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November 27, 2018
Getnick & Getnick LLP has secured a settlement in New York’s first ever whistleblower case leading to a criminal restitution recovery for individual consumer fraud victims.
New York Attorney General Barbara Underwood today announced the $3.2 million recovery from Morgan Fuel & Heating Co. Inc., also known as Bottini Fuel Co., which provides heating oil throughout the Hudson Valley.
The settlement agreement states that Bottini Fuel from 2004 to 2016 “did not inform customers that they had overpaid for heating oil; instead, the company swept excess customer balances out of customer accounts and utilized these proceeds to benefit its owners and employees.” Victims include individual homeowners, business customers, local schools, prisons, towns and state agencies.
The resolution marks the first time that the New York False Claims Act, which empowers and rewards whistleblowers who report a fraud against governments, also led to a criminal conviction and restitution for victimized New York consumers.
Getnick & Getnick represents the whistleblower in the case, whose identity remains protected. The whistleblower will receive 23.5 percent of the government’s recovery in today’s settlement, the largest percentage ever for any New York False Claims Act case not involving Medicaid.
Getnick & Getnick partners Richard Dircks, Margaret Finerty, and Neil Getnick worked closely with the Attorney General’s Office in the successful prosecution and resolution of this case. “We appreciate the effort of the Attorney General’s office to work with us and our client to prosecute this important case and bring justice and restitution to hundreds of customers throughout the Hudson Valley, ranging from homeowners and businesses to schools, towns, and state facilities,” said Richard Dircks.
Margaret Finerty, a former NYC Criminal Court Judge and former Deputy Chief of the Manhattan District Attorney’s Office Frauds Bureau, said “This case demonstrates how the New York False Claims Act can be used as a fraud-fighting tool alongside the criminal law to achieve justice for all the victims, private individuals as well as government entities.”
Managing Partner Neil Getnick added, “This case illustrates the unusual strength of New York’s False Claims Act and serves as a guiding example for how this whistleblower law can be used to target scams aimed directly at consumers. This approach will become increasingly important as mandatory arbitration and class action limitations impede consumer fraud enforcement.”
The biggest victims, according to the settlement, include: the Taconic Developmental Disabilities Services Organization ($281,630), the Greenhaven Correctional Facility ($145,957), Roundout Valley Central School District ($83,044) and Beacon City School District ($10,375). Towns getting restitution include Saugerties, Blooming Grove, Monroe, Hunter, Wappinger and Stanford.
Bottini Fuel, located in Wappingers Falls, NY, will pay restitution of $1,171,884 to private-sector and individual victims, and $590,887 to government customers, plus $1,500,000 in False Claims Act damages and penalties to the state. Also, Bottini Fuel entered a guilty plea today to the crime of falsifying business records in the second degree.
Getnick & Getnick is a Manhattan-based law firm dedicated to fighting fraud and promoting business integrity. The firm works with whistleblowers, government agencies, and companies, guided by the principle that anti-fraud is not anti-business. The firm’s whistleblower cases have recovered more than $1 billion for taxpayers, and clients have received record awards, including the largest ever award for a single whistleblower.
