Articles Posted in Whistleblower Lawsuits

Ex-Deutsche Bank quantitative risk analyst Dr. Ben-Artzi has filed a whistleblower lawsuit against the financial firm. He claims that the bank accurately report its credit derivatives portfolio’s value and that he made his concerns known internally. Ben Artzi is one of three whistleblowers accusing Deutsche Bank of improper reporting to hide $12B in losses. He says that that he decided to notify enforcement authorities because the problem was not addressed or corrected by the firm.

Per his claims, between 2007 and 2010 Deutche Bank, the biggest holder of LSS trades at the time, did not give proper value to the gap option part of its Leveraged Super Senior tranches of credit derivatives portfolio and, as a result, who knows how many investors were hurt. Failure to give proper value to the trades, Ben-Artzi contends, caused the bank to continue projecting the image that it was doing a better job of handling the global economic crisis than other financial firms.

In addition to notifying the Securities and Exchange Commission of these alleged violations through its Whistleblower Program, Ben-Artzi has filed a retaliation complaint with the Labor Department claiming violations of the Sarbanes-Oxley Act’s whistleblower protection provisions. Ben-Artzi says that as he made his way up the chain of command at the bank to try to get the valuation problems remedied, he began to experience isolation and hostility on the job, was not allowed to access records he needed to perform his duties, and lost certain responsibilities as well as a degree of autonomy. He also claims that when he came back from paternity leave last year, Deutsche Bank told him that is position had been transferred to Europe, and he was laid off without being offered the offered the opportunity to transfer or find a new position within the company.

During this past fiscal year, the SEC received 3,001 whistleblower tips from tipsters in all 50 states and from 49 nations. Outgoing SEC Chairman Mary Schapiro said that the Commission’s whistleblower program has proven valuable in uncovering financial fraud. Earlier this month, the agency issued its “2012 Annual Report on the Dodd Frank Whistleblower Program.”

The SEC whistleblower program allows parties to offer up original, quality information about possible securities law violations. Should the information result in a successful SEC enforcement action that leads to over $1 million in monetary sanctions, the whistleblower is entitled to 10-30% of this amount. The award is paid to the whistleblower from the Investor Protection Fund.

If you are someone who has such information, do not hesitate to contact our Boston whistleblower lawyers at Altman & Altman, LLP today. Filing a Qui Tam case can be a complicated process especially when done without legal help. In addition to making sure that your rights are protected throughout the process, an experienced Massachusetts whistleblower attorney can make sure you receive the reward that you are owed.

Did you know that the Securities and Exchange Commission’s SEC Whistleblower Program also applies to reporting of violations of the Foreign Corrupt Practices Act? This means that if you are a whistleblower who reports original information regarding the bribery of a foreign official, you could be entitled to 10-30% of what is recovered as a result of your claim if monetary sanctions are over $1 million. If you have information about such wrongdoing and and are wondering whether this is enough to file a case, you should contact our Boston whistleblower lawyers at Altman & Altman, LLP right away. We can help you assess whether you have grounds for a claim.

Per the Foreign Corrupt Practices Act, US Companies, US Citizens, and certain foreign companies are not allowed to offer to pay, promise to pay or actually make a payment to a foreign official/foreign political candidate/foreign political party with the intention of affecting the recipient or obtaining any improper upper hand in the obtaining or retaining of business. Under the act, a bribe is defined as “anything of value,” which may include money, its equivalent, gifts, property, charitable contributions, stock, commissions, stock options, discounts, employment offers, transportation, insurance benefits, services, use of facilities, equipment, and other items meant to exert influence on the other party.

There is no minimum value to what constitutes a bribe that violates the Foreign Corrupt Practices Act. Even if the payment has not actually been made yet, a Foreign Corrupt Practices Act violation may still have occurred. (However, one except to the Act is when the payment is made to a foreign official to secure or expedite the execution of a routine government action.) Also, a person or company that makes the bribe does so through a third party, such as a foreign subsidiary, agent, distributor, or partner is not exempt from having committed a bribery violation.

