A New Jersey whistle-blower is part of a very significant case that was unsealed this week. A Belle Meade man, and former Ranaxby Laboratories Ltd. executive, filed a whistle-blower complaint against the pharmaceutical manufacturer in 2007. The man accused his former employer of defrauding public health care programs like Medicare and Medicaid. It was revealed this week that the whistle-blower lawsuit and related criminal charges have been settled for about $500 million–with the whistleblower receiving $48.6 million of that.

Under federal law, private citizens can file whistle-blower lawsuits under the False Claims Act in order to accuse a person or business of committing fraud against the U.S. government. If the government chooses to join a case–as it did in the Ranaxby suit–the whistle-blower will generally receive a portion of any settlement that is recovered.

Like in this case, whistle-blower lawsuits are often filed by an employee against his or her employer. This is typically because employees tend to be more likely to have knowledge of a business’s wrongdoing than outsiders. It can be very risky for employees to become whistle-blowers, because their employers may respond by firing them or otherwise retaliating against them. This type of employer response is illegal, however, and New Jersey has very strict laws against this.

In the Ranaxby case, the executive apparently reported various drug testing and production issues to the company’s management before he left the business in 2005. It is unclear why he left the company or if any retaliation was involved.

In addition to the whistle-blower lawsuit, the company ended up facing criminal charges for lying to U.S. regulators about selling adulterated drugs.

The $500 million settlement resolves both the criminal charges and the whistle-blower lawsuit, which has become the largest False Claims Act case prosecuted in the District of Maryland.

This case is a reminder of the important role that whistle-blowers play. New Jersey residents should also take note that if they have knowledge of fraud against a U.S. government agency, but are afraid to report it, it may be wise to seek legal counsel. The same is true for those who have reported fraud and have been retaliated against for doing so.

Source: NJ.com, “N.J. whistleblower nets $48.6 million in Ranaxby fraud case,” May 14, 2013