Red Ventures and MYMOVE Agree to Pay $2.75 Million to Resolve Whistleblower Allegations that they Violated the False Claims Act

Pollock Cohen, as lead counsel, represented the whistleblower in a qui tam lawsuit brought under the False Claims Act.  It was just one of a handful of qui tam cases where the government chose to intervene, and it resulted in a multi-million dollar settlement.

The whistleblower was a former MYMOVE employee, and the suit alleged that Red Ventures, LLC and MYMOVE, LLC knowingly withheld funds owed to the U.S. Postal Service (USPS) under contractual agreements.

Acting on the whistleblower’s complaint, the U.S. Attorney’s Office for Western District of North Carolina agreed with us, by holding MYMOVE accountable with respect to their activities to defraud and cheat the U.S. Postal Service (“USPS”) by underpaying on contracts connected to the USPS change-of-address process.

It is estimated that the Department of Justice only intervenes in about 1 in 5 (20%) of all qui tam cases. Ours was one of those cases. The settlement made clear that the government will not tolerate cheating, irrespective of the amount involved.

Justice Department News Release on False Claims Act Settlement 

Well-known retailers paid MYMOVE to be included in advertisements and promotional mailers targeting people who were moving and who had notified the USPS of their pending move. In turn, MYMOVE was supposed to pay the USPS a portion of the advertising fees paid by the retailers.

The United States alleged that MYMOVE had a contractual obligation to share monthly gross revenue related to this program with USPS, but instead, MYMOVE improperly and secretly deducted some of its own costs before sharing revenue with USPS – essentially changing the contractual revenue share provision at issue from one of gross revenue to one of net revenue, a change favorable to MYMOVE’s profits at the expense of revenue owed to USPS.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by a brave, former MYMOVE employee, acting as whistleblower. Under those provisions, a private party may file an action on behalf of the United States and receive a portion of any recovery.

The qui tam case is captioned U.S. ex rel. Arellano v. MYMOVE, LLC and Red Ventures, LLC, No. 3:20-cv-255 (W.D.N.C.).  Pollock Cohen LLP served as lead counsel for the whistleblower with Poyner Spruill LLP serving as local counsel.