Written March 27, 2015 by Robert Lu
On Monday, March 23, 2015, the U.S. Department of Justice announced that Fireman’s Fund Insurance Company has agreed to pay $44 million to settle allegations under the False Claims Act that it knowingly issued insurance policies that were ineligible under the U.S. Department of Agriculture’s (USDA) federal crop insurance program and falsified documents. Fireman’s Fund, an Allianz SE subsidiary headquartered in Novato, California, provides personal and commercial property insurance throughout the United States.
Between 1999 and 2002, Fireman’s Fund operated a crop insurance business and participated in the federal crop insurance program. Under the program, Fireman’s Fund sold and serviced crop insurance policies that were reinsured by the USDA for a portion of the risks. According to the allegations, the Allianz unit, Fireman’s Fund, falsified multiple documents out of six U.S. offices between 1999 and 2002 that were eventually submitted to the USDA, including backdating policies, forging the signatures of farmers, accepting late and altered documents, whiting-out dates and signatures, as well as signing documents after relevant deadlines had passed.
The settlement between Fireman’s Fund and the Justice Department includes no determination of liability. For more information about the False Claims Act, and the Firm’s resources and services for whistleblowers please visit the Firm’s Whistleblower Page.
Written March 4, 2015 by Robert Lu
On Monday, March 2, 2015, the U.S. Department of Justice announced that Dr. Charles Denham of Laguna Beach, California, and the former chair of the Safe Practices Committee of the National Quality Forum, has agreed to pay the United States $1 million to settle allegations that he violated the False Claims Act by soliciting and accepting kickbacks.
Dr. Denham is a patient safety consultant who operates Health Care Concepts and the research organization Texas Medical Institute of Technology, both of which were also named as parties in the lawsuit. In 2009 and 2010, he was also co-chair of the Safe Practices Committee of the National Quality Forum.
The settlement resolves allegations that, under agreements entered into in 2008, Dr. Denham received monthly payments from CareFusion Corporation while serving as the co-chair of the Safe Practices Committee, which reviews, endorses and recommends standardized healthcare performance measures and practices. The lawsuit further alleged Dr. Denham received the kickbacks in exchange for influencing the recommendations of the National Quality Forum and for recommending, promoting and arranging for the purchase of CareFusion’s product, ChloraPrep, in violation of the Federal Anti-Kickback Statute. The United States alleged that this conduct caused the submission of false or fraudulent claims for ChloraPrep to federal health care programs because a violation of the Anti-Kickback Statute is a predicate offense under the False Claims Act statute.
Although Dr. Denham has agreed to this settlement, there has been no determination of liability.
Written by Robert Lu
The U.S. Securities and Exchange Commission, on Monday, March 2, 2015, awarded a former company officer approximately half a million dollars for reporting securities-law violations in a rare public case of a high-level staffer getting an outside bounty after raising concerns internally.
The unnamed tipster will get between $475,000 and $575,000 for giving the SEC information on an unspecified securities fraud that led to an enforcement action by the SEC. (The SEC is required by law to protect the confidentiality of whistleblowers. The agency does not disclose information that might reveal a whistleblower’s identity.)
The SEC said that the former officer discovered the fraud either through the company’s internal “processes for identifying, reporting, and addressing possible violations of law” or because another employee told him or her about it. Normally, this would disqualify a person from the SEC whistleblower program. In this instance, however, the officer fell into an exception provided by the agency’s whistleblower rules because he or she reported the potential wrongdoing internally at least 120 days before reporting it to the SEC.
The SEC has now made 15 whistleblowers awards since the program started three years ago. Payouts have totaled nearly $50 million. The money comes from an investor protection fund financed through financial sanctions collected by the SEC. Whistleblower awards can range from 10% to 30% of the money collected in a case.
For more information about the SEC Whistleblower Program and the Firm’s resources in this area, please visit the Robbins Geller Rudman & Dowd LLP Whistleblower page.