If the Justice Department enters the case begun by you the Whistleblower, and if the Government prosecutes the case and wins, the Whistleblower is entitled to a maximum of 25% and a minimum of 15% of any funds recovered by the Government as a result of the verdict or settlement.

If the Justice Department elects not to participate and the whistle blower proceeds alone, the maximum award increases to 30 percent. Under certain circumstances the award can be as low as 10 percent, but in most cases, the whistleblower receives between 15 and 25 percent of the total recovery that the Government recovers from the cheater.

Fifteen to 25 percent of what? Damages can be set as high as three times the amount of each instance of the proven fraud. Further, the statutory penalty for submitting a false claim is $10,000 for each false claim. The number of assertable False Claims is not measured by the number of contracts your employer has with the Government, but by the number of fraudulent acts committed under that contract. In other words, if the sale of ball bearings involves a thirty cent overcharge on one lot, that thirty cent overcharge is what is found in that one claim. The Government is entitled to treble damages for each false claim in each lot. (30 times 3 = ninety cents times the number of lots of ball bearings) plus a $10,000 fine for each false claim. As you can imagine, these figures begin to multiply exponentially. And your 15% to 25% of the recovery is based on the final figure the Government comes up with in its settlement or verdict, not the amounts you have listed in your original complaint.

Did You Know…

In 2012, in just one case, the Government recovered $3 billion dollars.

Because someone blew the whistle on defense contractors and medical facilities and pharmaceutical companies and a long list of other cheaters, the Justice Department collected, between 1986 and September, 2004, more than $ 8.5 billion dollars.

In another case, the Trial Court awarded three Relators (whistleblowers) $52,049,126 for their efforts in bringing a successful False Claims Case.

Before discussing below the specific recoveries and rewards to the Government and to Whistleblowers, it is important to point out, once again, that when a comment is made on False Claims matters across the country, the settlements, judgments, recoveries and rewards to whistleblowers that are set forth in these cases overwhelmingly involved the work of other attorneys, rather than the Law Office of John F. Murphy.

Rewards to Whistleblowers:

For Mislabeling; Medicare Fraud

Whistleblowers are rewarded for uncovering Medicare FraudBayer and GSK (GlaxoSmithKline) sold relabeled drugs to an HMO at deeply discounted prices, and then concealed this information in order to avoid their obligation to pay millions of dollars in additional rebates to the Medicaid program. The total payment by both Bayer and GalaxoSmithKline was $344 million. The Whistleblower George Courto, a former marketing executive at Bayer who is now deceased, filed the qui tam action against Bayer in 1999. The Relator’s share of the Bayer portion of the settlement was $34 million, which went to Courto’s estate.

For Laboratory Billing Practices; Medicare/Medicaid Fraud

In another Medicare/Medicaid case involving GlaxoSmithKline and a whistleblower – in which a man named Merena blew the whistle on fraudulent laboratory billing practices – the Department of Justice received $333 million. After a seven day evidentiary hearing to determine the relator’s share, Mr. Merena was awarded $52,049,126.00.

For Work Not Done

United Technologies Corp. billed the Government for work on helicopters at the Sikorsky division which it hadn’t done yet. Mr. Keeth, the executive vice president, blew the whistle on this activity by beginning a lawsuit in the United States District Court. The Federal Government settled for $150 million. Mr. Keeth, the whistleblower, received $22,500,000.

Reporting fraud toward the government can be rewarding

Teledyne, Inc., settled two false claims with the Government involving relays and systems for a total of $112,500,000. The Government accused Teledyne of faking the testing of components and of fraud in its accounting for costs. In the first case, a man named Stache from quality control and a man named Muelhasen, a test lab manager, received a total of $18,500,000.

In the second case, Teledyne inflated cost data and then certified that the data were accurate and current and complete. The data weren’t accurate and complete. A man named Kirchoff, the pricing specialist, and a man named Killingsworth, received a total of $4,600,000 for blowing the whistle.

For Unnecessary Tests, False Billings, Medicare Fraud

Damon Clinical Laboratories, Inc. fraudulently billed Medicare, Medicaid and CHAMPUS by bundling medically unnecessary tests not knowingly ordered by doctors. The Government recovered $83,700,000 and Jeanne Byrne, one of three whistleblowers, received $9,000,000.Whistleblowers can report activity like submitting false documentation and fraudulent billing to the government.

