The suit alleges that TD Bank was aware of Rothstein’s illegal business transactions but still allowed him to conduct his affairs with the bank.  Questionable activity, such as sizable funds passing through Rothstein’s account, occurred without any objections from the bank. In a deposition, Rothstein testified that he wouldn’t have been able to conduct his scheme without the help of TD bank management, such as former bank vice president Frank Spinosa, who Rothstein claims to have paid $50,000 to falsify account balances.

TD Bank denies any wrongdoing and maintains, that it was Scott Rothstein “who defrauded investors.”

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

On August 23, 2007, AirTran removed the pilot from flight status until the airline could hold an internal hearing regarding the sudden spike in the number of mechanical malfunction reports (PIREPS) that he filed. A week after the hearing, the airline fired the pilot for failing to provide a satisfactory explanation for the number of PIREPS he had filed.

In addition to reinstating the former pilot, AirTran must pay the pilot more than $1 million in back wages plus interest and compensatory damages.

Dr. David Michaels, Assistant Secretary of Labor for Occupational Safety and Health, stated:

Retaliating against a pilot for reporting mechanical malfunctions is not consistent with a company that values the safety of its workers and customers… Whistleblower laws are designed to protect workers’ rights to speak out when they have safety concerns, and the Labor Department will vigilantly protect and defend those fundamental rights.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

The lawsuit alleges that the company committed fraud by making false or misleading statements about the cost, effectiveness, and safety of the drug and exerted improper influence over physicians and state officials to recommend the drug, including allegations of providing kickbacks. Additionally, the lawsuit claimed that the company told physicians that the drug was safe to prescribe to children even though the Food and Drug Administration (FDA) had not approved such use.

Janssen announced that it agreed to pay the $158 million settlement in order to resolve all claims against it in Texas. The company noted, however, that it does not admit any liability or wrongdoing by entering into the settlement agreement. The settlement will put an end to the trial that began on January 10, 2012.

Some analysts have contended that the $158 million settlement is a victory for Johnson & Johnson because the company has made billions from the sales of Risperdal and the settlement will allow the company to avoid repaying the $579 million that the Texas Medicaid program spent on the drug in addition to the $500 million in penalties initially sought by Texas Attorney General Greg Abbot.

The suit was originally filed in 2004 when whistleblower Allen Jones, a former employee of the Office of Inspector General of Pennsylvania, claimed that he had uncovered the drug manufacturer’s alleged violations while he investigated claims in Pennsylvania. Texas joined the lawsuit two years later in 2006.

Mr. Jones will receive a portion of the settlement amount for his role as a whistleblower. The details of the settlement, including the amount of the award to be received by the whistleblower, have not yet been released.

The Employment Law Group© law firm focuses in the areas of employment law and whistleblower protection law, has helped many clients file suit against employers that fraudulently billed the U.S. government, and has established favorable precedents under the retaliation provision of the False Claims Act.

Darty wrote a letter to the Elmwood Place Village Council and mayor in July 2011 citing instances in which the Chief of Police committed “unlawful and immoral acts” in the workplace. According to Darty, Peskin destroyed evidence, allowed uncertified officers to use radar guns and chemical spray, poked a handcuffed man until the man’s nose bled, and mistreated officers by firing plastic bullets at them.

Darty claims that Peskin became aware of the allegations in September and suspended Darty for three days for allegedly “lying about how a shift was covered.” According to Darty’s complaint, Peskin continued to retaliate by scheduling Darty to work unfavorable and additional shifts, including on Christmas and weekends. When Darty told Peskin that he could not work a third shift because of his childcare obligations, Peskin responded, “Maybe it’s time to a find a new job.”

The lawsuit also alleges that Elmwood Place Mayor Stephanie Morgan was negligent in investigating the incidents of police misconduct that Darty described in his July 2011 letter.  Under Ohio law, it is mandatory that government officials act upon claims of this nature.

The Employment Law Group® law firm represents employees nationally who have blown the whistle on hostile work conditions and have been the victims of retaliation.

OSHA’s inspection found that the company neglected to properly train employees on safety procedures and proper equipment use. In addition, the company allegedly exposed employees to the danger of falling into the rotating drum through an unguarded chute opening.

