This week’s Department of Justice “catch of the week” goes to Schlumberger Oilfield Holdings Ltd. (SOHL), a wholly-owned subsidiary of Schlumberger Ltd. On Wednesday, the oil services company agreed to enter a guilty plea and pay a $232,708,356 penalty for violating the International Emergency Economic Powers Act (IEEPA) by willfully facilitating illegal transactions and engaging in trade with Iran and Sudan. The monetary penalty includes a $77,569,452 criminal forfeiture and a $155,138,904 criminal fine. The criminal fine represents the largest criminal fine in connection with an IEEPA prosecution. 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.
Kansas City stadium whistleblower fired after exposing food safety concerns – The food safety manager in charge of Kansas City’s Kauffman and Arrowhead stadiums was fired last week, four months after he alerted city officials and media to several health violations, including mold in several of the ice machines, a rampant roach problem, and more. Washington Post
VA official vows action on any misconduct at Tomah facility – A top Veterans Affairs official pledged at a Senate hearing on opioids for military veterans that anyone guilty of misconduct at the Tomah VA hospital, where three deaths are being investigated, will be held accountable. Milwaukee Journal
Oppenheimer ordered to pay $3.75 million in broker fraud case – Wall Street’s self-regulator ordered Oppenheimer & Co. to pay $3.75 million for allegedly failing to properly supervise a broker who the regulator says defrauded dozens of clients and who also duped the producers of a Broadway musical. Wall Street Journal
Swiss bankers get probation for tax fraud – Two former Swiss bankers have avoided jail time for their roles in a tax fraud scheme that helped U.S. customers hide billions of dollars in assets. Washington Times
Zynga must face U.S. lawsuit alleging fraud tied to IPO — Zynga must face a lawsuit that accuses the gaming company known for its “FarmVille” game of defrauding shareholders about its prospects before and after its December 2011 initial public offering, including concealing declining user activity, how changes in a Facebook platform would affect demand, and inflating its 2012 revenue forecast. Reuters
– “De facto gag clauses…discourage employees from disclosing to regulatory and enforcement agencies information about threats to public health and safety, financial fraud, consumer safety, food safety, nuclear safety, transportation safety, and other vital public concerns. “
Government Accountability Project Petition for Rulemaking. Click here for more.
Schlumberger subsidiary agrees to plead guilty and pay $233M for violating US sanctions – Schlumberger Oilfield Holdings Ltd. agreed to enter a guilty plea and pay a $232,708,356 penalty for conspiring to violate the International Emergency Economic Powers Act by willfully facilitating illegal transactions and engaging in trade with Iran and Sudan. DOJ
Labor Department asked to ban gag clauses for whistleblowers – The Government Accountability Project along with a whistleblower attorney have called on the Department of Labor to work to block companies from requiring employees to sign pacts that curb their ability to report fraud to the government. Reuters
Europe fed up with corruption – “Prosecutors, judges and even political leaders themselves are, in much of Europe, becoming more serious about uncovering and punishing corruption.” FT
OXYwater owners found guilty of fraud — After two days of deliberations, a federal jury in Ohio found Thomas E. Jackson and Preston J. Harrison guilty of wire fraud, money laundering and misappropriating millions of dollars that investors poured into their sports-drink company. Columbus Dispatch
Bribery impacts 1 in 4 worldwide – “Paying bribes to access basic services is rife worldwide: our research shows that globally, it affects the lives of more than one in four people. Transparency Int’l
HMRC’s use of powers against whistleblower “indefensible” – Members of UK Parliament have severely criticized HM Revenue and Customs over its use of the Regulation of Investigatory Powers Act to examine the belongings, emails, internet search records and phone calls of their own solicitor, Osita Mba, and the phone records of his then wife to try to prove that a whistleblower had spoken to the Guardian. The Guardian
SCOTUS rules that opinions may be basis for securities fraud suits – Justice Elena Kagan wrote for the 7-justice majority in the Omnicare case that statements of opinion in securities filings are untrue only if they are not sincerely held but they may nonetheless be unlawfully misleading if they fail to disclose conflicting information. NYT
Maryland Senate passes expanded whistleblower legislation – The Maryland False Claims Act of 2015 would widen Maryland’s current false claims protections beyond its current limitations covering only healthcare fraud. Post-Examiner
OSHA fines New York MTA for harassing whistleblower – OSHA orders the transit authority to pay $50,500 to an employee who was retaliated against for speaking openly to health and safety inspectors. Crains
Michigan hospital to pay $4.5M to settle False Claims Act charges – The settlement resolves allegations that Portage Hospital’s Portage Health Home Care & Hospice submitted false claims to Medicare for unnecessary home health care services rendered by a staff physical therapist. DOJ
Former NJ housing authority manager files whistleblower retaliation action – Melody N. Villaneuva-Arroyo, the former procurement and contract manager for the Passaic Housing Authority, claims she was fired for objecting to a repair contract awarded to a construction company owned by former city councilman Wayne Alston. NJ.com
MTU America to pay $1.1M to resolve alleged environmental violations – The Rolls-Royce Power Systems subsidiary was charged with violating the Clean Air Act by selling 895 non-road, heavy-duty diesel engines without valid certificates of conformity with emission standards. DOJ
Fireman’s Fund to pay $44M to settle False Claims Act charges — The government alleged the insurance company knowingly issued insurance policies that were ineligible under the U.S. Department of Agriculture’s federal crop insurance program and falsified documents. DOJ
5th Circuit revives whistleblower’s claims of overbilling by coworkers – A unanimous 3-judge panel finds Justin Richardson’s 2013 suit against Texas-based Axion Logistics sufficiently alleged the company allowed employees to submit fraudulent timesheets and mileage logs for reimbursement. CA5
Big win for whistleblowers at Labor Department – The agency’s top whistleblower appeals board issues a 3-2 ruling setting forth the burdens of proof “making it easier for whistleblowers to prevail under numerous corporate whistleblower laws, including the Sarbanes-Oxley Act, Energy Reorganization Act, and the Consumer Safety Act.” NWC
Whistleblower files claims against JC Penney – Former part-time employee Robert Blatchford claims retaliation after reporting the retailer was overcharging customers. Fortune
Former Bechtel executive gets 42 months for Egypt Kickbacks – Asem Elgawhary, Bechtel Corp.’s former principal vice president, was sentenced to 42 months in prison for accepting $5.2M in a scheme to manipulate bidding for power contracts in Egypt. Bloomberg
Detroit-area physician pleads guilty for role in $3.6M Medicare fraud scheme — Kutub Mesiwala pleaded guilty to referring Medicare beneficiaries for home health services in exchange for illegal cash kickbacks. DOJ
–“I hope you have the courage…to clean up society so that there is no longer that stink of corruption.”
Pope Francis, on his visit to one of the most violent and drug-infested neighborhoods in Naples, urging residents not to let organized crime and corrupt politicians rob them of hope. Click here for more.
–“We felt we weren’t being heard within the organization…and we’re still not being heard. You have to reach out until someone hears you…you can’t go home and forget about it. We’re talking about veteran’s lives.”
Sheila Meuse, whistleblower and assistant director of Central Alabama Veterans Health Care System. Click here for more.