Blue Cross Blue Shield of Massachusetts paid $2.75 million after putting in false Medicare reports, inflating the number of claims it processed and exaggerating the speed with which claims were processed. Because of this fraudulent activity, it received larger Government reimbursements than it was entitled to. The relator was a former employee of BCBS Massachusetts andrecovered $550,000.

Blue Cross Blue Shield of Michigan paid $27,600,000 in a Qui Tam action for submitting false documentation and fraudulent billing. The fraud occurred when the Government tried to review a specific set of audits and BCBS backdated their audits to hide what it had done.Mr. Flynn, a man who had performed audits for Blue Cross Blue Shield, blew the whistle and was rewarded $5,500,000.

For Misuse of Funds

The New York State Department of Social Services and New York State colleges paid $26.97 million for over-billing and misuse of funds it charged the federal Government for training of social workers. A former New York State employee received $4.05 million for blowing the whistle. (Note: This case was concluded before the separation of powers case that prohibited recovery from states or municipalities.)

For Failing to Bond

Whistleblowers protect against safety risks while getting rewarded.General Electric Company agreed to pay the Government $7.18 million to settle a Qui Tam suit filed by Ian Johnson, an electrical engineer at the company’s Evendale, Ohio aircraft engine plant. General Electric was accused of failing to satisfy electrical bonding requirements in its contracts, thereby creating a safety risk in the engines of commercial planes and military aircraft such as the F-16 fighter and B-1B bombers of not having undergone proper testing for resistance to electrical interference. Although the Air Force and FAA found no safety problems, the company would still have been liable under the False Claims Act. Mr. Johnson, the relator (whistleblower who began the lawsuit) was rewarded with $1,700,000.

For Destroying Records

Teledyne allegedly missed jet engine parts under an Air Force repair contract and altered and destroyed records. Teledyne paid $4,750,000 and the relator Gerald Woodward got $831,250.

For Failing to Test

Hughes Aircraft Co. Inc. failed to perform tests on components used in military electronic equipment and paid $4,050,000. Margaret Goodearl, Ruth Aldred & Taxpayers Against Fraud received a total of $891,000.

Whistle-Blower gets reward

For Improper Tests

Air Industries Group improperly tested aircraft parts. The Government got $6,800,000 and the whistleblowers received $1,530,000.

For Overcharging

CSX Transportation, Inc. paid $5.9 million to the U.S. Government and 11 state Governments to settle a Qui Tam suit filed by A. David Nelson, a former CSX employee, in conjunction with Taxpayers Against Fraud, The False Claims Act Legal Center. Mr. Nelson accused CSX of defrauding federal and state governments by overcharging for materials used to maintain and repair railroad crossings. While working on an audit of certain certain transactions, Nelson discovered that CSX failed to obtain the lowest prices available for construction materials, as required by the U.S. Department of Transportation’s Rail Highway Crossing Program. CSX did not obtain materials through competitive bidding, established “shell” companies through which materials could be marked up and resold at higher prices, and inflated the number of person-hours required to wire equipment. Mr. Nelson was rewarded $1.18 million for blowing the whistle.

Overcharging the DOT is fraudulent activity that comes under the false claims act.General Dynamics Corp. paid $1,800,000 to settle a suit for overbilling the Government for testing F-16 fighters. Four former company employees who tested the jets at Edwards Air Force Base knew that General Dynamics billed the defense department for thousands of hours that were never worked by using falsified time cards from about 50 employees who regularly left the plant early. The four whistleblowers received $405,000.

Lockheed Martin, Inc. and the Martin Marietta Corp. overcharged the Department of Defense when it underbid on a contract then boosted research and development costs. Lockheed and Martin Marietta paid $5,300,000, and the relator, Jerry Mayman, received $795,000.

For Not Offering Discounts

Rubbermaid Commercial Products paid $887,000 because they didn’t offer the same regular discounts they were offering to other customers for food service, for waste baskets and other cleaning products. Every Government contract contains a “Most Favored Customer’ clause that requires the Government be offered a price that is the same, or lower than, the contractor’s Most Favored Customer. In the Rubbermaid case, As a result, the Federal Agencies ended up paying higher prices on 16 Federal contracts. The whistle blower was awarded $185,000.