“The unexpected startup of machinery during maintenance can injure or kill workers in seconds,” said Jeffrey Erskine, OSHA’s area director for Essex and Middlesex counties. “Preventing this hazard requires a combination of effective hazard control procedures, training and diligence to ensure that the proper safeguards are in place, in use and understood by workers.”

The Employment Law Group® law firm represents employees nationally who have been exposed to hazardous work conditions.

According to the DOJ, Amersham also unnecessarily  increased the amount of Myoview in a dose to increase the drug’s sales. GE Healthcare denies any wrongdoing, stating that it acquired Amersham in 2004, after the alleged False Claims Act violations took place.  “It’s important for drug manufacturers to provide accurate pricing information to Medicare so that taxpayers aren’t overcharged for medicines purchased with their dollars,” said Tony West, assistant attorney general for the Justice Department’s Civil Division, in a statement about the settlement.

James Wagel, a salesman for Cardiolite, a competitor to Myoview,  brought his concerns to the DOJ in 2006 and was awarded $5.1 million from the total settlement.  Wagel claimed that many of his clients purchased Myvoview over Cardiolite because they were able to get more use out of the product.  When doctors used Myoview in testing, however, results showed false problems with patients’ hearts and led to unnecessary and expensive testing.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

“Despite awareness of the hazardous nature of grain bin entries and of the means and methods to prevent such hazards, the employer failed to develop and enforce recognized safe work practices,” said Tom Deutscher, OSHA’s area director in Bismarck.

Wilson worked for BNY Mellon for 19 years as a foreign-exchange trader and left the company this past spring.  During the last few years of his employment with BNY Mellon, Wilson began to gather evidence that the bank was improperly charging state and local pension funds for foreign currency exchanges.  The information that Wilson disclosed provided the basis for lawsuits filed against BNY Mellon by five states, including Florida, New York, and Virginia.

According to the LAMPERS complaint, “While BNY Mellon’s FX trading services were offered to clients as [being] ‘free of charge,’ in truth, BNY Mellon rigged the pricing of its FX transactions in order to reap illicit profits.”  The complaint also alleges that “the Company’s deceptive practice began to surface in January 2011 after two whistleblower (or qui tam) lawsuits against BNY Mellon were unsealed in Virginia and Florida,” leading to other lawsuits, including the recent suit filed by LAMPERS.

On December 21, 2011 the Occupational Safety & Health Administration (OSHA), a division of the Department of Labor ordered Union Pacific Railroad. Co. to rehire a former employee after an unlawful termination.

The employee, who remains unidentified due to OSHA policy, filed a whistleblower complaint against Union Pacific after the company suspended then fired the employee 23 days after the employee reported an on-the-job injury.  OSHA conducted an extensive investigation and found reasonable cause to believe that Union Pacific terminated the employee as a disciplinary action for reporting a workplace injury in violation of the Federal Railroad Safety Act’s whistleblower protection provisions.

OSHA’s Assistant Secretary of Labor David Michaels voiced his support of this decision, stating

“This case sends a clear message that OSHA will not tolerate retaliation against workers for reporting a work-related injury. An unreported injury is an uninvestigated injury. Nothing is learned that can help prevent the next injury.”

In addition to being reinstated, the employee will receive  $300,000 in back wages plus compensatory damages, punitive damages, and attorney’s fees.  OSHA also ordered the railroad not to retaliate against any other employees in the future.

In U.S. ex rel. McNulty v. Reddy Ice Holdings, Inc., the United States District court for the Eastern District of Michigan held that a whistleblower’s severance agreement releasing all claims against the employer does not bar qui tam claims where the government was unaware of the underlying fraudulent activity when the severance agreement was signed.  Whistleblower Martin G. McNulty alleges that his former employer, Arctic Glacier, colluded with competitors since 1997 to raise the price of packaged ice by geographically dividing the market.  According to McNulty, the government spent in excess of $150 million on packaged ice during that time period.

