Whistleblower Blog

Whistleblower Laws of Two More States–Hawaii and Virginia–Are Approved by Feds

States are figuring out how to pass whistleblower laws with effective “qui tam” provisions, so that they qualify to receive more money from Medicaid fraud settlements. The Office of Inspector General of the Department of Health and Human Services has announced that, unlike 7 of the 10 state whistleblower laws that OIG had previously reviewed, the whistleblower laws of Hawaii and Virginia pass muster under the Deficit Reduction Act of 2005.

We have previously discussed why states are passing or improving their own
(more…)

Whistleblower Law Sponsor Testifies About Iraq Contractor Fraud

Whistleblowers and whistleblower attorneys may consider Senator Charles Grassley of Iowa as the “patron saint” of protecting taxpayer money from fraud against the government. Sen. Grassley continues his great work as he testifies today before the Senate Judiciary Committee about Iraq contractor profiteering and fraud.

The Senator already claimed another recent victory by spearheading passage of the new IRS Whistleblower Rewards Program. Sen. Grassley saw how cost-effective the False Claims Act has been in recovering more than $20 billion for the government–largely because of the
(more…)

New State Qui Tam Whistleblower Law Is Approved by House Judiciary Committee in Georgia

This afternoon I had the privilege of joining the Inspector General of Georgia’s Department of Community Health, Doug Colburn, in serving as the two invited witnesses who were asked to explain how the new “State False Medicaid Claims Act” would work, in testimony before the full Judiciary Committee of the Georgia House of Representatives.

The new whistleblower law was approved unanimously by the Judiciary Committee, and is gaining steam toward passage.

Chairman Wendell Willard expressed his strong support for encouraging whistleblowers to report wrongdoing. The
(more…)

IRS Whistleblower Rewards Featured in Smart Money Magazine

The new IRS Whistleblower Rewards Program that we have been discussing is featured in the March 13 issue of Smart Money Magazine–and Smart Money cites our Whistleblower blog and quotes one of our authors.

The Smart Money reporter, Lisa Scherzer, contacted our firm, Finch McCranie, LLP, to discuss the IRS Whistleblower Rewards program and our experiences in representing clients in the IRS Whistleblower program. We commented that most potential whistleblowers who have contacted us are ethical, conscientious persons who are troubled
(more…)

New “Whistleblower Protection Enhancement Act” Passes U.S. House

We were excited to see that the U.S. House of Representatives today passed an important new whistleblower protection law, the Whistleblower Protection Enhancement Act.

We have discussed this new whistleblower bill previously, as an encouraging development for whistleblowers and whistleblower lawyers. The new whistleblower law would protect federal employees and, now, also federal contractors, who report evidence of fraud, waste, abuse, gross mismanagement, or “substantial and specific danger to public health or safety.”

Rep. Henry Waxman sponsored the new whistleblower protection bill, but Rep. Bruce Braley of Iowa also spoke eloquently today about why American taxpayers–and the American public’s security–demand that honest citizens must be able to bring to light evidence of fraud, waste, and abuse that affects government dollars (which are taxpayer dollars).

(more…)

New State False Medicaid Claims Act (with Qui Tam Whistleblower Provisions) Is Approved by Georgia Legislative Subcommittee

Whistleblowerlawyerblog Author Testifies In Support of Georgia Department of Community Health’s “State False Medicaid Claims Act”

This morning, a new state False Claims Act cleared a hurdle as it was approved by a Georgia legislative subcommittee.

Georgia’s new “State False Medicaid Claims Act,” which has qui tam whistleblower provisions similar to the federal False Claims Act, received unanimous support among members of the subcommittee of the House Judiciary Committee chaired by Rep. Edward Lindsey of Atlanta.

Testifying in support of the new
(more…)

News in Government Procurement Fraud and False Claims

We found a very interesting article from last week’s Legal Times, with an excerpt of interest to whistleblower lawyers as follows:

“Last fall, the Justice Department launched a National Procurement Fraud Task Force to focus “resources at all levels of government to increase criminal enforcement” in areas of procurement fraud. The stepped-up attention to this area throughout the government may signal that the $3.1 billion record in federal fraud recoveries in 2006 could soon be broken. More than 50 inspectors general from across all
(more…)

IRS Names New Head of IRS Criminal Investigative Division

The IRS agents we have been meeting with since January to pursue whistleblower claims under the new IRS Whistleblower Rewards Program have a new boss, the IRS announced today.

The Criminal Investigative Division of the IRS will be led by Eileen Mayer, who was most recently head of the IRS’s Office of Fraud/Bank Secrecy Act.

