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Whistleblower Qui Tam Case Result: “Big Dig” Settlement of $458 Million Announced

January 25, 2008
Michael Sullivan

The “Big Dig” collapse has led to a $458 million settlement by contractors responsible for the Boston Central Artery/Tunnel highway project. Whistleblowers using the federal and state False Claims Acts helped bring about that result.

Of the $458 million settlement, $23 million is being paid to the United States under the federal False Claims Act, and $40 million will go to Massachusetts under its state False Claims Act, as a result of qui tam whistleblower litigation. (As we have written about extensively on
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Qui Tam Whistleblower Law Signed by New Jersey Governor

January 16, 2008
Michael Sullivan

This whistleblower lawyer blog reported earlier that the New Jersey Assembly had passed the New Jersey False Claims Act, which provides incentives to whistleblowers (“relators”) to expose fraud affecting state funds–much like the federal False Claims Act does.

Governor Jon Corzine signed the new bill into law yesterday, which makes New Jersey the 20th state to enact a state False Claims Act with qui tam whistleblower provisions similar to those of the federal False Claims Act. (Click here
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Durable Medical Equipment (DME) Fraud Crackdown by CMS Announced–to Combat False Claims Act Violations of Types Often Exposed by Whistleblowers and Their Attorneys

January 12, 2008
Michael Sullivan

Some of the many types of health care fraud that this whistleblower lawyer blog has followed involves “durable medical equipment” (DME). The sale of wheelchairs, walkers, oxygen supplies and equipment, hospital beds, orthotics, prosthetics, and various medical devices is yet another opportunity for dishonest suppliers to defraud taxpayers.

This week, the Centers for Medicare & Medicaid Services (CMS) announced an initiative designed to improve care, save $1 billion annually, and lower Medicare beneficiaries’ out-of-pocket costs–by promoting competition in the sale of durable medical
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False Claims Act Passed in New Jersey Continues Trend of New State Qui Tam Whistleblower Statutes

January 7, 2008
Michael Sullivan

The wave of new state False Claims Acts with qui tam whistleblower provisions has been a frequent topic of this whistleblower lawyer blog. In 2007, New York, Georgia, and Oklahoma joined the 16 other states that have enacted versions of the federal False Claims Act, the government’s primary weapon for fighting fraud against taxpayers.

Today, New Jersey’s Assembly unanimously passed the New Jersey State False Claims Act, which upon signature by the Governor will make New Jersey the 20th state to have a state version of the venerable qui tam whistleblower statute.

We congratulate New Jersey for taking the prudent action of passing a state False Claims Act. As we have written about extensively, Congress through the Deficit Reduction Act of 2005 has created financial incentives for states that pass such qui tam whistleblower laws that are at least as effective as the federal False Claims Act.

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IRS Tax Whistleblowers & False Claims Act Qui Tam Cases–2007 Year in Review by Whistleblower Lawyer Blog

December 31, 2007
Michael Sullivan

2007 has been a most significant year for whistleblowers. The whistleblower lawyer blog attorneys look back on some of the milestones:

1. As soon as Congress authorized the first meaningful IRS Whistleblower Rewards Program to pay tax whistleblowers 15-30% of IRS recoveries from those who violate the tax laws by statue effective on December 20, 2006, beginning in January our whistleblower lawyers submitted some of the first IRS Whistleblower claims in the nation under the new law. Our IRS Whistleblower cases have continued
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False Claims Act Litigation Attorneys Gather in Atlanta to Explore Whistleblower Issues

December 4, 2007
Michael Sullivan

At a conference on False Claims Act Litigation on November 30, attorneys representing the government, relators or whistleblowers, and defendants gathered to discuss whistleblower law issues. The conference was organized by the law firm of Balch & Bingham LLP.

This whistleblower lawyer blog writer had the pleasure of appearing on a panel with the Chief of the Civil Division of the U.S. Attorney’s Office in Atlanta, Amy Berne, and with Balch & Bingham’s John Markus.

Amy Berne opened with an overview of
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Tax Fraud & Tax Evasion Among Medicaid Providers: New IRS Whistleblower Program Fills Gap in False Claims Act for Whistleblowers and Their Attorneys

December 3, 2007
Michael Sullivan

Two important topics of this whistleblower lawyer blog are addressed in a recent Government Accounting Office (GAO) Report on tax cheating by Medicaid providers. The Report shows the wisdom of the new IRS Whistleblower Program, which fills a “gap” in the coverage of the major whistleblower statute, the False Claims Act.

