Did you know the Department of Justice introduced a new IT cyber security false claims initiative in 2021?
You might benefit from this IT cyber security false claims program if you report government contractors and grantees who didn’t protect sensitive electronic data from hackers. Reporting such activities in the right way could entitle you to a monetary reward.
What kinds of misconduct is covered by the government’s IT cyber security false claims initiative?
Broadly speaking, it falls into two categories. The first concerns government IT contractors, consultants and auditors who were supposed to provide protection against unauthorized access to government networks, hardware, devices, computer systems, software and electronic files and who knowingly provided substandard cyber security products or monitoring services and then submitted false claims to the government.
The other involves ordinary government contractors and grant recipients, such as those in the defense, aerospace, NASA, GSA and healthcare industries, who don’t meet acquisition and contracting regulations (like FARS, DFARS , NASA FARS, NIST, CMMC, FedRAMP, and HIPAA) requiring them to adequately monitor and provide a certain level of security for the sensitive government data they handle when performing under their contracts. Often the data at stake is unclassified controlled technical information (UCTI), sensitive but unclassified information (SBU), personally identifiable information (PII), personal health information (PHI), or other types of confidential information.
Who might be in a position to bring a cyber security case against an IT Contractor?
The ideal combination is someone who is knowledgeable about the IT products and services, the regulatory and contractual requirements, and the facts concerning the fraud, including, possible security breaches and the failure to accurately report them when submitting false claims to the government. For example, someone who works in a cyber security, compliance and controls unit of a government contractor may be in a good position to bring a successful case.
What do you need to do to benefit from the government’s cyber security fraud initiative?
You can bring a “qui tam” lawsuit under the False Claims Act against the contractor or grantee. If your case is successful and the defendant returns money to the government, you could be entitled to between 15% and 30% of the recovery. To do so, you must hire an attorney and file a lawsuit in federal court. If you even suspect some organization is submitting false claims to the government and think you may want to report it you should immediately contact an experienced and trusted whistleblower attorney to protect your rights.
NYC whistleblower attorney Timothy J.
McInnis, and Chicago attorneys Stephen B. Diamond and Tony Kim, jointly announced a $2.5 million settlement against Call One, Inc., a Chicago-based provider of telecommunications
services. The settlement resolves allegations contained in a qui tam whistleblower complaint that had been led under seal in September 2018 in the Circuit Court of Cook County Illinois and ordered unsealed on January 25, 2021, by Circuit Judge Jerry A. Esq
The complaint, brought under Illinois’ False Claims Act by two former employees, alleged that Call One failed to collect and remit state taxes for telecommunications services. Specially, the ex-employees alleged that Call One failed to pay telecommunications excise taxes, simplified municipal telecommunications taxes, and telecommunications infrastructure maintenance fees on contracts with some of its sales tax-exempt customers, such as municipalities.
The State of Illinois, through the Of ex of the Attorney General, joined in the lawsuit, according to a notice of intervention led on January 22, 2021. The Attorney General’s of ex also negotiated the terms of the settlement, noted Attorney McInnis.
Under the terms of the Settlement Agreement, which became effective on January 21, 2021, Call One was to pay the State $2.5 million by January 22, 2021. Further, according to its terms, the two former employees collectively are to receive 15% of the settlement amount shortly after it is paid to the State and they can petition the court for up to a total of 25% within 21 days.
The former employees can also seek reimbursement for reasonable attorneys’ fees and expenses in a separate petition on or before that date, stated Attorney Diamond. All three attorneys for the whistleblowers express their appreciation to the State, and its attorneys and representatives in the Of ex of the Attorney General and Department of Revenue, for the decision to intervene in the case and see it through to a successful resolution.
The case is captioned, State of Illinois ex rel. John Havis and Robert Kintz v. Call One, Inc., Index
No. 2018 L 010085, Circuit Court of Cook County, Illinois, County Department, Law Division.