We are encouraged by IRS Commissioner Mark W. Everson’s comments that “she will play a key role in IRS efforts to halt tax fraud.” Agents of the Criminal Investigative Division work tax fraud cases, some of which are now originating under the new IRS Whistleblower Rewards program.

As a result of the IRS’s efforts, the Department of Justice has brought many successful prosecutions.
The IRS’s press release is reprinted below:
(more…)

New Medicaid False Claims Act Proposed in Georgia

We were encouraged to see that Georgia has just joined the states that are considering a State “False Claims Act” with whistleblower provisions.

As we have discussed before on the Whistleblower Lawyer Blog, Congress has created great financial incentives for states that pass their own versions of the federal False Claims Act, with qui tam provisions that encourage whistleblowers. States can increase by 10% their share of Medicare fraud recoveries by passing their own False Claims Acts, but the state laws must pass muster with OIG and be at least as effective as the federal False Claims Act. Otherwise, as approximately seven other states were disappointed to find, the state does not receive an increase in its share of Medicare fraud recoveries.

Rep. Ed Lindsey is the sponsor of Georgia’s proposed “State False Medicaid Claims Act.” The new law would apply to Medicaid fraud and false claims, but not other fraud and false claims that cost the state taxpayers money.

(more…)

Has Iraq Fraud Cost Taxpayers Even More Than Previously Believed?

Congressional Committee Explores Contractor Overcharges

Of great interest to whistleblower lawyers is how much suspected fraud and abuse has occurred in Iraq reconstruction contracts. Goverment auditors recently announced that they now believe that Iraq contractor fraud and abuse may be three times greater than the previous estimates–and may affect one out of every six dollars spent in the Iraq reconstruction effort.

The estimate has grown from $3.5 billion to more than $10 billion in “questioned and unsupported costs,” according to the Defense Contract Audit
(more…)

SEC Recovers $39 Million under Foreign Corrupt Practices Act for Bribery and Kickbacks in Mexico and Iraq

One of the most interesting twists to the new SEC Whistleblower Program will be how many commercial bribes and kickbacks paid to foreign government officials will now come to light. As we have written about previously, the SEC shares jurisdiction with the Justice Department over such cases that violate the Foreign Corrupt Practices Act (FCPA).

An example of why whistleblowers will come forward is this afternoon’s announcement of the SEC’s $39 million settlement with ABB Ltd (“ABB”), a Swiss company that provides power and automation products and services.

The SEC alleged that ABB made more than $2.7 million in bribes and kickbacks to obtain more than $100 million in contracts. The payments allegedly were made to “government officials in Mexico to obtain business with government owned power companies,” and to the “former regime in Iraq to obtain contracts under the United Nations Oil for Food Program.”

(more…)

Health Care Fraud Cases and 2009-2010 Amendments to False Claims Act Discussed at National Fraud and Compliance Forum

At the annual Fraud and Compliance Forum in Baltimore that runs through Tuesday, the nation’s top health care lawyers will be paying close attention to recent changes to the nation’s primary whistleblower law, the False Claims Act. The “qui tam” provisions of the False Claims Act allow private citizen whistleblowers (“relators”) to share in the government’s recovery of damages.

As a former defense attorney who now represents whistleblowers, I have been asked to present a program at this conference with Rick Shackelford of King & Spalding, to discuss these major amendments to the False Claims Act–the first since 1986. Congress acted decisively in three recent major bills to restore the False Claims Act to its intended strength, in the face of court decisions that created obstacles to its use.

(more…)

Indiana Attorney General Invites Qui Tam Whistleblower Cases by Health Care & Pharmaceutical Employees To Stop Health Care Fraud

Smart and effective state Attorneys General have fought fraud against their citizens through encouraging greater use of the country’s major whistleblower law, the False Claims Act, and state versions of that law.

Texas AG Greg Abbott, for example, has a staff that has long distinguished itself for recovering millions of stolen taxpayer funds in health care fraud cases, under the leadership of Pat O’Connell and, more recently, Ray Winter.

Following this tradition, Indiana AG Greg Zoeller is urging employees of pharmaceutical companies and heath care entities to help stop health care fraud, and possibly share in the recovery as qui tam whistleblowers under the state and federal False Claims Acts.

While we have discussed in detail how the False Claims Act operates, AG Zoeller’s announcement gives a succinct summary. We have reprinted it below, and applaud his efforts.
(more…)

Shouldn’t the IRS Pay Tax Whistleblowers Who Help Prevent Fraudulent Refunds?

When IRS whistleblowers save U.S taxpayers money, they deserve the rewards that lawmakers such as Sen. Chuck Grassley fought to establish. In 2006 his efforts resulted in the first meaningful IRS Whistleblower program ever, which is attracting many tax whistleblowers with significant evidence.

