Two Major Companies Agree to Resolve Claims in Federal Lawsuits

Two Major Companies Agree to Resolve Claims in Federal Lawsuits

Now and then something slips through that should have been reported because of its importance. Two of them happened in February 2016.

On February 1, in an agreement with the US Department of Justice, the US Attorney's offices for the Southern District of New York and Northern District of California and the US Department of Housing and Urban Development, Wells Fargo & Co. agreed to pay $1.2 billion to resolve claims related to its Federal Housing Administration (FHA) lending program between 2001 and 2010.

A 2012 civil suit claimed the San Francisco-based bank committed fraud by recklessly approving government-backed mortgages and then seeking government insurance when those loans went sour. Regulators contended that the FHA wrongfully paid millions of dollars in insurance claims on loans that defaulted.

On February 9, Pfizer Inc. said its Wyeth subsidiary reached an agreement in principle under which it would pay the federal government $784.6 million to resolve claims it violated federal laws when calculating Medicaid rebates for its heartburn drug Protonix. In its lawsuit, the Justice Department alleged that Wyeth violated the law by not offering to Medicaid the discounts on Protonix it had given to hospitals between 2001 and 2006. Officials had said the miscalculations amounted to hundreds of millions of dollars, while the Justice Department estimated total damages could total more than $2 billion.

Under the settlement finalized in late April, Wyeth agreed to pay a total of $784.6 million to the federal government and individual states. More than $371 million of that amount will go to the Medicaid program. Pennsylvania will receive approximately $12.4 million.

Based in northern New Jersey, Wyeth had research operations in Radnor, Pa., while Pfizer, a New York pharmaceutical company, has research operations in Collegeville, Pa.