For additional information, please contact Timothy J. McInnis, Esq., of McInnis Law, at (212) 292-4573
New York, NY and New Haven, CT whistleblower attorneys Timothy J. McInnis and Charles Goetsch jointly announced a $1,318,456 settlement against Verra Mobility Corporation, an Arizona-based provider of transportation technology
goods and services, and related subsidiaries. The settlement resolves allegations in a qui tam
whistleblower complaint filed under seal in June 2020 in NY State Supreme Court and
unsealed effective November 30, 2021, by order of Justice James d ‘Auguste.
The complaint, brought under NY State’s False Claims Act by a former master electrician
employee, alleged Verra defrauded NYC DOT by installing school zone speed cameras that did
not comply with DOT conduit depth specifications and other electric codes, and by erecting
unnecessessary new poles where existing poles should have been used.
NYC, through its Corporation Counsel’s Office, joined the lawsuit, according to a court-filed
notice of intervention dated November 17, 2021. The City’s attorneys negotiated the terms of the
settlement, noted Attorney McInnis.
Under the terms of the Settlement Agreement, which became effective on November 22, 2021,
Verra is to pay the City $1,048,172 in damages and the former employee $270,284 (21%) as a
reward for initiating the lawsuit and prompting the City’s investigation. The former employee
also alleged whistleblower retaliation/wrongful termination by Verra and that claim, as well as
the amount of attorneys’ fees to be awarded to McInnis and Goetsch remain unresolved by the
Settlement Agreement, according to Attorney Goetsch.
Both attorneys for the whistleblower expressed their appreciation to the City, its attorneys and
representatives in the DOT, for conducting a thorough investigation, intervening in in the case
and seeing it through to a successful resolution. Attorney Goetsch further observed that similar
cases are likely to arise under the federal False Claims Act after the government’s infrastructure
buildup and construction gets underway, especially in the transportation infrastructure sector.
As with the State False Claims Act, the federal version also awards up to 30% of any
governmental recoveries to successful whistleblowers, McInnis explained.
The case is captioned, The State of New York, New City, ex. rel. William T. Marshfield, Sr., Index
No. 100449/2020, Supreme Court of the State of New York, County of New York.
For additional information, please contact Timothy J. McInnis, Esq., of McInnis Law, at (212) 292-
4573 (tmcinnis@mcinnis-law.com) or Charles Goetsch, Esq., of Charles Goetsch Law Offices, LLC
at (203) 672-1370 (Charlies@charlie@gowhistleblower.com).
US Customs Duty Whistleblower Lawsuit Settles for $6 million
NYC whistleblower attorney Timothy J. McInnis announced today a $6m settlement against an importer of Chinese apparel and related companies. The settlement resolves a False Claims Act lawsuit against Joseph Bailey and his two New York City companies, Stargate Apparel, Inc. and Rivstar Apparel, Inc. The case began with the filing of a qui tam whistleblower complaint under seal in the United States District Court for the Southern District of New York in 2014. The settlement agreement among the whistleblower, the United States and the defendants was approved by U.S. District Judge J. Paul Oetken on July 28, 2021.
The action, initiated by a former employee, alleged that the defendants submitted invoices to the U.S. Customs and Border Protection (“CBP”) that understated the true value of the clothing that they imported into the United States in order to avoid paying millions of dollars in U.S. customs duties. The United States investigated the whistleblower’s allegations and joined in the lawsuit. All the defendants admitted the allegations against them as part of the civil settlement. Bailey also pleaded guilty to related criminal charges and was sentenced to 6 months in federal prison.
According to attorney McInnis, a former federal prosecutor, the whistleblower who brought this action will receive more than $1.2m (20%) for the information he provided. That unnamed person was “very courageous and extremely helpful to the United States during the ensuing
civil and criminal investigations,” according to McInnis. McInnis also acknowledge the tremendous work and successful results of the Assistant U.S. Attorneys and federal agents on the matter.
The case is captioned, United States of America ex rel. John Doe, Plaintiffs, v. Stargate Apparel, Inc., Rivstar Apparel, Inc. and Joseph Bailey,. Defendants, Index No. 1:14-cv-08991-JPO (S.D.N.Y.)
