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Taxpayers Against Fraud Weekly Newsletter

Weekly Newsletter | May 20, 2022 |

Fraud in America: Sen. Chuck Grassley (R-Iowa) Screen Shot 2022-05-21 at 11.02.00

On today’s episode of Fraud in America, we’re interviewing Sen. Chuck Grassley (R-Iowa), one of the key architects of the modern False Claims Act and other fraud fighting programs.

In this interview, he discusses why he entered public service, the success of whistleblower laws like the False Claims Act and SEC Whistleblower Program, and how he is working with other legislative champions to strengthen these laws. Watch the episode here.

Legal Developments


TAF: A Look Back on the Success of the SEC Whistleblower Program

To date, the SEC has paid approximately $1.2 billion to 256 individuals as awards under the Program. Enforcement matters in connection with these payouts to individuals have resulted in nearly $5 billion in monetary sanctions ordered, including more than $3.1 billion in monies that have been, or are scheduled to be returned to harmed investors.

Dept. of Justice: Justice Department Files False Claims Act Complaint Against Medical Device Manufacturer and its Owner for Training Providers to Improperly Reuse Disposable Items

The United States has filed a lawsuit against The Prometheus Group, a New Hampshire manufacturer of pelvic muscle therapeutic systems and related rectal probes, and Richard Poore, its president and sole owner. The complaint alleges the defendants violated the False Claims Act by causing health care providers to bill Medicare for services in which the providers improperly re-used single-user rectal sensors and single-use catheters on multiple patients. 

NY Attorney General: Attorney General James Recovers $36 Million from H&M for Unlawfully Keeping Money in Unused Gift Cards

H&M repeatedly lied to the state about its failure to transfer the unused gift card balances and falsely claimed that an out-of-state company was handling its gift cards business. As part of today’s agreement, H&M will pay a penalty for its wrongdoing and transfer the money owed to the state’s Abandoned Property Fund.

Bloomberg Law: Allergan Kickback Claims Dismissed, Whistleblower Can Try Again

A whistleblower’s claims that Allergan Inc. and Apollo Endosurgery Inc. engaged in a kickback scheme to provide surgeons with free advertising in exchange for purchases of devices used to treat obesity were properly dismissed, a federal court in Maryland said.

Law360: Mayer Brown Gets Most of $2.7M Fee Bid In Duty Evasion Win

A California federal judge awarded Mayer Brown LLP $2.5 million in attorney fees for its $24 million win against a New Jersey-based waterworks and fire protection company that was found to have evaded tariffs on Chinese pipe fittings.

Dept. of Justice: Seven South Korean Companies Agree to Pay Approximately $3.1 Million to Settle Civil False Claims Act Allegations for Bid Rigging on U.S. Department of Defense Contracts

The U.S. alleged the seven companies conspired to suppress and eliminate competition during the bidding process on 15 USACE contracts. The United States further alleged that as a result of this anticompetitive conduct, the USACE paid substantially more for services performed under the contracts than it would have had there been competition among the bidders.   

PR Newswire: Mendenhall Law Group: Federal Court of Appeals decision supports qui tam whistleblowers

In U.S. ex rel. U.S. et al v. Wolf Creek Federal Services, a whistleblower alleged Wolf Creek submitted falsely inflated project estimates to NASA for facilities maintenance projects resulting in the negotiation of fraudulently induced, exorbitant contract prices.

Dept. of Justice: University Of Maryland Shore Regional Health Agrees to Pay $296,870 to Settle Federal False Claims Act Allegations of Billing for Unsupervised Radiation Therapy and Diagnostic Services

Shore Health agreed to pay the United States $296,870 to resolve allegations it violated the federal False Claims Act by submitting false claims to the United States for radiation therapy and diagnostic services that lacked the required supervision from a physician.

Bloomberg Law: Dish Network Must Again Face Whistleblower’s License Suit

Dish Network Corp. must again defend itself in a whistleblower’s False Claims Act suit alleging that it used sham small businesses to win FCC communications licenses worth billions of dollars, the D.C. Circuit ruled Tuesday.

Law360: Docs Urge 1st Circ. To Revive J&J Hip Replacement FCA Suit

Two whistleblower physicians have asked a First Circuit panel to reverse the dismissal of their False Claims Act against Johnson & Johnson concerning allegedly faulty hip replacement devices, saying the district court wrongly held they used confidential information in their complaint.

Dept. of Justice: Manchester Physician Barred From Prescribing Certain Controlled Substances

This agreement resolves all remaining claims the United States asserted against Florence, stemming from a lawsuit originally filed by the former office manager of a Cookeville, Tenn. pain clinic where Florence practiced, which was brought under the qui tam, or whistleblower, provisions of the False Claims Act.

Political Developments


New York Times: A federal appeals court says the S.E.C.’s use of an in-house judge violates defendants’ rights

A divided federal appeals court panel on Wednesday threw a wrinkle into how the Securities and Exchange Commission prosecutes some enforcement actions by declaring that its administrative proceedings can violate a defendant’s constitutional rights.

Law360: Global Tax Chiefs Should Look To US Whistleblower Programs

In welcome news for the global effort to combat transnational tax evasion and money laundering, the head of the Internal Revenue Service's Criminal Investigation Division said he would discuss with other heads of the Joint Chiefs of Global Tax Enforcement whether the J5 should establish its own whistleblower program.

New York Post: US Senate confirms three Biden picks for California, New York federal courts

The US Senate voted on Wednesday to confirm two California state court judges to the federal bench and to approve the appointment of the general counsel of the Girl Scouts of the United States of America as a federal judge in Manhattan.

COVID-19 Fraud Developments


Atlanta Journal-Constitution: Johns Creek man, ‘mastermind’ of $11M PPP fraud scheme, gets 15 years in prison

A Fulton County man at the center of a wide-ranging scheme that siphoned away more than $11 million worth of funds from the Paycheck Protection Program was sentenced to 15 years in prison, according to federal officials.

Sacramento Bee: Woman serving life in prison organizes $2 million COVID fraud ring, feds say

A 37–year-old woman serving life in prison on a 2005 murder conviction ran a $2 million COVID-19 fraud ring in California, federal officials say.