This week’s Department of Justice “catch of the week” goes to Deutsche Bank AG. Yesterday, the German-based bank and its UK-based subsidiary DB Group Services (UK) Limited agreed to pay more than $2.5 billion to settle US and UK charges relating to their role in manipulating the London Interbank Offered Rate (LIBOR). LIBOR is a leading benchmark interest rate used in financial products and transactions around the world. In addition to the monetary payout, DB Group Services agreed to plead guilty to wire fraud in connection with the scheme. And Deutsche Bank entered into a deferred prosecution agreement to resolve wire fraud and antitrust charges for its role in both manipulating US Dollar LIBOR and engaging in a price-fixing conspiracy to rig Yen LIBOR. Together, they will pay the DOJ $775 million in criminal penalties and another $1.744 billion in regulatory penalties and disgorgement — $800 million to the Commodity Futures Trading Commission (CFTC); $600 million to the New York Department of Financial Services (DFS); and $344 million to the UK Financial Conduct Authority. See DOJ Press Release.
Whistleblower Insider is written by the Constantine Cannon law firm team of experienced qui tam and whistleblower lawyers. It is updated daily to provide the latest whistleblower and fraud news and developments.
David Petraeus sentenced to two years probation – The former CIA director was sentenced to two years probation for leaking highly classified information to a biographer with whom he was having a sexual relationship – exposing what many say is a glaring double standard for whistleblowers prosecuted by the Obama administration. US News and World Report
NJ Transit pays conductor $700k to settle whistleblower suit – A NJ Transit conductor was awarded almost $700,000 after filing a federal whistleblower complaint in which he contended the agency retaliated against him after he saw a worker electrocuted and took off work the next day. NJ.com
Louisiana doctor pleads guilty to $56M home health care scheme — The doctor admitted he wrote false home health care certifications that were used in a multi-million-dollar Medicare fraud scheme where he wrote home health care referrals for Medicare beneficiaries he knew were not confined to their homes. FBI
Former top lottery official files whistleblower lawsuit — A former top finance official with the Georgia Lottery has filed a whistleblower lawsuit claiming that he was fired after refusing to present inflated sales projections to the lottery board in April 2014. Atlanta Journal
Whistleblower trauma, recovery and renewal – The Government Accountability Project gives helpful advice on the “six stages of whistleblowing” and how to support whistleblowers by changing the way in which many are treated for speaking up and telling the truth. GAP
US charges Quicken Loans with mortgage fraud — The DOJ sued Quicken Loans Inc. alleging the mortgage lender lied to the government when making hundreds of loans backed by the Federal Housing Administration between September 2007 and December 2011 that shouldn’t have been eligible for federal backing. NYT
– The U.S. “clearly has a two-tiered justice system when it comes to classified information…if you’re a person in a position of power or you’re politically well connected, you can leak with impunity.”
Jesselyn Radack, a Government Accountability Project lawyer who has represented several people prosecuted during the administration’s crackdown on leaks by low-level officials. Click here for more.
The SEC announced an award of more than a million dollars to a compliance officer who had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors. This is the second award the SEC has made to an employee with internal audit or compliance responsibilities, after the SEC’s August 2014 award of $300,000 to a company employee who performed audit and compliance functions.
Deutsche Bank to pay $2.5B to settle LIBOR rate-rigging charges – The payment will be made to US and British authorities to settle charges the bank helped manipulate the benchmarks used to set interest rates on trillions of dollars in mortgages, student loans, credit cards and other debt. NYT
Barry Bonds conviction overturned – “A federal appeals court Wednesday overturned former San Francisco Giant Barry Bonds’ felony conviction for obstructing justice, leaving the federal government without a single conviction after a years-long and multimillion-dollar effort to prosecute the home run king.” LA Times
More whistleblowers say health plans are gouging Medicare – “Federal court records show at least a half dozen whistleblower lawsuits alleging billing abuses in these Medicare Advantage plans have been filed under the False Claims Act since 2010.” NPR
“Flash Crash” whistleblower may see multi-million dollar award – The anonymous whistleblower who claims to have led the US to bring charges against alleged “flash crash” trader Navinder Singh Sarao could potentially reap millions under the CFTC’s Dodd-Frank whistleblower award program. Reuters
China names top 100 fugitives suspected of corruption – Photos of the suspects were splashed across two pages of the official China Daily newspaper, the latest effort in President Xi Jinping’s aggressive campaign to rein in graft. US News
CT dentist pleads guilty to $21M Medicaid fraud scheme – Mehran Zamani served as the front for Landmark Dental which was really being operated by Gary Anusavice who is a convicted felon, former dentist, and excluded Medicaid provider. FBI
This week’s “Whistleblower Spotlight” features Christopher Kirkpatrick, the 38-year old clinical psychologist who took his own life after being fired from the Tomah Veterans Affairs Medical Center for complaining about the treatment of his patients there. Kirkpatrick would appear to be just one of the scores of whistleblowers who have been retaliated against for stepping up to report on the gross mistreatment of our veterans within our failing VA health system.
– “It shows the incentives provided for whistleblowers are working well, and all the other controls and detection systems are failing miserably.”
Malcolm Sparrow, a health care fraud expert at Harvard’s John F. Kennedy School of Government, on the increasing number of whistleblower actions challenging fraud in the Medicare Advantage healthcare program. Click here for more.
Real Housewives of NJ star Jim Marchese scores millions in whistleblower payouts – The small mortgage firm he owns recently collected $8.5 million for helping spur the DOJ’s record $16.65B mortgage fraud settlement with Bank of America, and in 2007 he received $1.6M million after reporting his former employer, a Seattle pharmaceuticals firm now called CTI BioPharma Corp., allegedly defrauding Medicare. WSJ
SEC makes whistleblower award to compliance officer — It will be between $1.4M and $1.6M and will be the second award the SEC has made to an employee with internal audit or compliance responsibilities. SEC
Citizens Medical Center settles whistleblower suit for $21.75M – The Texas-based hospital will make the payment to settle charges it violated the False Claims Act by engaging in improper financial relationships with referring physicians. USAO-SDTX
Family Dermatology settles whistleblower suit for $3.25M – The dermatology practice group which operates a dermatopathology lab in Georgia and dermatology practices throughout the Eastern United States will make the payment to settle charges it violated the False Claims Act by engaging in improper financial relationships with several of its employed physicians. DOJ
Government joins whistleblower cases against HCR ManorCare — The healthcare company, which operates approximately 281 skilled nursing facilities in 30 states, is charged with violating the False Claims Act by submitting false claims to Medicare and Tricare for rehabilitation therapy services that were not medically reasonable and necessary. Corporate Crime Reporter
UK fines BofA Merrill Lynch $20M for reporting failures – The UK Financial Conduct Authority made the record fine (13.2 million pounds) for incorrectly reporting 35 million transactions and failing to report another 121,387 transactions between November 2007 and November 2014. Reuters
UK trader arrested for contributing to the 2010 Wall Street “flash crash” – The DOJ wants to extradite Navinder Singh Sarao on charges of wire fraud, commodities fraud and market manipulation in connection with the crash that wiped billions of dollars off the value of US shares in minutes. BBC