For additional information, please contact Timothy J. McInnis, Esq. of McInnis Law at (212) 292- 4573 or tmcinnis@mcinnis-law.com.
How to report anti-money laundering violations? Are you aware of anti-money laundering violations and want to report them to the authorities and receive a whistleblower reward? If so, you may be entitled to receive as much as 30% of any penalties recovered by the U.S. Department of Treasury or the U.S. Attorney General as a result of your information.
The Anti-Money Laundering Act of 2020 (AMLA), which was enacted as part of the National Defense Authorization Act for 2021, established a whistleblower reward program for reporting anti-money laundering violations. Under the AMAL people who report “original information” (not merely public information) of money laundering activities may be entitled to receive up to 30% from any covered action in which the Government recoups more than $1 million. The AMAL also permits whistleblowers to remain anonymous if they are represented by legal counsel.
What are the signs of money laundering to look out for and report? Such conduct is usually very complex and involves intricate financial arrangements used to circumvent Bank Secrecy Act (BSA) regulations.
These include: a. setting up shell corporations and off-shore foreign entities b. creating sham contracts and business arrangements establishing “slush” funds and secrete or misidentified accounts c. using improper financial wires and banking transfers
The ultimate goal of these machinations is to disguise the source, use or ownership of financial assets in order to hide illicit proceeds or further some type of illegal activity, such as, paying bribes, evading taxes, supporting terrorism, hiding involvement in criminal activity and defrauding investors.
You also may be entitled under the AMLA to bring a separate claim with the U.S. Department of Labor’s OSHA and federal court for any whistleblower retaliation you suffer for bringing forward your allegations. The AMLA protects money laundering whistleblowers from being fired, demoted, suspended, threatened, blacklisted, harassed or discriminated against in any other manner. It allows for double backpay with interest, reinstatement, compensatory damages (including emotional distress), attorneys’ fees and other forms of relief.
Whether you want to report anti-money laundering violations and/or file a claim for whistleblower retaliation, you should consult with an experienced whistleblower attorney as soon as possible. That is the best way to protect your rights.
"Tim McInnis is an amazing attorney. He is intelligent, thorough, ethical, kind and he works very strategically in order to insure the best outcome for his clients. I would trust him with my life. He is not only an excellent attorney, but he is a compassionate person." Denise A. Romano, January 2004
"Tim McInnis is a superb lawyer for whistleblowers. As both a relator and a lawyer I worked with for more than three and a
On October 14, 2020, medical device maker Merit Medical Systems Inc. (MMSI), of South Jordan, Utah, agreed to pay $18 million to settle allegations the company helped submit false claims to the federal Medicare and TRICARE programs and numerous state Medicaid programs by giving kickbacks to physicians and hospitals to induce the purchase and use of MMSI’s durable medical equipment devices and products. NYC attorney Timothy J. McInnis was a member of the legal team that successfully represented the whistleblower in the case, Charles J. (“CJ”) Wolf, M.D., who was the former Chief Compliance Officer of MMSI.
According to Dr. Wolf’s complaint and the government’s settlement agreement, for over six years MMSI paid kickbacks to physicians, medical practices, and hospitals. The payments were made indirectly under the guise of free advertising assistance, practice development, practice support, and so-called “educational” grants. All of this was intended to induce the healthcare providers to purchase and use MMSI’s products, including EmboSphere devices, which are used for uterine fibroid embolization procedures, and QuadraSphere devices, which are used for other types of embolization procedures. Among other things, MMSI used local advertising campaigns to steer patients to healthcare providers as a reward for past sales and to increase future purchases of MMSI products. Dr. Wolf and the government further alleged that MMSI disregarded numerous internal warnings, including from Dr. Wolf, that MMSI’s sales practices potentially violated the healthcare Anti-Kickback Statute (AKS).
