Reports of Barclay’s Chief Executive Joes Staley’s efforts to locate and unmask the company whistleblower have apparently kicked off a major investigation by the Department of Justice to see if there was a violation of the Dodd Frank Act’s whistleblower protections. The letter was critical of the hiring of a senior bank exec. The New York Post has reported that Staley asked bank staff to contact postal inspectors to trace the author of the whistleblower letters sent to Board members after they hiring of Tim Main.

Barclay’s Board concluded that Staley had made an “honest” mistake believing he could identify the whistleblower, whose identity has not been discovered. They reprimanded Staley and adjusted his compensation significantly. Depending on what happens with the numerous investigations now pending, this may not be enough, especially of the scandal has a significant effect on the stock price.

Jeffrey Newman represents whistleblowers

Lawrence Young, D.P.M a Detroit podiatrist has been charged with participating in a $13.9 million healthcare fraud scheme in which he is accused of performing unnecessary foot surgeries on patients.

Prosecutors unsealed an indictment Thursday revealing that , Young has been charged with six counts of healthcare fraud, says the U.S. Attorney’s Office for the Eastern District of Michigan.

Young is accused of making fraudulent claims for unneeded foot surgeries and other podiatric services that he never delivered. According to the indictment, Young owned two Michigan practices, Dearborn Podiatric Services and Georgetown Podiatric Services.

Habert Management corporation of Alabama has agreed to pay $40 million to settle allegations that  members of Harbinger’s investment manager failed to pay millions in New York State tax on performance income for several years. “Our investigation uncovered a brazen and deliberate decision to avoid paying millions in taxes owed to New York State,” said Attorney General Schneiderman. “Harbert Management made a clear choice to skirt the rules and as a result, ordinary New York taxpayers were left footing the bill. On tax day, this sends a forceful reminder to businesses that if they think they can get away with tax evasion in New York, they should think again.”

The settlement is the largest tax-related recovery by the Attorney General’s office, resulting from an action filed under the New York False Claims Act, which was amended to cover tax claims in 2010 in a bill sponsored by then-State Senator Eric Schneiderman.

When businesses operate both inside and out of New York City and State, they must apportion for tax purposes that part of their income derived from or connected with New York.  In 2001, Harbert Management Corporation, an investment management company based in Birmingham, Alabama, sponsored and organized the Harbinger Capital Partners Master Fund I Limited hedge fund, hiring Philip Falcone as its primary investment decision-maker.

The U.S. Commerce Department has launched an investigation to see whether a flood of aluminum imports from China and elsewhere was compromising U.S. national security.

The U.S. investigation seeks to understand the rising tide of aluminum imports. The Commerce Department is investigating allegations that Chinese companies are dumping aluminum foil into the U.S. market below cost and benefiting from unfair subsidies.Part of the justification for the investigation was that U.S. combat aircraft such as the Lockheed Martin F-35 joint strike fighter and the Boeing F/A-18 Super Hornet require high-purity aluminum that is now produced by only one smelter, Century Aluminum Co.

He said that company could probably meet U.S. peacetime needs, but not if the United States needed to ramp up defense production for a conflict. The same high-purity aluminum goes into armor plating for military vehicles and naval vessels, he said.The investigation will determine if there is sufficient domestic aluminum capacity to meet U.S. defense needs and will also assess the effects of lost jobs, skills and investments on national security, Ross said.

Indiana University Health Inc. (IU Health) and HealthNet Inc., have agreed to pay $18 million to settle allegations that they violated federal and state false claims laws by engaging in an illegal kickback scheme related to the referral of HealthNet’s OB/GYN patients to IU Health’s Methodist Hospital. The United States alleged that from May 1, 2013 through Aug. 30, 2016, IU Health provided HealthNet with an interest-free line of credit, the balance of which consistently exceeded $10 million. United States further alleged that HealthNet was not expected to repay a substantial portion of this loan and that this financial arrangement was intended to induce HealthNet to refer its OB/GYN patients to IU Health’s Methodist Hospital.Under the settlement agreement, IU Health and HealthNet each will pay approximately $5.1 million to the United States and $3.9 million to the State of Indiana.

The Anti-Kickback Statute prohibits, among other things, the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal health care program, such as Medicaid. Claims submitted to federal health care programs in violation of the Anti-Kickback Statute are also false claims under the False Claims Act.