For False Certifications on Gearboxes

Falsifying landing gear charts is a dangerous kind of fraud that deserves to be reported.Lucas Industries, a British corporation and two U.S. subsidiaries (LWI) paid the Government $88,000,000 to settle a Qui Tam suit brought by Frederick Copeland, a machinist who formerly worked for the company. Copeland accused LWI of falsifying gear charts for a key component of the Navy’s F/A18 Hornet and major defects in gearboxes for the Army’s Multiple Launch rocket system. One of the subsidiaries, Lucas Western, pleaded guilty to 37 counts of making false certifications to the Department of Defense that gearboxes for Navy fighter jets and Army rocket launchers had been fully inspected in accordance with contractual requirements when they had not. The investigators had suggested that the gearboxes supplied by Lucas were responsible for aborted missions, system failures and engine fires. A criminal fine of $18.5 million was paid by Lucas Western, and Lucas Industries was barred from receiving new Government contracts. Mr. Copeland, the machinist who blew the whistle, received $18,480,000.

For False Diagnoses

Allied Clinical Laboratories, Inc. paid the Government $4.9 million to settle a Qui Tam suit which charged that it put in false claims for reimbursement for laboratory tests to Medicare. Medicare does not pay for “limited coverage” blood tests unless a physician certifies that they are medically necessary, and Allied Clinical had inserted false diagnoses into the diagnosis codes of many of the Medicare billings.

Whether inflating research projects or communication fraud, blowing the whistle can be rewardingRamona Wagner and Jeanine Dehner, former billing clerks for the company, noticed this fraudulent activity. They blew the whistle and were rewarded with a 17 percent share of the proceeds – $833,458.

For Inflating Research and Development

FMC Corp inflated military contracts, including amounts for independent research and development, and paid the Government $13,000,000 to settle a Qui Tam suit. Robert Nearegarder, the whistleblower, received $2,860,000.

Additional Examples of Government Recoveries

In FY 2011, federal and state False Claims Act cases returned over $4 billion back to U.S. taxpayer-funded programs. This sum does not include criminal fines, but does include several large state False Claims Act settlements, including over $300 million recovered by the state of California in a series of laboratory fraud cases.

Taketa-Abbott Pharmaceutical (TAP) Products Inc. was giving doctors kickbacks by providing free samples of Lupron with the knowledge that the physicians would bill Medicare and Medicaid at $500 per dose. TAP got caught, and had to pay $559,483,000 because of fraudulent drug pricing and marketing of Lupron, which is a drug sold for the treatment of prostate cancer.

In December, 2000, the Department of Justice reported that the nation’s largest for-profit hospital chain, HCA, formerly known as Columbia/HCA, agreed to pay $840 million in criminal and civil fines and penalties. The civil settlement resolved seven of the 27 qui tam lawsuits that were brought against HCA across the United States. The allegations involved billing for services provided to ineligible patients, falsifying DRG codes, improperly billing for certain lab tests and billing for home health services that were medically unnecessary or never provided. The civil settlement included over $95 million to resolve allegations of fraudulent laboratory billing practices; more than $403 million to resolve allegations of upcoding; $50 million to resolve allegations that the company claimed non-reimbursable marketing and advertising costs disguised as community education, and $90 million to resolve allegations of improper charges to Medicare in the purchase of home health agencies.


These are but selected examples from the health care field. (And you ought to notice that the HCA settlement only dealt with seven of the 27 cases, meaning there still were 20 other unresolved False Claims cases against HCA).

Another example is the Bayer and GlaxoSmithKline (GSK)’s settlements of cases – these in 2005 – involving schemes referred to as “lick and stick.” Bayer and GSK sold re-labeled drugs to an HMO at deeply discounted prices, and then concealed this information in order to avoid their obligation to pay millions of dollars in additional rebates to the Medicaid program. As a result of their fraud, Bayer and GSK agreed to pay over $344 million to settle, and, at the time in 2005 – it was the largest Medicaid fraud settlement in history.

In January of 2000, Fresenius Medical Care of North America paid $385,000,000 for fraudulent and fictitious blood testing claims by LifeChem, Inc., NMC’s clinical blood testing laboratory, for kickbacks it had paid to dialysis facilities to obtain blood testing contracts.