The lawsuit was filed in the federal court in District of New Jersey, where attorney McInnis formerly served as an Assistant U.S. Attorney. The case is captioned United States ex rel. Wolf v. Merit Medical Systems, Inc., No. 2:16-cv-01855-CCC-MF (D.N.J.). Of the $18 million MMSI is paying to settle the case, $15.21 million will be go to the U.S. Treasury, and the remaining $2.79 million will go to the approximately 30 individual states that also joined the lawsuit.
half years and his counsel and perseverance were always spot on. His work was critical to a successful settlement of the case." Stephen B. Diamond, Esq., August, 2016
"Tim McInnis Law represented my case with the up most professionalism. He communicated with me at every turn of the case ensuring I understood the process as well what was to come next. His patience, comprehension of Qui Tam Law and persistence in getting me the highest amount possible out of the case is unmatched. I wouldn't hesitate to recommend his law firm for a minute." Don A. Briscoe, September 2016
"Tim McInnis Law represented my case with the up most professionalism. He communicated with me at every turn of the case ensuring I understood the process as well what was to come next. His patience, comprehension of Qui Tam Law and persistence in getting me the highest amount possible out of the case is unmatched. I wouldn't hesitate to recommend his law firm for a minute." Don A. Briscoe, September 2016
How to report a Criminal Antitrust Anti-Retaliation Act Violation? On December 23, 2020, the Criminal Antitrust Anti-Retaliation Act of 2019 (15 U.S.C. § 1 note) became effective. If you have been discriminated against at work for engaging in protected antitrust whistleblower activities, you may be able to report and sue for a violation of this new employment anti-retaliation law. Below is list of important FAQs summarizing what the Criminal Antitrust Anti-Retaliation Act covers and how you can report a violation of this law. FAQs What whistleblowing activities does the Criminal Antitrust Anti-Retaliation Act protect? The Act prohibits employers from retaliating against employees, contractors or subcontractors who, with reasonable belief and in good faith, report antitrust violations to the federal Government or a supervisor or assist in the investigation and prosecution of antitrust misconduct.
What constitutes a violation of this new anti-retaliation law? Pursuant to the Act, no employer may discharge, demote, suspend, threaten, harass, or in way discriminate against a covered person in terms and conditions of employment for any lawful act done in providing information or assistance to the Government or a supervisor concerning a violation of the antitrust laws.
What is meant by the phrase “anti-trust laws?” It refers to sections 1 and 3 of the Sherman Act (15 U.S.C. §§ 1 and 3). Does the Act cover civil antitrust violations? No, to be protected, a whistleblower must have a reasonable belief that a criminal antitrust violation or a related criminal act has been committed. Is every employee, contractor or subcontractor protected by the Act? Generally yes, as long as the person did not plan or initiate the misconduct or obstruct justice. What steps do you need to take to protect your rights under this law? You must first file a complaint with the Secretary of Labor under the rules of 49 U.S.C. § 42121(b). If you do not get satisfaction in that administrative proceeding you can then file a federal lawsuit in a United States District Court. How does a person benefit by reporting a violation of the Criminal Antitrust Anti-Retaliation Act? If your case is successful you will get all relief necessary to make you whole, including, compensatory damages, such as reinstatement with seniority; back pay, with interest; and compensation for any special damages resulting from such discrimination, including litigation costs, expert witness fees, and reasonable whistleblower lawyer fees. Important Statute of Limitations Warning You do not want to delay reporting a Criminal Antitrust Anti-Retaliation Act violation. Under the Act, you have only 180 days after your employer commits a retaliatory act against you to file your complaint. It is important therefore to contact an experienced whistleblower lawyer immediately.
If you did not meet our firm’s requirements for a PPP case, you can either contact the National Center for Disaster Fraud (NCDF) at (866) 720-5721 or file an online complaint at: https://www.justice.gov/disaster-fraud/webform/ncdf-disaster-complaint-form. Complaints filed will be reviewed at the NCDF and referred to federal, state, local, or international law enforcement or regulatory agencies for investigation. Where you will be able to report the fraud but NOT receive a financial reward. Or you can contact another whistleblower attorney to try to obtain a financial reward by filing a federal qui tam False Claims Act lawsuit.
