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Whistleblower Blog

OFF LABEL MARKETING: BIG PHARMA’S PRESCRIPTION FOR PROFITS

The Food, Drug and Cosmetic Act prohibits pharmaceutical companies from marketing or promoting a drug for uses that the FDA has not approved. This practice is known in the industry as “off label marketing”. Increasingly, pharmaceutical companies have purposely engaged in off label marketing in order to increase profits at the price of public safety. Practitioners in this area see this every day. Whether the public and even the medical profession is aware of the extent of this practice is unknown. Nonetheless, it appears that the False Claims Act remains one of the best tools available to address this deplorable practice.

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Retaliation Against Whistleblowers and Witnesses in Federal Proceedings

While there are many specific retaliation provisions unique to claims filed under the False Claims Act, with the Equal Opportunity Commission and/or arising out of Sarbanes-Oxley provisions, all of which protect informant employees from being retaliated against by their employer, a little known fact is that there is a general statute (42 U.S.C. § 1985) which makes it unlawful for two or more persons to conspire to “deter” a witness from testifying in Federal Court. This statute also makes it unlawful to “retaliate” against a
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Tax Whistleblowers Encouraged to Come Forward

Even though the Internal Revenue Service has had a Rewards Program for many years, until recently, there was very little encouragement for tax whistleblowers or informants to come forward concerning their knowledge of the under-reporting of taxes. While it is well known that income tax evasion costs taxpayers approximately $300 billion a year, the Internal Revenue Service in the past has failed to aggressively address this problem. While enforcement actions against criminals are designed to help deter tax fraud, the $300 billion annual figure is
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Accounting Firm Partners Indicted in Tax Fraud Case Over Tax Shelters Promoted by Ernst & Young

IRS whistleblowers and whistleblower attorneys take note: accounting firms participating in selling tax shelters were jolted by today’s announcement of the indictment of four Ernst & Young partners for tax fraud conspiracy and other federal criminal charges relating to tax shelters.

The four accountants were alleged to have marketed tax shelter transactions based on fraudulent factual scenarios, through which wealthy taxpayers could eliminate or reduce the taxes paid to the IRS, according to the government’s announcement. All four persons charged had worked in E&Y’s group
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New Whistleblower Law on Medicaid Fraud Signed Today by Governor of Georgia

I was excited to be invited to participate in today’s signing of the new Georgia “State False Medicaid Claims Act,” the newest state qui tam whistleblower law. The bill’s sponsor, Rep. Edward Lindsey, asked this whistleblower lawyer blog author to join him and representatives of the Georgia Department of Community Health in the Governor’s Office for the signing ceremony.

Having worked with legislators on this bill, I was very happy to celebrate the law’s passage today:Participating in the signing ceremony with Governor Sonny
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Addendum: IRS Whistleblower Office Is Off to a Strong Start . . .

I posted earlier today on this whistle blower lawyer blog about the comments of the Director of the new IRS Whistleblower Office, Stephen Whitlock, on how the IRS Whistleblower program is off to a good start, with credible claims and supporting evidence having been submitted by whistleblowers and their attorneys.

Since then, my partner commented that he believes one of our larger cases was referred to in the IRS Director’s comments about “knowledgeable insiders.” We also neglected to mention our IRS Whistleblower
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New IRS Whistleblower Director Says IRS Rewards Program Is Off to a Strong Start

The head of the new IRS Whistleblower Office, Stephen Whitlock, reports that the new IRS Whistleblower Rewards Program is off to a strong start.

Today’s Wall Street Journal quotes Mr. Whitlock as saying that the claims submitted to the IRS Whistleblower Office to date appear to have credibility and have evidence to support them.

Since the new IRS Whistleblower program was authorized by Congress in December, our firm has been working with the IRS in pursuing whistleblower claims in the Midwest,
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Whistleblower Case Victory in D.C. Bid-Rigging Trial

A qui tam whistleblower and his lawyer are very happy as a result of a $102 million jury verdict–to be shared by the whistleblower–in a False Claims Act trial that ended on May 14.

The defendants in this whistleblower case included Bill Harbert International Construction Inc.; Harbert Construction Services; Bilhar International Establishment; Harbert Corp.; and Harbert International. The case alleged bid-rigging on three U.S. government-funded construction contracts in Egypt in the 1980s and 1990s.

The jury found that defendants violated the False Claims Act and awarded $34 million in damages, which are “trebled” under the False Claims Act.