GAO reports that thousands of Medicaid providers collect large amounts of federal dollars each year, while cheating the government by failing to pay taxes owed–usually payroll taxes and personal income taxes.
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False Claims Act “Qui Tam” Whistleblower Cases Recover More Than $1 Billion In Latest Year, Justice Department Announces

November 13, 2007
Michael Sullivan

Once again displaying the effectiveness of the False Claims Act in combating government fraud, the Justice Department has announced that it recovered $2 billion in fraud cases in the latest fiscal year that ended September 30, 2007. Qui tam whistleblower cases under the False Claims Act accounted for at least $1.45 billion of those recoveries, with the whistleblowers (or “relators’) sharing in those recoveries.

In all but one year since 2000, False Claims Act cases have generated at least $1 billion in
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TRICARE Medical Fraud Report–Whistleblower Attorneys Take Note that Health Care Fraud Continues to Plague Government

November 2, 2007
Michael Sullivan

Fraud affecting health care is a frequent topic of our whistleblower lawyer blog. A new report on TRICARE, the U.S. Military’s health care system, shows that medical fraud continues, as honest whistleblowers and their lawyers continue the fight against government fraud.

More than 200 “qui tam” whistleblower cases were mentioned in the annual report of the Program Integrity Office of TRICARE, and more than 200 whistleblower cases have been brought each year since 2002.

The Report outlines numerous types of (more…)

False Claims Act Whistleblower Case to Be Decided By Supreme Court

October 31, 2007
Michael Sullivan

This week, the United States Supreme Court agreed to hear a False Claims Act whistleblower case filed against the General Motors Corporation and its former division, Allison Engine Company. The alleged fraud concerns subcontracts for building parts for the U. S. Navy’s guided missile destroyers. Each of the 50 destroyers in question costs the taxpayers over $1 billion.

At issue in this case is an argument being made by the defendants that the whistleblower and the government cannot attack the alleged fraud scheme under
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Federal Contractor Fraud Laws To Get Tougher? ACORN Controversy Casts Spotlight on Larger Contractors That Violate False Claims Act

September 25, 2009
Michael Sullivan

Outrage over misuse of public funds is a healthy reaction to those who cheat taxpayers. It can also create interesting bedfellows, as newly-introduced legislation in the House demonstrates.

HR 3571, aimed at “de-funding ACORN,” would ban federal contracts and most federal funds to any organization that “has filed a fraudulent form with any Federal or State regulatory agency,” among other things. (Complete bill is below.)

As. Rep. Alan Grayson (D-FL) observed correctly, fraud by those who receive government funds involves much “bigger fish” than ACORN–and bigger dollar amounts of alleged fraud.

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Calls Continue for a “False Claims Act” for Wall Street Whistleblowers

September 20, 2009
Michael Sullivan

Since the Madoff and Stanford scandals, we have written about the calls for the Securities and Exchange Commission (SEC) to establish a meaningful whistleblower rewards program. Currently, no adequate incentives exist for whistleblowers to speak up when they might have a chance to stop large scale fraud and prevent the next Madoff or Stanford debacle. How much better off would so many Americans be if someone had exposed Madoff before he defrauded so many investors?

Forbes has run interesting column by Bill Singer, calling for a statute that apples “False Claims Act” whistleblower remedies to Wall Street. Why not protect investors from the massive losses that so many incurred? The current system obviously failed to do so. Harry Markopolis has described eloquently how the SEC could do so much better, and new SEC whistleblower rewards should make a huge difference.

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Protecting Whistleblowers from Criminal Prosecution: The Mystery of the UBS Whistleblower’s Prison Sentence

September 3, 2009
Michael Sullivan

In one of two prominent whistleblower cases in the news this week, whistleblower John Kopchinski will be awarded more than $50 million for his role in exposing improper “off-label marketing” of the drug Bextra by Pfizer. Other whistleblowers also will be rewarded because of this settlement. That settlement of $2.3 billion is the largest in history ($1 billion to settle False Claims Act allegations, and $1.3 billion in criminal fine and forfeiture).

As large as the Pfizer settlement is, the other whistleblower’s actions seem likely to lead to recovery of dollars that could dwarf this $2.3 billion settlement. UBS whistleblower Bradley Birkenfeld has lifted the shroud of secrecy from thousands of American taxpayers’ offshore accounts at UBS. He has given the IRS a foothold into recovering potentially many billions in unpaid taxes owed.

