Closed Cases: Results for Our Whistleblower Clients
After more than 20 years as a partner, Attorney Murphy left Robinson & Cole in 1996 and started his own law firm, with False Claims litigation his principal focus. His firm has tried several cases across the country, and what follows are the summaries of some of those cases.
In U.S. ex rel. Ian Cartwright, Balfour Beatty and Mass Electric were overcharging Amtrak in constructing the overhead catenary system for the high speed rail system for the Acela Express running from Washington D.C. to Boston. Ian Cartwright, a civil engineer who was responsible for the claims that were submitted to Amtrak and who processed the costs on the extras, hired Attorney Murphy after viewing the www.whistleblowerlawyer.com web site, and he ‘blew the whistle’ on his employer. The joint venture falsified and inflated the costs Balfour Beatty was charging for the extras for drilling foundations. The Government intervened, and, five years after Ian Cartwright wore a wire when he sat down for lunch with his boss as FBI investigators sat three tables away, the joint venture paid the U.S. Government $24.75 million to settle the qui tam case. As the whistleblower, Ian Cartwright received $3,675,000.
In U.S. ex rel. Sal Morello v. Raytel Corp, the defendant provided a device for the testing of pacemakers. The pacemaker patient attached one end of a transmitting device furnished by Raytel to his/her pacemaker and the other end of the device was connected with a phone. The device then transmitted via the phone the pacemaker’s electronic information to a screen at Raytel, where workers monitoring the screens performed the tests. Raytel imposed quotas for the number of test that were to be performed by its employees; Medicare was paying Raytel $45.00 for each test, and 800 to 1000 pacemakers were tested every day, five days a week.
When Sal Morello, the whistleblower, contacted Mr. Murphy, Mr. Murphy learned that the Medicare Fraud Investigators had executed a search warrant at Raytel after Mr. Morello contacted the Government with an anonymous letter. When he came to see Mr. Murphy, almost two years after he had “blown the whistle,” the whistleblower heard “through the grapevine” that the Government was in the process of filing criminal charges. Realizing that time was critical, Mr. Murphy immediately filed the qui tam lawsuit – within six days after he first was retained. The Government recovered $11.5 million from Raytel, and Sal Morello was rewarded $1.725 million as the whistleblower in payouts that were made over a five year period. The details of this case are humorously recounted in the chapter titled “Your Inside Guardian Angel” on pages 188 through 201 of Mr. Murphy’s book, May I Approach the Bench?
In U.S. ex rel. Smith v. Lincare, the defendant paid $526,000 to settle overbilling claims in a False Claims action that was brought in the U.S. District Court in Springfield, Massachusetts. Lincare submitted claims for payment to Medicare based on qualifying tests performed by its employees, but medical equipment providers were not permitted to perform the tests that qualify an individual for medical equipment paid for by Medicare. The settlement covered claims submitted for payment from January 1, 1999 through March 31, 2004, by the three central Massachusetts Lincare facilities. The whistleblower, a former Lincare sales representative, received $96,680.
In U.S. ex rel Robert Babb v. Northrop Grumman, Dr. Robert Babb, in the U.S. District Court in Denver, Colorado sued Northrop Grumman on behalf of the United States Government for ‘converting’ (from the U.S. Government) a programming tool that Dr. Babb had invented. The Lakos metrics tool (the LLC) was created to analyze the dependency structures and fix the root causes of tangles in the software architecture of the Diamond Project code base that Dr. Babb was working on. He conservatively estimated that his tool would save programmers $300,000 a day. When he’d invented his ‘tool,’ he was working in a secure facility at Northrop Grumman’s top secret Government Surveillance Satellite and Reconnaissance Division. After Dr. Babb developed his LLC tool, Northrop Grumman, seeing the enormous money making potential for the tool, removed it from the top secret facility and brought it into a non-secure building in order to develop and market the tool for commercial use. Northrop violated certain rules relating to inventions created under Government contracts, and this was the basis for the qui tam action. Northrop Grumman moved to dismiss, saying that, because the program was developed in a top secret government project, pursuing the matter further would create a risk to national security. Then, in an extraordinary step, the United States Government supported the Defendant in this motion. The District Court Judge,* paying no attention to arguments that the LLC tool, in and of itself was as harmless and non secret/non classified as Windows 95 and posed no threat whatsoever to national security, nonetheless ruled that he had no alternative but to dismiss the case.
*A short time after the dismissal, the Federal Judge, Edward Nottingham, was forced to resign during a bitter divorce proceeding when his wife revealed that he’d been frequenting prostitutes in downtown Denver. The fun part: The hookers gave him a nickname: “Naughty Boy.”
U.S. ex rel. Tim Bohling v. Peter Kiewit & Sons. The Defendant Kiewit, the multi-national construction giant, whose corporate offices were located in Omaha, Nebraska, submitted duplicate claim costs, over payments on equipment and payroll costs, while at the same time ‘cooking’ composite rates so that they didn’t reflect discounts all across the country. Tim Bohling was a certified Public Accountant employed by Kiewit, and he uncovered while performing his auditing duties that Kiewit also had collected refunds that it didn’t pass along to the Government on federal projects in California and throughout the United States. KIewit, defending against the qui tam allegations that were brought in the District Court in Washington, D.C., hired the same defense lawyers it hired for the Cartwright case noted above, (where Mass Electric was a wholly owned subsidiary of Kiewit). After the Government did not intervene, Kiewit settled the claims with the United States for $1,000,000, with $300,000 going to Tim Bohling, the Relator, for blowing the whistle. The relatively low settlement was influenced by the Totten and Allison Engine decisions and came before the enactment of F.E.R.A. in 2009.
U.S. ex rel. Orlando Guadalupe v. Goodyear Tire and Rubber was filed in the Northern District of Ohio at Akron and transferred to Cleveland. Guadalupe was a line worker – a mold and bladder man – working in Topeka Kansas and manufacturing tires for the Humvee military vehicle for the United States Army. He was fired for complaining that Goodyear had speeded up the curing process on a $16 million dollar contract, resulting in the manufacture of ‘scrap’ tires that Goodyear was certifying as being in compliance with the terms of its contract with TACOM. The United States, in order to make its decision on whether it would intervene, requested an extension of time in which to send tire experts to Kuwait in order to test and examine the tires used by the Army in Iraq, and to determine, with a sampling and testing of the Humvee Goodyears tires, whether there was evidence of the same type of defects that Orlando Guadalupe was claiming. Six months later, when the inspectors reported their findings to the Court, their inspection revealed virtually no defects whatsoever in the thousand tires they’d tested, the matter was dismissed.