We have discussed previously the many positive aspects of the long-awaited IRS Whistleblower procedures published in June–and one illogical, self-defeating feature. Some in the IRS–and apparently not the IRS Whistleblower Office–thought whistleblowers should not be rewarded when they report tax
(more…)

Merck and Other Pharma Companies Probed by DOJ and SEC in Foreign Corrupt Practices Act (FCPA) Investigation

When Pharma manufacturers are targeted by the Department of Justice, qui tam whistleblower cases under the False Claims Act are often the reason.

Now, whistleblowers may also receive rewards for reporting violations of the Foreign Corrupt Practices Act (FCPA), thanks to the new whistleblower provisions of the Wall Street financial reform law. Announcements like Merck’s recent SEC filing that it is now the subject an FCPA investigation involving other Pharma companies should become common, as corruption will now be increasingly exposed in a new wave of SEC Whistleblower cases.

The recent 10-Q filing of Merck & Co., Inc. stated in part:

(more…)

Does SEC Whistleblower Reward of $1 Million Signal A New Attitude Toward Wall Street Whistleblowing?

Only days after the new financial reform law created the first potentially meaningful awards for whistleblowers reporting securities and commodities violations and abuses, the SEC may have signaled a new attitude toward encouraging whistleblowers.

The SEC recently announced its first million dollar award for a whistleblower’s report of information about insider trading involving hedge fund adviser Pequot Capital Management, Inc., its chief executive, Arthur J. Samberg, and David E. Zilkha, a Microsoft employee.

Although $1 million may not sound like much when compared to the losses caused by the Madoffs of the world, it is a dramatic improvement over what the SEC had done before.

(more…)

International Tax Evasion Targeted by IRS Move to Revamp Its Large Business Division

To battle offshore tax abuses and other international tax fraud and tax evasion, the IRS has announced that it is “realigning” and renaming its Large and Mid-Size Business (LMSB) division. To reflect its new emphasis, it will known as the “Large Business and International” division (LB&I).

As more transactions cross international borders, and more corporations and wealthy individuals use offshore tax havens and foreign low tax jurisdictions to avoid their tax obligations, the IRS is smart to focus more of its enforcement efforts in this way.

Based on our experience with tax whistleblowers, it is clear that the IRS Whistleblower Program is already seeing increasing numbers of tax whistleblower claims dealing with offshore tax abuses and other international tax issues.

(more…)

Offshore Tax Havens Face Increasing Scrutiny, With IRS Whistleblowers Assisting

“Offshore” accounts are an increasing priority of IRS enforcement, aided by the new IRS Whistleblower Program. The Offshore World has changed and will never be the same again. The traditional tax haven assurance of secrecy and anonymity won’t necessarily work any more.

The US has concluded Tax Information Exchange Agreements (TIEA’s) with a number of Offshore jurisdictions. Although the TIEA’s fall short of comprehensive Double Tax Treaties, they allow the IRS to obtain tax information about entities and accounts in Offshore jurisdictions under
(more…)

How Whistleblower Lawyers Work Alongside Government Lawyers In Successful Qui Tam Cases Under the False Claims Act

When whistleblower attorneys bring a qui tam False Claims Act case, the most successful results usually occur when Government counsel and the whistleblower’s lawyers (Relator’s counsel) work together in what is known as the “public-private” partnership model.

This approach to qui tam cases allows the government to leverage its limited resources by calling on the resources provided by private attorneys. This is essentially a “joint prosecution effort, ” in which the government counsel and investigators can rely on Relator’s counsel at each stage,

–from the beginning of its investigation,

–to obtaining input for preparation of subpoenas for documentary evidence from the defendants,

–to review of evidence compiled by the government in response to subpoenas,

(more…)

New Rewards for Whistleblowers Reporting Bribery of Foreign Government Officials, Corporate Fraud In Foreign Government Contracts

When the President signed the new financial reform bill into law today, new whistleblower provisions quietly took effect to battle corruption, bribery, and corporate fraud to obtain foreign government contracts.

This new law creates the new SEC whistleblower program that we have followed since its gestation after the Madoff scandal broke. The SEC and the U.S. Department of Justice share jurisdiction over a growing and increasingly important area of enforcement, the Foreign Corrupt Practices Act (FCPA).

Bribery of foreign government officials in international business transactions, and false entries in books and records of those companies within the statute, are the targets of the FCPA. Whistleblowers whose information helps the SEC recover monetary sanctions from those corrupt entities in FCPA cases now have an enforceable right to a monetary award of 10-30%.

(more…)
Secret Link