Whistleblowers rewarded by large payments for exposing fraud at work

Posted
by Michael Heygood

$51.5 million for exposing illegal marketing of drug by Pfizer

In September 2009, when Pfizer agreed to pay $2.3 billion to settle civil and criminal allegations that it had illegally marketed four drugs—Bextra, Geodon, Zyvox, and Lyrica— for non-approved uses, the six whistle-blowers who helped the government pursue those claims received $102 million for their participation in the civil investigation. One of the whistleblowers, John Kopchinski, a former sales representative for Pfizer, received $51.5 million for his information involving the marketing of Bextra.

Kopchinski first complained to Pfizer management about aggressive promotion of Bextra far beyond the uses approved by FDA. However, his concerns were simply brushed aside. Kopchinski alleged that Pfizer paid a $50 bounty to sales representatives for getting a doctor to add Bextra to the standard care for patients before and after surgery. These care protocols would direct patients to take Bextra, often at high doses, a few days before a knee operation, for instance, and then afterward to control pain. The FDA had rejected a company application to market the drug for such uses because its benefits were outweighed by its risks, particularly cardiovascular problems. According to Kopchinski, he blew the whistle because, “you have to live with yourself when you look at yourself in the mirror.”

$96 million for exposing dangerous problems at manufacturing plants

Cheryl D. Eckard was a quality manager at GlaxoSmithKline when she warned the company about potentially dangerous problems at certain manufacturing plants. The company fired her instead of addressing the problems.

Eckard filed a lawsuit in federal court under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. Her lawsuit led to a subsidiary of GlaxoSmithKline agreeing to plead guilty to charges relating to the manufacture and distribution of certain adulterated drugs. The resolution includes a criminal fine and forfeiture totaling $150 million and a civil settlement under the False Claims Act and related state claims for $600 million. For her help, Eckard received approximately $96 million from the federal government’s share of the settlement.

$14 million for helping SEC recover investor funds

Earlier this year, the SEC awarded $14 million to a Wall Street whistleblower who alerted the SEC to illegal activity, quickly allowing the government agency to assess a fine and recover a large amount of investor funds. The whistleblower provided information and assistance that allowed the SEC to investigate an enforcement matter more quickly than otherwise would have been possible. Less than six months after receiving the whistleblower’s tip, the SEC was able to bring an enforcement action against the perpetrators and secure investor funds.

The SEC’s Office of the Whistleblower was established in 2011 as authorized by the Dodd-Frank Act. The whistleblower program rewards high-quality original information that results in an SEC enforcement action with sanctions exceeding $1 million, and awards can range from 10 percent to 30 percent of the money collected in a case. By law, the SEC must protect the confidentiality of whistleblowers and cannot disclose any information that might directly or indirectly reveal a whistleblower’s identity

Thinking about blowing the whistle?

Anyone who has information that a business or person has knowingly submitted or caused the submission of false or fraudulent claims to any branch of the United States government can potentially help file and pursue a lawsuit under the False Claims Act. The “whistleblower” (called a “relator”) does not have to have been personally harmed at all. The relator just needs to be aware of the false or fraudulent conduct. If money is recovered—whether from a settlement between the parties or a court judgment—the whistleblower who helped initiate the lawsuit can potentially recover 10% to 30% of the total amount recovered.

The lawyers at Heygood, Orr & Pearson represent clients who have witnessed fraud first-hand and wish to file a “qui tam” or whistleblower lawsuit against the corporations or individuals who were responsible. For example, our lawyers successfully negotiated a $1.75 million award for a whistleblower in a large tax fraud case.

In addition, Heygood, Orr & Pearson is AV-rated, the highest legal and ethical rating available from the leading law firm rating service. Our partners Michael Heygood, Jim Orr, and Eric Pearson are all Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization. Mr. Heygood and Mr. Orr are additionally Board Certified in Civil Trial Advocacy Law by the National Board of Trial Advocacy. Our partners been voted by their peers as “Super Lawyers” in the state of Texas for several years in a row.*

The government has recovered billions as a result of False Claims Act lawsuits, and hundreds of millions have been paid to the private whistleblowers that made the lawsuits possible. If you have questions about how to pursue a claim under the False Claims Act, please let us know. You can reach us by calling our toll-free hotline at 1-877-446-9001, or by filling out our free legal consultation form on this page.

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Michael Heygood, James Craig Orr, Jr. and Eric Pearson were selected to the Super Lawyers List, a Thomson Reuters publication, for the years 2003 through 2013.