On October 14, 2020, medical device maker Merit Medical Systems Inc. (MMSI), of South Jordan, Utah, agreed to pay $18 million to settle allegations the company helped submit false claims to the federal Medicare and TRICARE programs and numerous state Medicaid programs by giving kickbacks to physicians and hospitals to induce the purchase and use of MMSI’s durable medical equipment devices and products. NYC attorney Timothy J. McInnis was a member of the legal team that successfully represented the whistleblower in the case, Charles J. (“CJ”) Wolf, M.D., who was the former Chief Compliance Officer of MMSI.
According to Dr. Wolf’s complaint and the government’s settlement agreement, for over six years MMSI paid kickbacks to physicians, medical practices, and hospitals. The payments were made indirectly under the guise of free advertising assistance, practice development, practice support, and so-called “educational” grants. All of this was intended to induce the healthcare providers to purchase and use MMSI’s products, including EmboSphere devices, which are used for uterine fibroid embolization procedures, and QuadraSphere devices, which are used for other types of embolization procedures. Among other things, MMSI used local advertising campaigns to steer patients to healthcare providers as a reward for past sales and to increase future purchases of MMSI products. Dr. Wolf and the government further alleged that MMSI disregarded numerous internal warnings, including from Dr. Wolf, that MMSI’s sales practices potentially violated the healthcare Anti-Kickback Statute (AKS).
The lawsuit was filed in the federal court in District of New Jersey, where attorney McInnis formerly served as an Assistant U.S. Attorney. The case is captioned United States ex rel. Wolf v. Merit Medical Systems, Inc., No. 2:16-cv-01855-CCC-MF (D.N.J.). Of the $18 million MMSI is paying to settle the case, $15.21 million will be go to the U.S. Treasury, and the remaining $2.79 million will go to the approximately 30 individual states that also joined the lawsuit.
"Tim McInnis is an amazing attorney. He is intelligent, thorough, ethical, kind and he works very strategically in order to insure the best outcome for his clients. I would trust him with my life. He is not only an excellent attorney, but he is a compassionate person." Denise A. Romano, January 2004
"Tim McInnis is a superb lawyer for whistleblowers. As both a relator and a lawyer I worked with for more than three and a
On October 14, 2020, medical device maker Merit Medical Systems Inc. (MMSI), of South Jordan, Utah, agreed to pay $18 million to settle allegations the company helped submit false claims to the federal Medicare and TRICARE programs and numerous state Medicaid programs by giving kickbacks to physicians and hospitals to induce the purchase and use of MMSI’s durable medical equipment devices and products. NYC attorney Timothy J. McInnis was a member of the legal team that successfully represented the whistleblower in the case, Charles J. (“CJ”) Wolf, M.D., who was the former Chief Compliance Officer of MMSI.
According to Dr. Wolf’s complaint and the government’s settlement agreement, for over six years MMSI paid kickbacks to physicians, medical practices, and hospitals. The payments were made indirectly under the guise of free advertising assistance, practice development, practice support, and so-called “educational” grants. All of this was intended to induce the healthcare providers to purchase and use MMSI’s products, including EmboSphere devices, which are used for uterine fibroid embolization procedures, and QuadraSphere devices, which are used for other types of embolization procedures. Among other things, MMSI used local advertising campaigns to steer patients to healthcare providers as a reward for past sales and to increase future purchases of MMSI products. Dr. Wolf and the government further alleged that MMSI disregarded numerous internal warnings, including from Dr. Wolf, that MMSI’s sales practices potentially violated the healthcare Anti-Kickback Statute (AKS).