The settlement resolves a lawsuit filed in federal court in Indianapolis, Indiana, under the qui tam provisions of the False Claims Act, which permit private individuals to bring a lawsuit on behalf of the United States for false claims and to share in any recovery. The lawsuit was filed by Dr. Judith Robinson, who formerly held a number of positions at both Methodist Hospital and HealthNet. Under the settlement, Dr. Robinson, represented by The Hoyer firm, will receive approximately $2.8 million out of the federal share of the recovery.

There has been a significant increase in the number and amount of bribes of foreign officials and their families by American businesses and their subsidiaries to get new business in other countries. Part of the reason may be tied to a decrease in US and Western European military spending so companies are relying on sales to foreign governments and are using bribes as a door opener for that business. However, the Department of Justice has announced that it will vigorously investigate and prosecute cases of foreign bribery to enforce the Foreign Corrupt Practices Act(FCPA).

In 2016, there were fouor major FCPA enforcement actions: Teva Pharmaceutical (Israel) $519 million; Odebrecht (Brazil); Och-ziff (United States) $412 million and VimpelCom (Holland) $397.6 million.

In one case, Three Texans and a Mexican businessman pleaded guilty to paying more than $2 million in bribes to Mexican officials for government-aircraft maintenance contracts. Kamta Ramnarine, 69, of Brownsville, is the former owner and general manager of Hunt Pan Am Aviation Inc., which provides airplane maintenance and fueling services at Brownsville-South Padre International Airport. Daniel Perez, 69, also of Brownsville, owned a stake in Hunt Pan Am Aviation from 1993 to 2010, according to federal charges unsealed Dec. 20 and publicized Tuesday by federal prosecutors.

Quest Diagnostics Inc. will pay $6 million to resolve a lawsuit by the United States alleging that Berkeley HeartLab Inc., of Alameda, California, violated the False Claims Act by paying kickbacks to doctors and patients to induce the use of Berkeley for blood testing services and by charging for medically unnecessary tests. Quest, which is headquartered in Madison, New Jersey, acquired Berkeley in 2011, and ended the conduct that gave rise to the settlement.According to the government’s complaint, Berkeley paid kickbacks to referring physicians disguised as “process and handling” fees. The complaint also alleged that Berkeley paid kickbacks to patients by routinely waiving copayments owed by certain patients who were legally required to pay for part of their tests. Allegedly, Berkeley paid the kickbacks to induce both the physicians and patients who received them to choose Berkeley over other laboratories. The government’s complaint further alleged that these illegal practices resulted in medically unnecessary cardiovascular tests being charged to federal healthcare programs.

Physicians refer their patients to independent laboratories like Berkeley to conduct tests on blood samples. According to the government’s complaint, Berkeley paid kickbacks to referring physicians disguised as “process and handling” fees.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federally funded programs. The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient. The Anti-Kickback Statute also prohibits routinely waiving patient copayments to ensure that patients are appropriately incentivized to refuse unnecessary tests.

Johnson & Johnson revealed to investors on Monday its Janssen Biotech Inc. is under investigation by the United States Department of Justice regarding i a False Claims Act case about  two of its arthritis drugs, while also reporting a separate probe by the U.S. attorney’s office in Massachusetts over copayment support programs.

The company said in a 10-K filing that Janssen Biotech in March received a civil investigative demand from the DOJ over a False Claims Act investigation. The request concerned “management and advisory services provided to rheumatology and gastroenterology practices that purchased Remicade or Simponi Aria,” two biologic prescription drugs used to treat rheumatoid arthritis, among other conditions.

Remicade is one of J&J’s top-selling drugs, used to treat arthritis and a number of other immune-mediated inflammatory diseases, according to J&J. Sales of the drug in 2015 made up 9.4 percent of the company’s total annual revenue, bumping up to approximately 9.7 percent of the company’s total revenues the following year, according to the company’s 2016 annual report.

