Whistleblower Blog Archives - Page 29 of 36

Whistleblower Blog

Comments–Whistleblower Lawyers, Other Attorneys, and Clients on the Whistleblower Lawyer Blog

February 22, 2007
Michael Sullivan

Since we began the Whistleblower Lawyer Blog to discuss topics of interest to attorneys, potential whistleblowers and others about developments in the new IRS Whistleblower Rewards Program, in qui tam litigation under the False Claims Act, and other whistleblower developments that might be of interest to other lawyers or whistleblowers, we have received some very positive feedback.

We have discussed not only how the IRS Whistleblower Program and the False Claims Act work, but we have also tried to highlight specific
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New Whistleblower Protections Approved by House Committee

February 21, 2007
Michael Sullivan

Recognizing how important whistleblowers are to stopping fraud, the U.S. House Oversight and Government Reform Committee today approved the Whistleblower Protection Enhancement Act (H.R. 985).

The new whistleblower protections would apply to federal employees and government contractors. The law would establish whistleblower protections for scientific, intelligence and transportation security employees. It would also apparently mean that officials would investigate whether security clearances are revoked as retribution for a whistleblower’s reporting allegations of waste, fraud or abuse.

Congressman Henry Waxman (D-Cal.) introduced the bill last week. Additional amendments would strengthen the effectiveness of the whistleblower provisions.

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Medicare Fraud Indictments in Los Angeles

February 20, 2007
Michael Sullivan

We find it staggering to read about how blatant Medicare fraud can be, which often provokes a whistleblower to step forward. Today’s L.A. Times reports on a shameless scheme to defraud Medicare:

Elderly and mentally ill patients allegedly were offered doughnuts, candy and other gifts to lure them into more than $12 million worth of unnecessary respiratory treatments that were fraudulently billed to Medicare, according to the Indictment. Doctors and administrators were charged, according to this report.

What can you say about such criminality,
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State Whistleblower Act Is a Powerful Tool in Texas–But Could Produce Even More Medicaid Fraud Recoveries

February 20, 2007
Michael Sullivan

Whistleblower suits that reveal Medicaid fraud in Texas have grabbed the attention of the Texas Legislature–which apparently recognizes how powerful state False Claims Acts can be.

Today’s Houston Chronicle reports that Texas is working through a “backlog” of Medicaid fraud cases, the top 20 of which could bring another $700 million to the State (and presumably a significant amount to whistleblowers).

Whistleblower cases have been so effective that the legislators asked what more could be accomplished with more resources provided to pursue these fraud
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Watching the New IRS Whistleblower Procedures Take Shape

February 19, 2007
Michael Sullivan

We are excited to see the new IRS Whistleblower Office’s procedures being developed. We obtained a copy of a recent letter from IRS Commissioner Mark W. Everson, describing how the new Whistleblower procedures are taking shape, to Senator Charles Grassley.

Senator Grassley has been instrumental in pushing for effective whistleblower laws, both in qui tam litigation under the False Claims Act, and now in the new IRS Whistleblower Program. Here is an excerpt of Commisioner Everson’s January 29, 2007 letter describing the implementation of the new IRS Whistleblower Program:

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Potential Whistleblowers: IRS Offers Program for Employers “Back-Dating” Stock Options

February 14, 2007
Michael Sullivan

We are encouraged that the IRS is taking action in response to the fraudulent practice of “back-dating” of stock options. Potential whistleblowers may wish to see the IRS’ description of its program to deal with an aspect of this problem.

Here is an excerpt from the IRS’ announcement of how it is permitting employers to “step forward” and pay a penalty, and a related IRS Release can be read here:

(From IRS Release:)

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Lincoln’s Law and Whistleblower Claims

February 8, 2007
Michael Sullivan

Taxpayers every day lose money because of fraud against their government. Current examples include government contracting fraud in Iraq, procurement fraud regarding the efforts of the Federal Emergency Management Agency and Hurricane Katrina and numerous false claim schemes under both the Medicare and Medicaid programs. Those who are bent of fraud are usually clever and devious. This is the very reason why President Abraham Lincoln enacted the False Claims Act during the American Civil War in 1863.