Stephen Krahlin and Joan Wlochowski, two ex-Merck virologists, have filed a whistleblower complaint against their former employer. They are claiming that Merck committed fraud against the federal government by overstating the effectiveness of its MMR vaccine. As a result, they contend, the government ended up spending hundreds of millions of dollars on about four million doses of the vaccine, used against mumps, measles, and rubella, that were, in fact, mislabeled and misbranded and not as effective as touted.

According to their Qui tam action, rather than rework the vaccine to make it more effective, Merck decided to revise its testing technique to get the desired results. The vaccine manufacturer began manipulating its clinical lab trials of the MMR-11 vaccine as early as the late 1990’s so that it could retain its monopoly as the manufacturer and seller. (In order to do this, the vaccine had to test as 95% effective.) The whistleblowers claim that they were asked to participate in Protocol 007, which is the name of this modified testing. Meantime, millions of children ended up not getting the full immunization they required.

Massachusetts Whistleblower Lawsuits
In Massachusetts, our Boston injury lawyers also represent whistleblowers with Qui tam clams filed on behalf of the government. Our Massachusetts whistleblower attorneys understand that stepping forward to expose fraud against the state or the federal government takes a lot of bravery and we are dedicated to protecting our clients’ rights and making sure they aren’t retaliated against. We have the experience, skills, and resources to take care of our whistleblower clients’ lawsuits from the beginning until its resolution.

Class Says Merck Lied About Mumps Vaccine, Courthouse News, June 27, 2012

Merck Whistleblower Suit A Boon to Vaccine Foes Even As It Stresses Importance of Vaccines, Forbes, June 27, 2012

More Blog Posts:
Whistleblower Accuses Planned Parenthood Affiliate of Submitting $5.7M in Fraudulent Medicaid Claims, Boston Injury Lawyer Blog, May 31, 2012

WellCare Health Plans Settles Whistleblower Lawsuits in Medicare/Medicaid Fraud Case for $137.5 Million, Boston Injury Lawyer Blog, April 2, 2012
Qui Tam Cases Result in $2.B Recovered in 2011, Boston Injury Lawyer Blog, January 4, 2012 Continue reading

The US Justice Department says that 636 qui tam complaints were filed for fiscal year 2011, resulting in $2.8B recovered. Of the more than $3B involving the False Claims Act that resulted in settlements and judgments from fraud cases, $2.4 billion was related to fraud committed against a number of federal programs, including Medicare, TRICARE, and Medicaid. Usually, no more than 400 whistleblower cases are filed annually.

$2.2B was recovered from civil claims made against pharmaceutical companies alone. GlaxoSmithKline PLC agreed to pay $750 million to settle allegations involving false claims related to medications and adulterate drugs that didn’t satisfy FDA specification. $900 million came from drug companies accused of engaging in unlawful pricing to up their profits.

The False Claim Act
Federal and state False Claims Acts cover fraud committed against any state or federal funded program or contract. Since amendments were made to the federal False Claims Act in 1986, the US Justice Department has gotten back more than $30 billion. The amendments provided stronger incentives for whistleblowers to come forward and file lawsuits on behalf of the government. A whistleblower could end up entitled to up to 30% of what the government recovers.

Kinds of fraud that fall under the False Claims Act include those involving:

• Billing for goods the buyer never received • Billing for services that were never rendered Falsifying testing data or results • Falsifying employee records • Performing unnecessary medical treatments on Medicaid/Medicare patients

Justice Department Recovers $3 Billion in False Claims Act Cases in Fiscal Year 2011, US Department of Justice, December 19, 2011
Qui Tam Action, Legal Information Institute

More Blog Posts:
Whistleblower Lawsuit: Hospice Care Provider Vitas Healthcare Accused of Medicare Fraud, Boston Injury Lawyer Blog, November 27, 2011
Medicare Fraud?: Cigna, UnitedHealth Group, and Aetna Under Scrutiny for Possible Kickback Violations, Boston Injury Lawyer Blog, November 22, 2011
Whistleblower Lawsuit Accuses Florida Hospital of Defrauding Medicare of $2M, Boston Injury Lawyer Blog, November 15, 2011 Continue reading