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Latest State “False Claims Act” Is Enacted in North Carolina

September 2, 2009
Michael Sullivan

We have followed closely the trend of states enacting their own versions of the nation’s chief whistleblower law the False Claims Act. North Carolina has become the newest state to enact its own False Claims Act, which is reprinted below.

We congratulate the State of North Carolina on a momentous accomplishment.
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The “Program Fraud Civil Remedies Act”–A “Mini-False Claims Act”

August 9, 2009
Michael Sullivan

For a “webinar” on August 11, 2009, I have been asked to discuss not only potential liability under the False Claims Act for false or fraudulent claims to the federal government, but also what has been called the “Mini-False Claims Act”: the “Program Fraud Civil Remedies Act,” 31 U.S.C. §§ 3801-12,

Because it is not feasible for the government to handle under the False Claims Act every conceivable case of a false claim in procurement, the PFCRA was enacted so that smaller claims could be handled in an administrative process.

A major provision of the PFCRA, section 3802, is reprinted below:

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Whistleblower Attorneys Discuss False Claims Act Amendments & “The Most Pressing Issues in Representing Whistleblowers”

July 12, 2009
Michael Sullivan

At the 20th Annual Convention of NELA, the National Employment Lawyers Association, I recently had the pleasure of moderating a panel discussion of some of the country’s top “whistleblower” lawyers. The topic was “The Most Pressing Issues in Representing Whistleblowers.”

Joining me in this panel discussion were Richard Renner and David J. Marshall. Richard is an attorney with Kohn & Colapinto in Washington, DC. and also serves as Legal Director of the National Whistleblowers Center. David is a partner with Katz, Marshall & Banks, LLP
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False Claims Act Amendments Become Law Today, and Justice Department Expands Health Care Fraud Task Force

May 20, 2009
Michael Sullivan

Today was a monentous day for those who believe in integrity in how taxpayer funds are treated.

President Obama signed into law today the Fraud Enforcement and Recovery Act of 2009, which makes important amendments to the country’s most important tool for fighting fraud, the False Claims Act.

Also important today, the Obama administration announced an expansion of DOJ’s health-care strike forces, which are designed to combat fraud in Medicare and Medicaid programs. Attorney General Eric H. Holder Jr. and Health and Human
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Major Whistleblower Law Development–False Claims Act Amendments Pass House of Representatives, As Part of the “Fraud Enforcement and Recovery Act of 2009”

May 6, 2009
Michael Sullivan

Today is an historic day–the House of Representatives has passed the Fraud Enforcement and Recovery Act of 2009 by a vote of 367-59. The Act includes long-needed amendments to the nation’s primary anti-fraud law, the False Claims Act, about which we have written often.

The amendments are designed to protect the hundreds of billions in taxpayer funds now being spent from fraud affecting TARP, other “stimulus” measures, Medicare and Medicaid, national defense including the Iraq and Afghanistan wars and reconstruction efforts, and countless other government programs.

The Senate approved the Act by a vote of 92-4 on April 28th. A conference committee now will consider reconciling differences in the versions of the bill.

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Fraud Against TARP Funds A Real Threat, Warns Special Inspector General for TARP

April 23, 2009
Michael Sullivan

We have written previously how the “bailout” measures such as TARP–the Troubled Assets Relief Program–and other “stimulus” measures must have effective oversight,disclosure, and anti-fraud provisions to protect those funds from those who look to commit fraud. The speed at which the government has acted to address the faltering economy will only increase the opportunities for fraud. Already, TARP whistleblowers have begun to come forward with reports of misuse of billions in TARP funds.

This week, Neal Barofsky, the Special Inspector General for the Troubled Assets Relief Program reiterated those points in his Quarterly Report to Congress. The IG described TARP as “inherently vulnerable to fraud, waste and abuse, including significant issues relating to conflicts of interest facing fund managers, collusion between participants and vulnerabilities to money laundering.”

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False Claims Act Amendments Gain Momentum In Bill to Combat Financial Fraud

April 21, 2009
Michael Sullivan

New legislation to combat financial institution fraud, securities fraud, mortgage fraud, and other fraud and abuse is gaining momentum, and brings closer long-needed amendments to restore to its intended strength the nation’s major “whistleblower” law, the False Claims Act.

The Fraud Enforcement and Recovery Act of 2009 (S. 386) received support yesterday in a statement from the Administration:

The Administration strongly supports enactment of S. 386. Its provisions would provide Federal investigators and prosecutors with significant new criminal and civil tools and resources
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