McNulty further alleges that Arctic Glacier terminated him after he learned of and refused to participate in the anticompetitive scheme.  He later filed this qui tam claim under the False Claims Act (FCA), alleging that his employer overcharged the federal government for packaged ice.  Although the court dismissed McNulty’s claims on jurisdictional grounds and a failure to particularly plead his claim, more importantly the court also dismissed Arctic Glacier’s counterclaim alleging breach of the severance agreement – a significant victory for future whistleblowers.   The Court found the release of claims provision in the severance agreement unenforceable against qui tam claims that allege fraud that the government has not yet uncovered.  In support of its finding, the Court states:

. . . [T]hese courts have applied the balancing test set forth by the Supreme Court in Town of Newton v. Rumery, 480 U.S. 386, 392 (1987), which in the context of FCA claims, weighs “the public interest in having information brought forward that the government could not otherwise obtain [against] the public interest in encouraging parties to settle disputes.”  Nowak, 2011 WL 3208007, at *21 (internal quotation marks and citation omitted).  When considering a release of claim in the prefiling period, the court’s “focus must be on the incentive effect in achieving the FCA’s goals of detecting and deterring fraud.”

Related articles

• Department of Justice Recovers Record-Setting $3 Billion in False Claims Act Settlements in 2011 (employmentlawgroupblog.com)
• Department of Justice 2011 Fraud Recovery Announcement, Part II: Kudos to Whistleblowers (pogoblog.typepad.com)
• Medtronic Pays $23.5M to Settle Kickback Allegations (employmentlawgroupblog.com)

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Last week, India’s largest drug manufacturer, Ranbaxy Laboratories Ltd., announced that it had entered into a consent decree with the Food and Drug Administration (FDA) and had set aside a provision of $500 million to cover any liability arising out of a separate investigation by the Department of Justice (DOJ).

The consent decree comes after a 2008 decision by the FDA to ban dozens of Ranbaxy’s generic drugs from entering the US due to alleged violations of FDA manufacturing and quality standards at two of Ranbaxy’s plants in India. Additionally, the FDA alleged that Ranbaxy had falsified data about the shelf life, ingredients, and stability of certain medications including drugs that were to be distributed to foreign countries as part of the President’s Emergency Plan for AIDS Relief program (PEPFAR).

According to the consent decree, Ranbaxy has agreed to strengthen its compliance with industry standards. While the agreement is not an approval for Ranbaxy to resume manufacturing and importing drugs to the U.S., it will allow the company to seek FDA approval to resume importing pharmaceuticals produced at the two allegedly tainted factories. The consent decree is pending approval by the U.S. District Court for the District of Maryland. The $500 million reserve is intended to cover any of Ranbaxy’s potential civil and criminal liability.

Japan-based Daiichi Sankyo Co. acquired a majority stake in Ranbaxy in 2008 and has announced that it expects its net income to decline over 60% in the coming year due to Ranbaxy’s settlement with the DOJ. Some analysts have predicted that the settlement may wipe out Ranbaxy’s expected profits for the next two years. Because of the $500 million provision and the decreased profit forecasts, Daiichi Sankyo Co. has decided to cut executive pay for six months.

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Last week, the Securities and Exchange Commission (SEC) charged Stiefel Laboratories Inc. (Stiefel Labs), a subsidiary of GlaxoSmithKline PLC, and the company’s former chairman and chief executive officer Charles Stiefel with defrauding employees and company shareholders by allegedly making stock buybacks at significantly undervalued prices.

The SEC alleges that Stiefel Labs failed to report certain information to employees and shareholders, thereby enabling the company to buy back stock from employees and shareholders at undervalued prices.  According to the SEC’s complaint, which was filed in the U.S. District Court for the Southern District of Florida, “Charles Stiefel knew that five private equity firms had submitted offers to buy preferred stock in November 2006 based on equity valuations of Stiefel Labs that were approximately 50 to 200 percent higher than the valuation later used for stock buybacks.” Despite knowing of the offers, Stiefel Labs continued to purchase stocks that were below estimated equity valuations.  Shareholders and employees who sold undervalued stock to Stiefel Labs lost more than $110 million, according to Eric I. Bustillo, director of the SEC’s Miami Regional Office.