Carecore National LLC, part of evicore a benefits management company has agreed to pay $54 million to settle a False Claims Act whistleblower lawsuit for improperly approving prior authorization requests for hundreds of thousands of diagnostic procedures paid for with Medicare and Medicaid funds. Acting U.S. Attorney Joon H. Kim said: “Benefit management companies are supposed to determine whether medical diagnostic procedures paid for with Medicare and Medicaid funds are necessary and reasonable. Instead, CareCore blindly approved hundreds of thousands of medical procedures over a period of many years, leaving Medicare and Medicaid to foot the bill. This lawsuit and settlement shows our commitment to ensuring that fraud and waste involving federal funds will be identified and stopped.”

The United States Complaint-In-Intervention (the “Complaint”) alleges that starting in as early as 2005, CARECORE, which performs prior authorization review for diagnostic procedures on behalf of many insurers, including those providing insurance through Medicare Part C and Medicaid Managed Care, was unable to review prior authorization requests in a timely fashion, and in order to avoid contractual penalties for failing to timely process the requests, CARECORE instituted a practice of improperly approving prior authorization requests. By 2007, CARECORE had formalized this practice into the “PAD program.” Between 2007 and 2013, through the PAD program, CARECORE improperly authorized over 200,000 diagnostic procedures.

The Complaint in this case was filed under the federal False Claims Act, which punishes violators who submit false claims or make false statements material to claims submitted to entities administering programs funded by the government. The allegations of fraud stated in the Complaint were first brought to the attention of the government by a whistleblower, who filed a lawsuit under the qui tam provisions of the False Claims Act. Those provisions allow private parties who have knowledge of fraud committed against the government to file suit on behalf of the government and share in any recovery. The United States may then intervene and file a complaint, as it did here.The whistleblowers in this case were represented by Seeger Weiss LLP and Milberg LLP.

Here’s a sad irony to the world-wide cyber-security attacks which have disrupted hospitals, railway systems, universities and millions of computers: the assault has resulted in a massive increase of the value of cyber security company stocks. In addition, as the attacks are expected to increase the jump in the stock price is also expected to continue to rise. Proofpoint had a 9% spike, as did FireEye this week. Cisco Systems which generates over $2 billion a year from its security business is up 3% and rising.

Security spending is high on the list of priorities for corporations of every kind and as the threat is growing so are the budgets for security. While investors haven’t made a killing in buying cybersecurity stocks yet, this may change soon. Proofprint provides email security and is likely to be attractive to companies who want to protect their communications.

Financial Freedom has agreed to a settlement with the United States of more than $89 million to resolve allegations that it violated the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) in connection with its participation in a federally insured Home Equity Conversion Mortgages (HECM) or ‘reverse mortgage’ program, the Justice Department announced today. Financial Freedom is headquartered in Austin, Texas.

Through ‘reverse mortgage’ loans, older people are able to access the equity in their homes by borrowing money against the equity they have built in their home. To encourage reverse mortgage loans, the FHA protects lenders from loss by providing mortgage insurance. Under FHA’s program, a loan becomes due and payable when the home is sold or vacant for more than 12 months or upon the death of the homeowner, whichever comes first. The lender is repaid the amount of the loan, including the costs of servicing the loan and any interest that accrues on lender expenses after a loan becomes due and payable. FHA will reimburse a lender that is unable to recoup the full amount of the loan. In order to claim recoupment, the servicer is required to meet a number of regulatory requirements and deadlines.

The United States alleged that Financial Freedom sought to obtain insurance payments for interest from FHA despite failing to properly disclose on the insurance claim forms it filed with the agency that the mortgagee was not eligible for such interest payments because it had failed to meet various deadlines relating to appraisal of the property, submission of claims to HUD, and pursuit of foreclosure proceedings. As a result, from March 31, 2011 to August 31, 2016, the mortgagees on the relevant reverse mortgage loans serviced by Financial Freedom allegedly obtained additional interest that they were not entitled to receive.

Benjamin Poehling  a former official with UnitedHealth filed a whistleblower lawsuit saying that Medicare Advantage made tens of billions of dollars each year in improper payments to insurers. The suit alleges that the UnitedHealth  created ways to make patients look sicker than they were by scouring their health records and manipulating the diagnosis codes. The sicker the patient, the more UnitedHealth was paid by Medicare Advantage. The Justice Department Joined the case filing its own complaint against UnitedHealth over allegations of inflated risk adjustment payments.