Eli Lilly agreed to pay more than $1.4 Billion in criminal and civil fines, penalties and damages arising from allegations made in multiple whistleblower lawsuits.The qui tam suits alleged that the pharmaceutical giant defrauded Medicare, Medicaid, and other government-funded health care programs in connection with its marketing practices for it blockbuster atypical antipsychotic, Zyprexa.

Pfizer, Inc. agreed to plead guilty to criminal conduct and to pay $2.3 billion in criminal and civil fines, penalties and damages to settle allegations made in multiple whistleblower lawsuits that the pharmaceutical giant defrauded Medicare, Medicaid and other government-funded health care programs in connection with its market practices for four of its drugs. The settlement up to that point was the largest qui tam settlement in U.S. history. As part of the record settlement, Pfizer agreed to pay $300 million to resolve allegations that it engaged in off-label marketing of its blockbuster atypical anti-psychotic Geodon, which generated over $1 billion dollars in sales in 2008.

On May 27, 2011 the United States District Court for the Middle District of Tennessee entered an order awarding $82.6 million to the United States, ruling that RCG and its parent company Fresensius Medical Care Holdings, Inc. “exhibited reckless disregard of legal mandates” in creating a false billing system for its medical equipment.

On November 10, 2010, Hewlett-Packard Corporation agreed to pay $16.25 million to settle allegations made in multiple whistleblower lawsuits that the technology giant defrauded the Schools and Libraries Program of the Universal Service in: (1) conspiring to rig the competitive bidding of E-Rate contracts; and (2) subverting the competitive bidding processes for E-Rate contracts by illegally providing gratuities, including meals, trips, and event tickets to school district representatives in Dallas and Houston, Texas in order to improperly influence the bidding process.

McKesson Corporation agreed to pay the United States more than $190 million to resolve claims that involved reporting inflated pricing information for a large number of prescription drugs, causing Medicaid to overpay for those drugs. The government alleges that McKesson, a large drug wholesaler, reported the inflated pricing data to First DataBank (FDB), a publisher of drug prices that are used by most state Medicaid programs to set payment rates for pharmaceuticals.

Deutsche Bank paid over $202 million to settle a False Claims Act case alleging the bank repeatedly made false certifications to HUD and FHA in connection with mortgages made under the Direct Endorsement Lender Program. The underlying charge is that Deutsche Bank green lighted over $5 billion of FHA-insured loans without doing due diligence on those loans as promised and certified.

As part of the $25 billion global resolution between the U.S. Government and the five largest mortgage lenders in the country, Bank of America agreed to pay $1 billion to settle several False Claims Act cases alleging Bank of America and Countrywide Financial and its affiliates engaged in fraudulent underwriting of HUD-backed FHA loans.

Six False Claims Act whistleblower mortgage fraud lawsuits were recently settled for a total of over $362 million. Sherry Hunt’s False Claims Act case against Citigroup was settled for $158 million. Lynn Szymoniak blew the whistle on a $95 million fraud perpetrated by Bank of America, JPMorgan, Wells Fargo, and Citigroup. Victor Bibby and Brian Donnelly helped recover $45 million from JPMorgan Chase in a qui tam lawsuit not joined by the U.S. Department of Justice. A whistleblower case filed by Kyle Lagow against Bank of America was settled for $75 million and appears to be part of the $1 billion global FCA settlement detailed above, as does a $6.5 million case brought by Gregory Mackler. Another whistleblower lawsuit, filed against JPMorgan Chase by a whistleblower by the name of Harris, was set to settle for $6.19 million.

On November 10, 2010, Hewlett-Packard Corporation agreed to pay $16.25 million to settle allegations made in multiple whistleblower lawsuits that the technology giant defrauded the Schools and Libraries Program of the Universal Service, also known as the “E-Rate Program.” The case which was filed as a qui tam action in 2005 allegations that Hewlett-Packard was involved in: (1) conspiring to rig the competitive bidding of E-Rate contracts; and (2) subverting the competitive bidding processes for E-Rate contracts by illegally providing gratuities, including meals, trips, and event tickets to school district representatives in Dallas and Houston, Texas in order to improperly influence the bidding process.

If you know of an instance like any one of the above, or any one of dozens of other schemes in which a corporation or health care provider or anyone else is ripping of the Government by submitting False Claims, John F. Murphy would like to represent you.