Medical testing giant Quest Diagnostics settled a whistleblower lawsuit and a related criminal fine for a total of $302 million, the New York Daily News reported April 16. Quest and a subsidiary, Nichols Institute Diagnostics, were accused of defrauding Medicare by selling medical test kits that they knew did not work. The $302 million figure includes a $262 million settlement in a civil lawsuit brought by the federal government and a $40 million fine for Nichols Institute Diagnostics, which also agreed to plead guilty to felony misbranding charges.
A separate $45 million will be paid to the whistleblower in the case, Thomas Cantor, who alerted the government to Quest’s misbehavior. Cantor is a biochemist and the president of Scantibodies Labs Inc., a competitor to Quest. He realized there was a problem with the tests after doctors came to him requesting a second test, believing the results they got from Quest weren’t right. Further tests showed that the results from Quest were consistently wrong. With help from a private law firm, he filed a whistleblower lawsuit in 2004. His efforts led to the federal investigation and eventually to this settlement.
Under the federal False Claims Act (and similar state and local laws), people who know about fraud against the federal government may sue the company committing the fraud on behalf of the public. These lawsuits are first filed under seal — meaning they’re not public knowledge — but a copy is served to the federal Department of Justice. The federal government can choose to step in, but if it does not, the plaintiff is free to continue, acting as a private prosecutor in the public’s interest. As an incentive to report the fraud — which can be difficult for employees who spot wrongdoing by their employers — the whistleblower stands to collect 15% to 30% of any money won in the suit.
The Chicago and Oakbrook Terrace law firm of Lubin Austermuehle is proud to represent whistleblowers seeking to expose fraud against the government and taxpayers. Our Chicago whistleblower and qui tam lawyers stand ready to represent people suing under the federal False Claims Act, the Illinois Whistleblower Reward and Protection Act and the Chicago False Claims Act, as well as laws in Indiana and Wisconsin. If you know about wrongdoing by your employer or another government contractor and you’re ready to step forward, we can help. To learn more at a free, confidential consultation, please contact Lubin Austermuehle today.