Comprehensive Guide to Whistleblower Laws: Massachusetts

Landmark Whistleblower Cases in Boston Federal Courts: Key Legal Insights and Lessons

Boston: A Key Venue for Whistleblower Litigation

Boston federal courts have become a hub for whistleblower lawsuits for several reasons:

• Government Attorneys: Boston’s US Attorney’s Office has developed a very strong Affirmative Civil Enforcement practice, which has attracted dozens of whistleblower cases. It is important to choose a law firm with strong connections with the US Attorney’s Office.

• Healthcare Fraud Cases: As home to leading pharmaceutical and healthcare companies, Boston sees significant False Claims Act cases in these industries.

• Defense Sector Fraud: With major defense contractors operating in Massachusetts, defense contractor fraud lawsuits are prevalent.

• Court Expertise: Boston’s federal and state courts have built a reputation for handling complex whistleblower claims, including qui tam lawsuits and FCPA violations.

GlaxoSmithKline Settlement (2012): A Major Healthcare Fraud Case in Boston

Case Overview:
In 2012, pharmaceutical giant GlaxoSmithKline (GSK) agreed to pay nearly $3 billion to resolve allegations of civil healthcare fraud under the False Claims Act (FCA) as well as criminal misbranding. The lawsuits were filed in Boston federal court, marking a pivotal moment in whistleblower litigation.

Allegations: There were numerous allegations that led to this massive settlement.

• Off-label promotion of drugs like Paxil and Wellbutrin.

• Failing to report safety data for Avandia, leading to Medicare and Medicaid fraud.

• Paying kickbacks to physicians to encourage unnecessary prescriptions.

Role of Whistleblowers:

• The case originated from at least four separate qui tam lawsuits, where whistleblowers—in this case company insiders—exposed fraudulent practices.

• Whistleblowers were instrumental in recovering funds for the government and safeguarding public health.

Key Takeaways:

• The settlement highlighted Boston’s role as a key venue for healthcare fraud lawsuits.

• Whistleblowers remain critical in bringing large-scale False Claims Act(s) and holding corporations accountable.

Raytheon Technologies Settlement (2024): Exposing Defense Contractor Fraud

Case Overview:
In 2024, Raytheon Technologies (RTX), one of the largest defense contractors, settled allegations of fraud and bribery for $950 million. Filed in Boston federal court, the case revolved around violations of the Foreign Corrupt Practices Act (FCPA) and defense contract fraud.

Allegations:

• Submitting false claims to the U.S. Department of Defense. Specifically, from 2012 through 2013 and again from 2017 through 2018, Raytheon employees provided false and fraudulent information to the Department of Defense during contract negotiations concerning two contracts with the United States for the benefit of a foreign partner — one to purchase PATRIOT missile systems and the other to operate and maintain a radar system. In both instances, Raytheon employees provided false and fraudulent information to DOD in order to mislead DOD into awarding the two contracts at inflated prices. These schemes to defraud caused the DOD to pay Raytheon over $111 million more than Raytheon should have been paid on the contracts.

• Paying illegal bribes to foreign officials in Qatar to win lucrative contracts. Between 2012 and 2016, Raytheon, through its employees and agents, engaged in a scheme to bribe a high-level official at the Qatar Emiri Air Force (QEAF), a branch of Qatar’s Armed Forces (QAF) that was primarily responsible for the conduct of air warfare, in order to assist Raytheon in obtaining and retaining business from the QEAF and QAF. Raytheon entered into and made payments on sham subcontracts for air defense operations-related studies in order to corruptly obtain the QEAF official’s assistance in securing certain air defense contracts.

The Whistleblower’s Role:

• Once again, this conduct was exposed by whistleblowers. In fact, whistleblower’s insider knowledge brought the allegations to light, illustrating the power of qui tam litigation in Boston’s courts.

Takeaways for Defense Contractors:

• Compliance programs must address both FCA and FCPA risks.

• Companies in the defense sector face heightened scrutiny, especially in cities like Boston with a strong federal presence.

Medicare Fraud in Boston Courts:

Regeneron Pharmaceuticals Kickback Case (2024)

Case Overview:
In 2024, the federal government filed a civil complaint under the False Claims Act against Regeneron Pharmaceuticals, alleging kickback violations involving Medicare reimbursements for its drug, Eylea. Eylea is a leading Medicare expense, with payments of more than $25 billion between 2012 and 2023.