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“Lessons from Health Care Fraud in Medicare and Medicaid” to Begin on This Whistleblower Lawyer Blog

Because health care fraud in the Medicare and Medicaid programs is such a huge problem, this week our whistleblower lawyer blog writers (former federal prosecutors who are now whistleblower attorneys) begin a series of posts on “Lessons from Health Care Fraud in Medicare and Medicaid.”

We will discuss how whistle blowers in the medical services profession have been important resources in revealing and stopping health care fraud in hospitals, nursing homes, physicians’ practices, and the pharmaceutical or drug industry. We also discuss how the
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Texas Upgrades Its Qui Tam Whistleblower Statute–and Considers An Even Better Whistleblower Law

Just after Georgia, New York, and Oklahoma have passed new whistleblower laws similar to the federal False Claims Act to protect at least state Medicaid funds, Texas is poised to do even more.

We were pleased to see that, on May 4, Texas upgraded its already successful Texas Medicaid Fraud Prevention Act. The changes were designed to allow Texas to receive a greater share of Medicaid fraud recoveries, as we have written about previously on this whistleblowerlawyerblog. The Deficit Reduction Act of 2005 creates
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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

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

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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IRS Whistleblower Regulations & “Guidance” for Whistleblower Attorneys from the IRS

Anticipating the new IRS Whistleblower Program regulations that are due by the December 20, 2007 first anniversary of the new IRS Whistleblower Program, the IRS Office of Chief Counsel has just issued a Notice on “Coordination of Section 7623 Whistleblower Claims in the Tax Court.”

As discussed extensively on this whistleblower lawyer blog, one of the major features of the new IRS Whistleblower Program is that whistleblowers who meet the program’s criteria now have an enforceable right to share in money
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IRS Whistleblower Program: Hedge Funds and Private Equity Firms Under Increasing IRS Scrutiny for Tax Abuses

Continuing this whistleblower lawyer blog’s discussions of the IRS’s strong interest in hedge funds and private equity firms, there have been several recent public statements and reports about IRS efforts to identify and stop tax fraud and tax noncompliance in these segments of the financial services industry.

Today, suspected tax abuses by hedge funds and private equity managers were the subject of a Tax Notes report, which cites a November 1, 2007 statement by the IRS. That same day, Bloomberg reported that
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TRICARE Medical Fraud Report–Whistleblower Attorneys Take Note that Health Care Fraud Continues to Plague Government

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…)

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False Claims Act Whistleblower Case to Be Decided By Supreme Court

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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Qui Tam Whistleblower in False Claims Act Case Receives $7.3 Million in False Claims Case

From time to time on this whistleblower blog we report cases of significance involving successful whistleblower claims filed under the federal False Claims Act. We read about such a case today in the news involving a $28 million settlement with National Air Cargo. It appears that the government determined that National Air Cargo had billed the government $4.4 million for various military shipments delivered by that company between the calendar years 1999 and 2005. The false claim was that National Air Cargo had billed
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IRS Tax Evasion & Stock Options Fraud Lead to Prison Sentence for Options Administrator

On this whistleblower lawyer blog, we have written previously about abuse of stock options–and how the IRS has declared that tax fraud and evasion from back-dating of stock options is a “Tier I” priority. Now, stock option fraud and income tax evasion will send a former stock options administrator to prison for almost four years.

The Securities and Exchange Commission has announced that Vencent Donlan was sentenced in a California federal court to 46 months in prison after pleading guilty to wire
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False Claims Acts and Unauthorized Laboratory Tests

Our whistleblower lawyer blog attorneys have written extensively about Georgia’s enactment of the new State False Medicaid Claims Act, a new whistleblower law that an attorney with our law firm helped enact. This qui tam whistleblower law has applicability to anyone who files a false or fraudulent claim for reimbursement with the State’s Medicaid program.

A classic example of this would be filing false claims for reimbursement for unnecessary and/or unauthorized laboratory tests. If a health care provider submits
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Revenue Recognition Fraud Charges Lead Nortel Networks Agrees to Pay $35 Million

Accounting fraud can create liability for violating the securities laws and IRS tax rules and regulations. This whistleblower lawyer blog regularly comments on cases of interest, as whistleblowers often play an important role in bringing the violations to light.

The U.S. Securities and Exchange Commission has announced civil fraud charges against Nortel Networks Corp. and Nortel Networks Ltd., alleging improper revenue recognition by Nortel between 2000 and 2003, designed to make the company look appear more profitable. Nortel agreed to pay
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