The lawsuit was filed in the federal court in District of New Jersey, where attorney McInnis formerly served as an Assistant U.S. Attorney. The case is captioned United States ex rel. Wolf v. Merit Medical Systems, Inc., No. 2:16-cv-01855-CCC-MF (D.N.J.). Of the $18 million MMSI is paying to settle the case, $15.21 million will be go to the U.S. Treasury, and the remaining $2.79 million will go to the approximately 30 individual states that also joined the lawsuit.
half years and his counsel and perseverance were always spot on. His work was critical to a successful settlement of the case." Stephen B. Diamond, Esq., August, 2016
"Tim McInnis Law represented my case with the up most professionalism. He communicated with me at every turn of the case ensuring I understood the process as well what was to come next. His patience, comprehension of Qui Tam Law and persistence in getting me the highest amount possible out of the case is unmatched. I wouldn't hesitate to recommend his law firm for a minute." Don A. Briscoe, September 2016
"Tim McInnis Law represented my case with the up most professionalism. He communicated with me at every turn of the case ensuring I understood the process as well what was to come next. His patience, comprehension of Qui Tam Law and persistence in getting me the highest amount possible out of the case is unmatched. I wouldn't hesitate to recommend his law firm for a minute." Don A. Briscoe, September 2016
"Tim McInnis is an amazing attorney. He is intelligent, thorough, ethical, kind and he works very strategically in order to insure the best outcome for his clients. I would trust him with my life. He is not only an excellent attorney, but he is a compassionate person." Denise A. Romano, January 2004
"Tim McInnis is a superb lawyer for whistleblowers. As both a relator and a lawyer I worked with for more than three and a
On October 14, 2020, medical device maker Merit Medical Systems Inc. (MMSI), of South Jordan, Utah, agreed to pay $18 million to settle allegations the company helped submit false claims to the federal Medicare and TRICARE programs and numerous state Medicaid programs by giving kickbacks to physicians and hospitals to induce the purchase and use of MMSI’s durable medical equipment devices and products. NYC attorney Timothy J. McInnis was a member of the legal team that successfully represented the whistleblower in the case, Charles J. (“CJ”) Wolf, M.D., who was the former Chief Compliance Officer of MMSI.
According to Dr. Wolf’s complaint and the government’s settlement agreement, for over six years MMSI paid kickbacks to physicians, medical practices, and hospitals. The payments were made indirectly under the guise of free advertising assistance, practice development, practice support, and so-called “educational” grants. All of this was intended to induce the healthcare providers to purchase and use MMSI’s products, including EmboSphere devices, which are used for uterine fibroid embolization procedures, and QuadraSphere devices, which are used for other types of embolization procedures. Among other things, MMSI used local advertising campaigns to steer patients to healthcare providers as a reward for past sales and to increase future purchases of MMSI products. Dr. Wolf and the government further alleged that MMSI disregarded numerous internal warnings, including from Dr. Wolf, that MMSI’s sales practices potentially violated the healthcare Anti-Kickback Statute (AKS).
The lawsuit was filed in the federal court in District of New Jersey, where attorney McInnis formerly served as an Assistant U.S. Attorney. The case is captioned United States ex rel. Wolf v. Merit Medical Systems, Inc., No. 2:16-cv-01855-CCC-MF (D.N.J.). Of the $18 million MMSI is paying to settle the case, $15.21 million will be go to the U.S. Treasury, and the remaining $2.79 million will go to the approximately 30 individual states that also joined the lawsuit.
half years and his counsel and perseverance were always spot on. His work was critical to a successful settlement of the case." Stephen B. Diamond, Esq., August, 2016
"Tim McInnis Law represented my case with the up most professionalism. He communicated with me at every turn of the case ensuring I understood the process as well what was to come next. His patience, comprehension of Qui Tam Law and persistence in getting me the highest amount possible out of the case is unmatched. I wouldn't hesitate to recommend his law firm for a minute." Don A. Briscoe, September 2016
"Tim McInnis Law represented my case with the up most professionalism. He communicated with me at every turn of the case ensuring I understood the process as well what was to come next. His patience, comprehension of Qui Tam Law and persistence in getting me the highest amount possible out of the case is unmatched. I wouldn't hesitate to recommend his law firm for a minute." Don A. Briscoe, September 2016
GREENBELT, MD – June 15, 2020 – The United States joined a lawsuit filed by Joseph,
Greenwald & Laake, P.A. on behalf of a former Chief Compliance Officer and whistleblower
against Utah-based medical device company, Merit Medical Systems, Inc. The False Claims Act
(qui tam) complaint alleges fraud schemes involving unlawful kickbacks to physicians to induce
their use of Merit’s devices over those of its competitors.