During the Civil War, as today, there were
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Iraq Indictments:TheTip of the Iceberg

February 8, 2007
Michael Sullivan

As former federal prosecutors, it is always of interest to us to read about grand jury indictments involving fraud schemes. We have presented many such indictments to grand juries ourselves and know how the system works. On Tuesday of this week, a grand jury in Washington, D.C., returned an indictment against three Army Reserve Officers and two civilians based on allegations that they steered more than $8.6 million dollars in Iraqi reconstruction funds to a contractor in exchange for a variety of kickbacks and other
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New IRS Whistleblower Office Has First Director

February 2, 2007
Michael Sullivan

We saw more good news when the IRS announced the first director of the new IRS Whistleblower Office–Stephen A. Whitlock. Mr. Whitlock was formerly in charge of the Office of Professional Responsibility. He also had led anti-fraud and abuse programs at the Defense Department.

The IRS’s press release is reprinted here:

IRS Begins Work on Whistleblower Office; Whitlock Named First Director

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State Enforcement Efforts Disappointing In Combatting Medicaid Fraud

February 2, 2007
Michael Sullivan

According to a recent report issued by the Inspector General of the Department of Health and Human Services, State enforcement results regarding Medicaid fraud cases have been disappointing. Virtually every state in the country has a State Medicaid Fraud Control Unit whose principle job is to uncover and detect fraud and to prosecute the offenders. Such units are also tasked with the responsibility of attempting to recover monies fraudulently obtained from the Medicaid program. Because Medicaid is approximately twenty (20%) percent of the total federal
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IRS to Scrutinize Derivatives–Do They Allow Offshore Investors to Avoid Withholding Taxes on U.S. Stock Dividends?

July 20, 2007
Michael Sullivan

IRS Seeks Documents from Citigroup and Lehman Brothers Holdings on Derivatives

Now that Congress has created a meaningful IRS Whistleblower Rewards Program, tax whistleblower attorneys took note of yesterday’s report that the IRS is looking into whether derivatives trades for hedge funds and other investors are being used to avoid tax withholding obligations, according to the Wall Street Journal yesterday. The IRS reportedly has issued “Information Document Requests” to Citigroup and Lehman Brothers Holdings to find out.

As Reuters reports, the derivatives trades in
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Pharmaceutical Company Bristol Settles Massachusetts Lawsuit Over Pricing of Drugs

July 20, 2007
Michael Sullivan

Alleged Overcharging for Prescription Drugs Leads to $13 Million Settlement in Boston

Pharmaceutical fraud harms the Medicare and Medicaid programs–and the citizens who pay for them. Drug companies’ alleged overcharging for prescription drugs has led to fraud investigations and lawsuits by whistleblower attorneys in the past. This week, shortly before trial, pharmaceutical manufacturer Bristol-Myers Squibb Co. reportedly agreed to pay $13 million to resolve allegations that it overcharged for its Taxol cancer medicine and other drugs.

The settlement follows a ruling last month
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In Case Alleging Fraud Against IRS in Misuse of Tax Shelters by Former KPMG Partners, Judge Dismisses Charges Against 13 Defendants

July 16, 2007
Michael Sullivan

Most Defendants in KPMG Case Escape Prosecution–At Least For Now

As we have written about previously, abusive and fraudulent tax shelters promoted by accounting firms are high on the list of conduct that the IRS (and IRS tax whistleblowers) seek to stop. Today, the government’s prosecution of 13 former KPMG partners and other executives was derailed–at least for now–when the trial judge dismissed charges against them, while allowing the charges to remain against other defendants.