Two Missouri hospitals will pay the United States $34,000,000 to settle allegations that they violated the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today.  The two Defendants are Mercy Hospital Springfield f/k/a St. John’s Regional Health Center, and its affiliate, Mercy Clinic Springfield Communities f/k/a St. John’s Clinic. Among other health care facilities, the Defendants operate a hospital, clinic, and infusion center in Springfield, Missouri.  The allegations i the False Claims Action said that the Defendants submitted false claims to the Medicare Program for chemotherapy services to patients referred by oncologists whose compensation was based in part on a formula that improperly took into account the value of their referrals of patients to the infusion center operated by the Defendants.  Federal law restricts the financial relationships that hospitals and clinics may have with doctors who refer patients to them.

“When physicians are rewarded financially for referring patients to hospitals or other health care providers, it can affect their medical judgment, resulting in overutilization of services that drives up health care costs for everyone,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”

The lawsuit was originally filed by a whistleblower, Dr. Viran Roger Holden, a physician who was employed by one of the Defendants, under the qui tam provisions of the False Claims Act.  Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  Dr. Holden will receive $5,440,000 from the recovery.

A whistleblower law suit brought under the New York State’s False Claims Act has resulted in a settlement of $40 million against a financial investment firm Harbert Management Corp of Alabama. The case alleged that Harbert earned hundreds of millions of dollars through an office in New York for which it paid no income tax to New York, while Harbert paid all Alabama taxes for all of its income. The case raises the question as to why New York is one of only a few states that allows for whistleblower cases to recover unpaid income and excise taxes. The other states should follow New York’s lead.

According to court papers, Harbert organized Harbinger Capital Partners Offshore Managers, LLC, a $26 billion hedge fund which operated out of an office at 555 Madison Avenue in Manhattan. Even though substantial earnings came in through Harbinger, it allocated zero percentage of earnings to New York and it filed no state tax return. The company asserted a position that it had no “nexus” to New York state because it had no income deriving from New York sources. However, Harbinger made hundreds of millions by shorting the subprime mortgage market in 2007.

When business operate both inside and out of New York City and State, they are required to apportion for taxes that part of their income coming from or connected to New York.

The Securities and Exchange Commission (SEC) has charged four men  for alleged involvement in an insider trading scheme that used confidential government information regarding Medicare reimbursements From the Centers for Medicare and Medicaid Services (CMS). Christopher Worrall, an employee at (CMS), allegedly gave confidential information to David Blaszczak, a former co-worker who later worked as a political intelligence analyst.

Worrall allegedly told Blaszczak three different times about pending CMS reimbursement decisions that could affect stock prices. Prosecutors allege that Blaszczak passed that information on to two hedge fund analysts who paid him as a consultant, Theodore Huber and Jordan Foge, who made $3.9 million from the insider trades.Mr. Blaszczak, a former employee at the agency and founder of Precipio Health Strategies, was accused of pumping a friend at the agency for market-moving information that he passed to his clients at Deerfield, an unsealed indictment said.In his interactions with the hedge fund partners, Mr. Blaszczak bragged about his access to the inside information. In an email message, he said his analysis differed from that of one of his competitors because that competitor “doesn’t know anyone at cms. His guesses are just wild random guesses,” according to a separate complaint filed by the SEC.Mr. Blaszczak  passed the information to his hedge fund clients, sometimes within minutes of the communications, prosecutors said.

The information involved tips about potential changes in government policy and regulations for things such as radiation therapy and kidney dialysis and how these policies would affect publicly traded companies.

The EB-5 investment program, known as the EB-5 visa-for-investment program, is demonstrating a dramatic spike in fraud  in  EB-5 projects. For example 2016 , the Securities and Exchange Commission brought enforcement actions against  $1 billion worth of fraudulent EB-5 projects. A majority of the fraud involved Chinese investors, including a $136 million EB-5 real estate project. According to the U.S. Citizenship and Immigration Services (USCIS), the EB-5 program resulted in $8.7 billion in foreign capital into the United States since 2012.

The SEC has a Whistleblower Program, in which private citizens may receive a reward for providing the SEC with original information about securities fraud, including EB-5 fraud. If the SEC uses a whistleblower’s information to bring a successful enforcement action, the whistleblower is eligible to receive 10% to 30% of the monetary sanctions collected as an award. One whistleblower received over $14 million for reporting EB-5 fraud.

Since the enactment of the whistleblower program, the SEC has paid more than $150 million to whistleblowers.