Companies made deals that could run afoul of U.S. whistleblower rules

Wells Fargo, Advanced Micro Devices and Fifth Third Bank have in recent years agreed to settlement deals that seek to muzzle former employees in ways that some lawyers said could violate U.S. whistleblower protection laws.

Five lawyers, including three who represent whistleblowers, said that the settlements appear aimed at blocking workers from airing their concerns and contain similarities to those used by other companies that ran afoul of government rules.

The deals by Wells Fargo, AMD, and Fifth Third Bank were among a dozen such corporate settlements reached between 2012 and 2015 that were reviewed by Reuters.

The companies each struck deals with departing workers that limit the employees' ability to receive money arising from any government investigations into their former employers. read more »

TCS settles Orange County lawsuit for USD 26 mn; shares down

UBS hedge fund whistleblower claims unfair dismissal

A former investment manager at UBS's hedge fund business O'Connor is claiming unfair dismissal and saying he was unfairly treated by the Swiss bank for whistleblowing.

Meraj Sepehrnia's claim against UBS is due to be heard at a London employment tribunal on September 6, according to court details released on Wednesday.

He claims he suffered a detriment or dismissal due to exercising his rights as a whistleblower, the details showed. He is also claiming unfair dismissal and a failure of employer to pay.  read more »

Penny-Stock Scammer Pleads Guilty to Fraud Hatched in Prison

A penny-stock swindler pleaded guilty to a $15 million scam prosecutors say he launched while still serving a 10-year prison sentence on an earlier fraud.

Edward Durante, 64, pleaded guilty Tuesday to a plot in which he used a network of unwitting brokers and investment advisers to sell shares in an online sweepstakes company called VGTel Inc. More than 100 victims were told that the shares, which Durante secretly controlled, would rise from $1 to as high as $50. The investors believed they were buying stock from the issuer, rather than from entities set up by Durante. read more »

SEC Charges 71 Municipal Issuers in Muni Bond Disclosure Initiative

The Securities and Exchange Commission today announced enforcement actions against 71 municipal issuers and other obligated persons for violations in municipal bond offerings. 

The actions were brought under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative, a voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents.  The initiative offered favorable settlement terms to municipal bond underwriters, issuers, and obligated persons that self-reported certain violations of the federal securities laws.  Obligated persons are typically nonprofit entities such as hospitals and colleges that borrow the proceeds of bond issuances and are obligated to pay principal and interest on the bonds. read more »

Online Public School Founder Admits to $8M in Tax Fraud

The founder and former CEO of an online public school that educates thousands of Pennsylvania students pleaded guilty Wednesday to federal tax fraud, acknowledging he siphoned more than $8 million from The Pennsylvania Cyber Charter School through for-profit and nonprofit companies he controlled.

In entering his plea, Nicholas Trombetta, 61, who headed the school, acknowledged using the money to buy, among other things, a Bonita Springs, Florida, condominium for $933,000, pay $180,000 for houses for his mother and girlfriend in Ohio, and spend $990,000 more on groceries and other items. 

Marinello beauty schools insurer pays $8.6 million to settle student loan suit

The insurance carrier for the now-defunct Marinello Schools of Beauty has paid the United States more than $8.6 million to resolve allegations the schools received federal student loan funding for ineligible students who received bogus high school diplomas.

In a whistleblower lawsuit, B&H was accused of allegedly allowing students seeking the diplomas to take their tests without proctors, to use their phones and workbooks to look up answers during tests and to repeat the same tests until they passed. Under U.S. Department of Education regulations, a student must have a valid high school diploma or its equivalent to receive federal student loans. read more »

DOJ Gets Kickback Case Revived Against Medical Supplier

A Massachusetts federal judge responded to U.S. Department of Justice prodding by reviving a False Claims Act suit over health product supplier CCS Medical Inc.'s alleged illicit acceptance of kickbacks, concluding Wednesday that a safe harbor may not apply. read more »

A.G. Schneiderman Announces Joint State And Federal $2.95 Million Settlement With Hospitals In Mount Sinai Health System

Attorney General Eric T. Schneiderman and United States Attorney Preet Bharara today announced that three hospitals in the Mount Sinai Health System are paying a total of $2.95 million to resolve allegations that the hospitals knowingly retained over $844,000 in overpayments made by Medicaid in violation of the federal and New York False Claims Acts.  Knowing retention of an overpayment from the government for more than sixty days is known as a “reverse false claim” and is a violation of both federal and state false claim acts read more »

Ex-L'Oreal Atty Says Whistleblowing Rules Same For Lawyers

A former top L’Oreal USA lawyer who claims he was fired for refusing to file patent applications for shoddy inventions told the Third Circuit Tuesday that the cosmetics giant is improperly holding whistleblowing attorneys to a higher burden of proof than other employees.

The assertions by Steven Trzaska came in his reply brief to L’Oreal’s argument that the federal appeals court should uphold the dismissal of his April 2015 lawsuit detailing how he clashed with research executives amid companywide pressure to simultaneously improve the quality and output of patent applications for new products. read more »

Omnicare Can't Kick Whistleblower's $421M FCA Suit

 A Massachusetts federal judge on Tuesday refused to let Omnicare Inc. escape from two whistleblowers’ False Claims Act suit accusing the health care company of entering into a six-year kickback agreement with drug manufacturer Organon, concluding that too many questions remain about its conduct read more »