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The lawsuit, filed in Dallas federal court, accused Northern Trust and 15 other banks of “reverse False Claims Act” violations for failing to reimburse the government for federal benefits that were paid to deceased recipients. These included benefits from the Social Security Administration, Office of Personnel Management, Railroad Retirement Board and Department of Veterans Affairs, the lawsuit alleged.
US District Judge Karen Gren Scholer dismissed the lawsuit with prejudice for the plaintiff’s failure to state a claim and because of the public disclosure bar, which prevents a relator from bringing a False Claims Act after similar allegations have been disclosed publicly. In her order, Judge Scholer found that “the critical elements of the alleged fraudulent scheme were in the public domain” and that the allegations “are based upon and substantially the same as the allegations contained in certain of the public disclosures.”