July 8, 2024

Success Stories: How Qui Tam Attorneys Protect The Public

In today’s multifaceted legal world, one group of attorney’s stands out in defense of the federal government. The astute, qui tam attorney. Defending the relator—the person(s) responsible for exposing the fraud committed and advocating for justice— also commonly referred to as the “whistleblower”. These legal heroes can bring these cases to light because of the False Claims Act. The False Claims Act of 1863 is a U.S. federal law that holds individuals and companies (often federal contractors) accountable for defrauding government programs. It serves as the primary litigation tool for the federal government to combat fraud. Under this act is where qui tam law lies, opening the door for any triumphant whistleblower to receive a portion of the fraudulent funds recovered.

The impact of any qui tam lawsuit extends beyond individual cases; they serve as a powerful deterrent against fraud, sending a strong message that promotes accountability and transparency within industries that receive federal funds. This not only helps recover billions of dollars for taxpayers but also makes sure that public funds are used appropriately, ultimately benefiting society as a whole. By exposing and rectifying fraudulent activities, a qui tam lawsuit contributes to a fairer, more just system, reinforcing the integrity of governmental programs and preserving public resources.

Success Stories

Healthcare Fraud

One notable success story in the wing of healthcare fraud involves the case of PharMerica Corporation, which was resolved through the efforts of whistleblowers and qui tam attorneys. In January 2022, PharMerica agreed to pay $4.9 million to settle a False Claims Act lawsuit that accused the company of accepting kickbacks from drug maker Organon USA Inc. to promote two antidepressants, Remeron and Remeron SolTab. This lawsuit, initially filed in 2007 by two former employees of Organon, alleged that PharMerica received discounts from Organon in exchange for promoting these drugs between 1999 and 2005.

Qui tam attorneys Joel Androphy and Janis Gorton from Berg & Androphy played a crucial role in uncovering this fraudulent scheme. Despite the United States declining to intervene, the case persisted for fourteen years, demonstrating the resilience and dedication of the legal team involved. The settlement agreement, although not an admission of liability by PharMerica, marked a significant victory in the fight against healthcare fraud.

The outcomes of this case had far-reaching benefits for the public. By exposing and penalizing their fraudulent practices, the lawsuit helped to see through that federal funds are used appropriately and that patients receive unbiased medical treatment. It served as a warning to other potential fraudsters in the healthcare industry.

Government Fraud

One prominent example of a qui tam case involving government fraud is the $25.4 million settlement reached against DynCorp International and Damco U.S.A. This case was brought under the False Claims Act by whistleblowers Robert Reddell and Robert Hendrix, who exposed fraudulent billing practices related to the provision of supplies to American troops overseas.

The lawsuit revealed that from 2011 to 2013, the government unknowingly paid fraudulent bills for Damco’s work. Despite meeting contractual requirements, DynCorp replaced its freight forwarding contractor, EWC, with Damco to access discounted services at Damco’s quality consolidation center in Dubai. However, Damco’s charges included costs that were supposed to be included in the base rate, and they systematically billed for services not provided, such as oversized charges for non-oversized freight, double-billing, and excessive surcharges.

The impact on the whistleblowers lives was significant. By coming forward, Reddell and Hendrix took considerable personal and professional risks to expose the fraud. Their courageous actions not only led to a substantial financial settlement but also emphasized the importance of liability and honesty in government contracting. As a result of the lawsuit, several changes were implemented to prevent such fraudulent activities in the future. The settlement required Damco and DynCorp to pay $17 million to the U.S. government, including over $9 million in restitution. On top of that, the companies agreed to pay $8.4 million in whistleblower reward to the counsel. This case also prompted stricter oversight and auditing practices in government contracts.

The Public Good

The benefits of qui tam action to society are profound. Qui tam lawyers not only support and elevate whistleblower claim, but also champion truth, justice, and fairness. Their dedication to uncovering and rectifying misconduct compels companies to reconsider engaging in fraudulent activities. There is no safety guaranteed, for a whistleblower can emerge and report fraud  from anywhere. Within whistleblowing, those who come forward are protected against retaliations, like wrongful termination, and in successful cases, win a portion of the funds. With these incentives and warnings in place, powerful companies reconsider trying to commit fraud. The False Claims Act serves as a powerful reminder to businesspersons to maintain accurate transactions and proper use of funds. The impact of successful qui tam cases sends a clear message: misconduct will be exposed and corrected. If you believe you may be a potential qui tam whistleblower, we encourage you to contact us. We value your integrity and are committed to fighting for you and the government.