The SEC is seeking permanent injunctive relief for shareholders and employees, financial penalties, disgorgement of ill-received gains with prejudgment interest against both Stiefel Labs and Charles Stiefel. The SEC is also seeking to permanently bar former CEO Charles Stiefel from serving as an officer or director of any publicly traded company

On December 8, 2011, the United States Tax Court issued an opinion in Whistleblower v. Commissioner of Internal Revenue granting an IRS whistleblower’s motion for a protective order permitting the whistleblower to maintain his or her anonymity.  The court stated:

We conclude that granting [the whistleblower's] request for anonymity strikes a reasonable balance between [the whistlebower's] privacy interests as a confidential informant and the relevant social interest, taking into account the nature and severity of the asserted harm from revealing [the whistleblower's] identity and relatively weak public interest in knowing [the whistleblower's] identity.

The U.S. Tax Court also discussed the long history of granting anonymity to whistleblowers, including the Second Circuit’s discussion of the informer anonymity privilege in Socialist Workers Party v. Attorney General (In re United States) as:

… an ancient doctrine with its roots in the English common law, founded upon the proposition that an informer may well suffer adverse effects from the disclosure of his identity.  Illustrations of how physical harm may befall one who informs can be found in the reported cases.  However, the likelihood of physical reprisal is not a prerequisite to the invocation of the privilege.  Often, retaliation may be expected to take more subtle forms such as economic duress, blacklisting or social ostracism.  The possibility that reprisals of some sort may occur constitutes nonetheless a strong deterrent to the wholehearted cooperation of the citizenry which is a requisite of effective law enforcement.

Courts have long recognized, therefore, that, to insure cooperation, the fear of reprisal must be removed and the most effective protection from retaliation is the anonymity of the informer.

Internal quotations and citations omitted.  In the Tax Court’s first decision regarding anonymous whistleblower claims, the court ruled in favor of the anonymous whistleblower and established an important  precedent for those future whistleblowers who expose their employer’s tax fraud.

Related articles

• Tax Court Protects Anonymity of Whistleblower 14106-10W (forbes.com)
• Study Finds That Three-Quarter of Americans Would Blow the Whistle on Wrongdoing in the Workplace (employmentlawgroupblog.com)
• SEC Reports 334 Whistleblower Tips and 170 Enforcement Orders in First Seven Weeks of Whistleblower Award Program (employmentlawgroupblog.com)
• IRS Wants You To Report Abusive Tax Promotions Or Preparers (forbes.com)

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Roy Fastabend, a welder and inspector, alleges that he was fired after reporting that in order to save time and money, a subcontractor cut corners in the construction of the new stadium that will be home to the Florida Marlins.  Fastabend claims to have witnessed  Mike Garcia, a fellow inspector , routinely ignoring engineering specifications and falsifying records, signing off on welds that were never examined.

When Miami-Dade County Inspector General (IG), Chris Mazzella, learned of Fastabend’s complaints, the IG sent the Marlins a letter asking detailed questions about the welding done in the ballpark. The Marlins general contractor, Hunt/Moss, reported that after receiving the Inspector General’s letter, it had many parts of the stadium redone or replaced .  Miami-Dade County then had its engineer of record sign off on the final inspection.

“If people knew what was going on there or how they did things, I mean, I won’t go to that stadium… I won’t take my kids into that place,’’ said Fastabend. “Sadly, it looks beautiful, but there are questions.”

The “Ethics and Action Survey,” conducted from November 17 to 20, 2011, questioned 1007 Americans, and found that 78% of respondents would blow the whistle on workplace wrongdoing. The survey also found that 34% of respondents claim knowledge of wrongdoing in the workplace.

The Dodd–Frank Wall Street Reform and Consumer Protection Act, Pub.L. 111- 203, which was enacted by Congress in 2010, includes provisions intended to encourage reporting of fraud and other malfeasance.  These include strong protections against retaliation and financial rewards for whistleblowers between 10 and 30% of the penalties or monies recovered by the Securities and Exchange Commission (SEC).  The Ethics and Action Survey showed that a startling 68% of the individuals interviewed were unaware of the new whistleblower program operated by the SEC, following the enactment of Dodd-Frank.

Reflecting on its results, the study states:

It is disheartening to see that wrongdoing in the workplace continues to be so widespread. However, the findings affirm the need for, and value of, the SEC’s Whistleblower Program. This program, in concert with other regulatory reforms, has the potential to dramatically enhance investor protection and restore public faith in the markets.