travel, according to New York Attorney General Eric T. Schneiderman's office. Both state and federal law prohibit paying kickbacks for prescriptions or patient referrals.

Whistleblower to receive over $2 million in False Claims Act case

A former employee of a mobile ophthalmic company blew the whistle on kickbacks being paid to potential doctor-clients. Sightpath Medical Inc., TLC Vision Corporation and their former CEO have agreed to pay $12 million to resolve the allegations, and the whistleblower will receive 19.5 percent of that settlement -- or $2,340,000.  The U.S. Government also intervened in an underlying lawsuit against the Cameron Ehlen Group, d/b/a Precision Lens, and its owner.

Lawsuit: Walgreens conspired with PBMs to charge the insured more

A Walgreens customer who was insured through Anthem Blue Cross Blue Shield has filed a federal class action lawsuit against Walgreens accusing it of conspiring to overcharge customers who have insurance. According to the lawsuit, Walgreens has secret agreements with a number of pharmacy benefit managers, or PBMs, which allow the pharmacy to charge the full copay to insured clients even though many drugs cost less than that copay -- and is sold at that lower price to people without insurance.  This is remarkably similar to a case successfully concluded by Ms. Fischer against CVS/Caremark.

The lawsuit quotes the president of the Louisiana Independent Pharmacies Association as saying, "It's actually costing you more to acquire the drug with your insurance than you could if you walked in off the street and you didn't have insurance."

United Healthcare accused of jacking up federal quality ratings

Two whistleblowers have accused United Healthcare Services Inc. of intentionally mishandling or concealing hundreds of complaints in order to jack up its quality ratings and get bonus payments it didn't deserve. United Healthcare Services runs the country's largest Medicare Advantage plan, and Medicare paid some $1.4 billion in quality bonuses last year -- compared to only $564 million in 2015.

The whistleblowers' allegations were revealed in a False Claims Act lawsuit recently unsealed in Wisconsin. The whistleblowers were identified as a sales agent and a sales manager with the company. The company rejects the allegations.

Don't let a breach of contract be a breach on your finances

In business, contracts are a viable, commonly employed method used to protect the interests of two parties. When one party violates the terms of a business contract, it can result in serious legal and financial complications, and often, it takes a long time to resolve. If you or your New York business is suffering the ramifications of a breach of contract, you do not have to face it alone.

Breach of contract can happen for many reasons. Whether it is unexpected circumstances, financial trouble or another reason, you should not have to bear the brunt of the other party's refusal to adhere to the terms that both sides already agreed to. There may be legal remedies available to you. 

Justice Department forms first Health Care Fraud Unit

After last month's takedown of some 400 medical professionals accused of $1.3 billion in false billings, the Justice Department intends to remain vigilant in its fight against healthcare fraud. It has just announced the creation of the nation's first Health Care Fraud Unit to focus on issues like kickback schemes, upcoding and false diagnoses.

"Health care fraud often exploits patients through unnecessary or unsafe medical procedures," said the acting U.S. Attorney for the Northern District of Illinois, where the unit will be located. "Health care providers who cheat the system must be held accountable."

Wells Fargo to pay $577,500 to fired fake-account whistleblower

There has been a major development in the case of Wells Fargo and the harsh incentives it allegedly put in place to encourage its private bankers to open fraudulent accounts. A former branch manager in Pomona, California, was fired after she brought forward concerns about conduct that she reasonably believed constituted mail, wire and bank fraud to her superiors.

Investigators from the Occupational Safety and Health Administration determined that the branch manager's termination was due, at least in part, to her having blown the whistle on Wells Fargo's allegedly fraudulent activities.

False Claims Act case allowed for undisclosed body armor defects

A False Claims Act lawsuit has been revived involving the materials supplier Toyobo and the now-defunct Second Chance Body Armor Inc., which produced bulletproof vests that they knew could be defective. The federal General Services Administration brought a fraudulent inducement claim against the companies in 2015, but a prior federal judge had granted summary judgment (a decision without trial) to the manufacturers and then ruled again in their favor in 2016.

On a motion for reconsideration, a new federal judge ruled that the case can go forward. What the previous judge had failed to appreciate, the new judge ruled, was that the GSA would never have purchased the defective bulletproof vests if the companies had disclosed known defects as required by law. This is the essence of fraudulent inducement to enter into a contract.

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