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Top 5 Biggest Whistleblower Settlements of 2024
The False Claims Act and Rewards for Whistleblowers
False and fraudulent claims submitted to the federal government have cost taxpayers anywhere between $213 billion and $521 billion annually and possibly more.[1] Companies in a wide range of industries have knowingly submitted inflated claims or engaged in illegal conduct to obtain money from the government. Defense contractors, health insurance companies, pharmaceutical manufacturers, healthcare providers, and publicly traded companies have all been successfully held accountable with the help of whistleblowers under the False Claims Act (FCA).
Intended to uphold the integrity of federal programs, the False Claims Act holds companies violating the FCA accountable by having them pay up to treble damages as punishment for defrauding the federal government. Individual whistleblowers whose respective insider information substantially contributes to an action can receive between 15 and 30 percent of the final settlement amount as a whistleblower reward which each year in aggregate is often hundreds of millions of dollars if not, billions of dollars. With only a few billion dollars of recovery each year under the FCA, hundreds of billions of frauds are left unchecked, with billions of dollars of whistleblower awards left on the table.
5 Biggest Whistleblower Settlements of the Year
Whistleblowers are highly valued by the government because of their insider knowledge of the internal operations of companies committing fraud. The government cannot combat fraud effectively without well positioned insiders coming forward to expose the schemes. Listed below are five of the biggest False Claim Act claims settled this year and the large payouts received by the respective individuals as whistleblower awards.
$950 Million Settlement – RTX Corporation (formerly Raytheon Technologies Corporation)[2]
Brown, LLC represented the whistleblower in the biggest aggregate whistleblower settlement of the year to date. Raytheon is one of the most important legacy US defense contractors with an annual revenue of more than $68 billion. Among the products Raytheon supplies are highly advanced radar systems and PATRIOT missiles. The aggregate settlement involved various components including a $428 million False Claims Act settlement. The FCA case involved defense contractor fraud, where the company inflated its costs on a cost-plus contract to obtain fundings it was not entitled to.
In a costs plus contract the company is entitled to a fixed percentage of profit over its reported costs and by inflating its costs it wrongfully inflates its profits. This was reported to be the second biggest defense contractor qui tam of all time thanks in part to the relator, the whistleblower law firm of Brown, LLC and the hard work of the government. Its particularly important for vigilant insiders to step forward and report schemes like this because often times the contracts are no bid contracts because of the unique product the defense contractor offers to the government.
Other components of the case that settled in aggregate but separately from the FCA involved foreign bribery. The company hid these activities from the US Department of Defense and inflated the prices it charged the government. Bribing a foreign official is a violation of the Foreign Corrupt Practices Act (FCPA) and there’s various whistleblower programs that one can avail themselves of to invoke the FCPA, such as the SEC whistleblower program for publicly traded companies.
The whistleblower represented by Brown, LLC received millions of dollars as a whistleblower reward.
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$106.8 Million – Walgreens Boots Alliance Inc.[3]
Walgreens is the second largest retail pharmacy chain in the US, earning more than $91 billion in 2023. Two brave local pharmacy managers came forward as whistleblowers to expose the company’s practice of allegedly billing Medicare and Medicaid for prescriptions the company processed but for which it never dispensed the medication.
This alleged violation of the False Claims Act came to light only because the two pharmacy managers contacted whistleblower attorneys and filed lawsuits on the government’s behalf to expose the alleged fraud and recover the funds obtained by Walgreens.
Each of the whistleblowers will receive large payments as their share of the FCA settlement. The Walgreens pharmacy manager in Texas will receive $14,918,675 and another in New Mexico will receive $1,620,000 as their share of the FCA settlement.
$90 Million – Humana Inc.[4]
Humana is one of the country’s largest health insurance companies, earning over $106 billion in 2023. Unlike the other four FCA settlements in our article the Department of Justice opted not to intervene in the litigation, so the litigation was handled by a private whistleblower law firm which is what is contemplated under the False Claims Act and why it’s essential to have one of the best whistleblower law firms to prosecute the case.
The whistleblower, a former Humana actuary, exposed that Humana allegedly exaggerated the value of its Medicare Part D coverage in its bid to obtain a Medicare contract, but delivered far less insurance coverage to plan participants than required by the contract. The FCA lawsuit alleged that Humana pocketed the difference and even maintained a separate set of account books until an investigation began.
Since the DOJ did not intervene in the case, the False Claims Act provides that the whistleblower may receive a larger share of the settlement.
While the exact amount he will receive is undetermined as of yet, the whistleblower is eligible to receive up to 30 percent, or a $27 million whistleblower award.
$60 Million – Oak Street Health (a subsidiary of CVS Health)[5]
Oak Street Health is a chain of primary care clinics purchased by CVS in 2012. The alleged False Claims Act violation here involved Oak Street Health’s practice of rewarding independent insurance agents and consultants in exchange for steering their clients to services at Oak Street clinics. Oak Street Health allegedly paid $200 to the insurance agent whose steered clients selected Oak Street Health services.
Paying kickbacks to insurance agents in exchange for steering seniors to its primary care clinics allowed Oak Street to allegedly bill Medicare for reimbursement. The alleged kickbacks were exposed by the president of an insurance agency Oak Street approached with the kickback offer, which shows how sometimes outsiders may be eligible to receive a whistleblower award. Also, kickbacks are prohibited under the Anti-Kickback Statute (AKS) because it creates the appearance of self-interest, if not actual self-interest, which detrimentally affects medical judgment. Is the patient referred to the derivative location for the best interest of the patient or for the kickback itself?
With the legal services of an experienced whistleblower law firm, the whistleblower’s share of the settlement proceeds will be a $9.9 million whistleblower reward.
$47 Million – ChristianaCare Health System[6]
ChristianaCare Health Systems is a Delaware-based hospital group accused of violating the False Claims Act by supplying unaffiliated neonatologists and surgeons with support services at no charge as an incentive to induce the doctors to refer their patients to a ChristianaCare-owned hospital rather than to a competitor. The actual costs for these services was allegedly bundled into the billing codes submitted to Medicare and Medicaid.
This in-kind payment arrangement constitutes an illegal kickback scheme under the FCA. The hospital’s chief compliance officer blew the whistle on this illegal practice by working with a whistleblower attorney who filed a qui tam lawsuit which was then taken over by the Department of Justice. The expected share of the settlement to go to the whistleblower totals $12,112,500.
With a few months to go to close out 2024 will another big whistleblower settlement come along or will Brown, LLC be the king of the hill for participating in the aggregate $950 million settlement. One thing is for sure, with the estimated hundreds of billions of fraud each year, even if Brown LLC is in the lead for the biggest settlement, its just a fraction of the fraud out there and if you’re aware of a large scale fraud against the government, you should speak with an experienced whistleblower attorney to learn your rights. Brown, LLC will answer all your questions and supply reliable legal advice about initiating and further pursuing a False Claims Act complaint.
[2]US Department of Justice Office of Public Affairs
[3]US Department of Justice Office of Public Affairs