The whistleblower, (or “Relator”), Dr. Charles Wolf, is a non-practicing medical doctor and an
accredited healthcare compliance professional with over 20 years of experience.
The complaint
recounts how Dr. Wolf reported his concerns about the alleged fraud to Merit’s management
during his tenure as its Chief Compliance Officer, all to no avail. Unable to effect change from
within, Dr. Wolf resigned from Merit and reported his information to the Department of Justice,
which undertook a thorough investigation before deciding to intervene.
The lawsuit was made public on June 12, 2020, after the United States filed its notice of
intervention and the Court unsealed the case. The federal government is expected to file its own
complaint in intervention by July 13. In addition, 29 states are included in the lawsuit and will
have an opportunity to join it also.
The complaint focuses on kickback allegations where Merit provided paid advertising for loyal
Merit users and paid consulting fees in order to influence physicians to use Merit devices –
which are expected to be included in the federal government’s forthcoming complaint. The
lawsuit alleges that Merit “paid for advertising for high-volume users of its medical devices and
continues to pay consulting fees to high-use providers for little-to-no-work.” Disguised as
educational in nature, the suit claims that, instead, the money paid to physicians was meant to
effect and “induce hospitals and physicians to purchase additional equipment, supplies and/or
products from Merit.”
Federal and state laws prohibit payments of any kind to physicians – including marketing dollars
and consulting fees – to influence physician choice of medical devices. “Prosecuting these cases
protects patients. When medical device companies pay something of value to induce physicians
to use their devices to the exclusion of others, that can effect independent medical judgment and
patient care,” said Veronica Nannis, who, with her partner Jay Holland, represents the
whistleblower in this case along with former Assistant United States Attorney, Timothy J.
McInnis of McInnis Law.
On January 6, 2020, U.S. District Judge Lewis A. Kaplan approved a settlement stipulating to a whistleblower award in a Customs duties fraud lawsuit. Under the agreement with the government, Xing Wei will receive $170,000 for helping the U.S. Attorney’s Office for the Southern District of New York recover $1 million from Notations, Inc., a garment wholesaler from Warminster, Pennsylvania, with a Manhattan showroom.
On October 3, 2017, Notations admitted it ignored signs of duties evasion by Yingshun Garments, Inc., an importer of apparel from China, and two successor entities and an owner/officer of each entity. The government filed its lawsuit against Notations and the Yingshun defendants charging them with perpetrating a double-invoice scheme whereby the Yingshun companies presented false invoices to CBP, showing prices for imported garments that were falsely discounted up to 75 percent to avoid customs duties. Notations admitted it furthered this scheme by overlooking obvious indications that Yingshun’s business practices were “highly suggestive of fraud.”
The whistleblower, Xing Wei, alerted the government to Yingshun’s conduct, which she had learned about through a family member who once worked for Yingshun, by filing a qui tam law suit under the False Claims Act, 31 U.S.C. § 3729. Doing so potentially entitled Ms. Wei as the “relator” in the lawsuit to between 15% and 25% of any funds recovered after the government joined her case and took over the litigation.
According to one of Ms. Wei’s whistleblower attorneys, Timothy J. McInnis, of NYC-based McInnis Law, this settlement is significant for two reasons. First, the government pursued duties fraud claims against a US-based “downstream” commercial purchaser and re-seller, not just the foreign manufacturer and importers. And, second, the whistleblower received an award for opening the door to the investigation and later helping uncover Notations’ role even though her qui tam complaint did not name Notations specifically.
McInnis commended Ms. Wei for her courage in bringing this misconduct to light. “It goes to show that under some circumstances alerting the government to fraud will be rewarded even where the whistleblower doesn’t know all the participants or all the facts,” McInnis stated. He also acknowledged Washington, DC attorney Joseph Black’s assistance on the case and the efforts of the U.S. Attorney’s Office and CBP investigators.