Key Allegations in the Complaint:

• Illegal use of third-party charities to pay kickbacks to physicians.

• Inflating costs for Medicare, resulting in massive taxpayer losses.

Boston US Attorney’s Office Role in this Whistleblower Case:

• The Government’s press release specifically touts the use of whistleblowers to bring the case:

  The government’s investigation was prompted by False Claims Act allegations brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act. Under the FCA, private parties, known as relators, can file an action on behalf of the United States and receive a portion of the recovery. The FCA permits the United States to intervene in and take over the action, as it has done here. If a defendant is found liable for violating the FCA, the United States may recover three times the amount of its losses plus applicable penalties.

• Boston prosecutors, once again, played an instrument role in bringing this case, reinforcing Massachusetts and Boston in particular as a hub for Medicare fraud lawsuits and whistleblower qui tam suits.

St. Elizabeth’s Hospital (December 2023)

Case Overview:
The U.S. Attorney’s Office filed a complaint under the False Claims Act against Steward St. Elizabeth’s Medical Center of Boston, Inc. (SEMC); Steward Medical Group, Inc. (SMG); and Steward Health Care System, LLC (Steward) alleging that they violated the Physician Self-Referral Law (commonly referred to as the “Stark Law”) and submitted and caused the submission of false claims and statements to the Medicare program. Steward was once one of the largest, private, for-profit health care networks in the nation, but has now come under intense federal scrutiny for criminal violations.

Key Allegations:

• In 2012, SMG recruited Dr. Agnihotri, a cardiac surgeon, to serve as the Chief of Cardiac Surgery at SEMC. The government alleges that the defendants recruited Dr. Agnihotri because they wanted to increase the number of cardiovascular surgeries at SEMC in Boston, as a means to grow their profits via reimbursement from Medicare and other insurers.

• The government’s complaint alleges that, from January 2013 through March 2022, SMG paid Dr. Agnihotri compensation that exceeded fair market value as well as incentive compensation that varied based on, and took into account, the volume or value of his referrals to SEMC. Specifically, the amount of incentive compensation that SMG allegedly paid to Dr. Agnihotri varied based on the number of surgeries that Dr. Agnihotri referred to SEMC. It is alleged that SMG paid Dr. Agnihotri approximately $4,868,500 in incentive compensation that it calculated by including as a variable the number of cases Dr. Agnihotri referred to SEMC.

• The complaint alleges that Dr. Agnihotri made referrals to SEMC in violation of the Stark Law and SEMC submitted over 1,000 claims to Medicare knowing that the claims for those referred services were not eligible for payment. As a result, Medicare mistakenly paid tens of millions of dollars to SEMC for false claims.

Significance of the Case:

• Although the Boston prosecutors often bring cases of nationwide importance, this “bread and butter” whistleblower qui tam action indicates that the Government will also prosecute smaller matters closer to home.

Why Whistleblowers Need Experienced Legal Counsel

• Whistleblowers can play a critical role in exposing fraud and protecting public resources. Laws like the False Claims Act and OSHA offer protections and financial incentives to individuals who file lawsuits in good faith.

• However, it is critical to properly investigate a claim and draft a well-reasoned and vetted complaint. Experienced counsel is needed. Sloppy or misguided complaints will not be adopted.

• A good relationship with the civil prosecutors at the US Attorney’s Office is also important to making sure that the Government files its own action in the case.

How Dynamis LLP Can Help

At Dynamis LLP, our attorneys specialize in:

• Representing whistleblowers in qui tam lawsuits under the False Claims Act.

• Fact investigation and development of qui tam lawsuits, which will include drafting a complaint.

• Leveraging our relationships with prosecutors to present the best possible case in order to improve chances that the Government will intervene.

Whether you are a first-time whistleblower or someone who has done this before, Dynamis LLP has the experience to guide you through the process.

Contact Dynamis LLP today for a confidential consultation.

At Dynamis LLP, with an established team of lawyers located in Massachusetts, we specialize in representing whistleblowers across industries (learn about our services). Whether you are considering reporting misconduct or need assistance with a retaliation claim, our attorneys provide tailored guidance to protect your rights and navigate the complexities of whistleblower laws effectively.

Protect your rights by contacting attorneys at Dynamis LLP. Our experienced whistleblower attorneys are here to guide you through every step. Contact whistleblowers@dynamisllp.com today.