Judge Lewis Kaplan had already ruled that these defendants’
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IRS Declares That Tax Fraud and Evasion from Back-Dating of Stock Options Is a Top Priority

July 15, 2007
Michael Sullivan

IRS Tax Whistleblowers with Knowledge of Stock Option Backdating Should Take Note

Now that the IRS has an effective IRS Whistleblower Rewards Program for whistleblowers who report tax fraud, tax evasion, or other violations of the Internal Revenue laws, the IRS’ recent announcement of focusing on back-dating of stock options should be interesting. In continuing our past discussions of claims under the IRS Whistleblower Rewards Program, we point out the tax fraud that the IRS has decided to target involving back-dated stock options.

The IRS recently announced that backdating of stock options is a “Tier I Compliance Issue and therefore is a mandatory examination item for taxpayers with backdated stock option grant and/or exercise prices.”

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False Claims Act Case Against Texas Computer Services Firm Is Settled

July 12, 2007
Michael Sullivan

Fraud and False Claims by Government Contractor in Dallas Leads to $2.6 Million Settlement with Justice Department

The statute most used by whistleblowers and whistleblower attorneys has resulted in yet another recovery of money for false claims. The Justice Department has announced that Affiliated Computer Services, Inc. (ACS) has agreed to pay more than $2.6 million to settle a False Claims Act case.

The government alleged that ACS, from 2002-2005, inflated its claims for payment of government funds for recruiting and enrolling individuals in various
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New State False Claims Act with Qui Tam Whistleblower Provisions Is Signed in Florida

July 7, 2007
Michael Sullivan

AARP Applauds State Law to Combat Medicaid Fraud with Qui Tam Whistleblower Approach

We were pleased to see that Florida has joined New York, Georgia, Oklahoma and more than a dozen other states in creating a State False Claims Act with qui tam whistleblower provisions similar to the federal False Claims Act. As we have discussed at length on this whistleblower lawyer blog, Congress has created financial incentives for states to pass whistleblower laws with qui tam
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Medicare Fraud Convictions for Florida Home Health Care Operator for False Claims

July 6, 2007
Michael Sullivan

Durable Medical Equipment Company Received Kickbacks from Pharmacy Owners in Health Care Fraud Case

In a Medicare fraud case of interest to whistleblowers and whistleblower attorneys, a Miami a federal jury convicted a home health care operator of conspiracy to defraud and submit false claims and receive kickbacks, conspiracy to commit health care fraud, and three counts of receiving kickbacks. Gisela Valladares, owner of PRN Home Health Care, Inc., faces up to 30 years in prison.

According to the Justice Department,
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Pharmaceutical Manufacturers Pursued for Medicaid Fraud by Texas Attorney General’s Office

June 27, 2007
Michael Sullivan

Whistleblower Reveals Alleged Drug Price Schemes to Defraud Medicaid

When drug companies hide the true prices charged for prescription drugs, the pharma companies can violate laws protecting state Medicaid programs from being defrauded by “overpaying” for drugs. The experienced Medicaid fraud prosecutors of the Texas Attorney General’s Office have announced such allegations against three pharmaceutical manufacturers for tens of millions of dollars in Medicaid fraud in Texas.

For pharmaceutical products to be eligible for Medicaid reimbursement, the law generally requires that manufacturers accurately report
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Home Health Care Operator Receives Prison Time for Medicare Fraud

June 26, 2007
Michael Sullivan

False Claims Act Case Continues Over Health Care Fraud Allegations

As other whistleblower attorneys who were former federal prosecutors know, Medicare fraud may sometimes lead not only to a qui tam whistleblower lawsuit, but also to prison time for the guilty party. A former home health care company owner now faces almost three years in prison after being convicted of defrauding Medicare of more than $1 million.

U. S. District Judge Nancy Edmunds in Detroit sentenced Amjad Khan, a certified public accountant
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Nursing Home Abuse and Fraud Exposed by Nurses in Qui Tam Whistleblower Case

June 24, 2007
Michael Sullivan

Medicare Fraud and Medicaid Fraud Alleged by Nurses at Nursing Homes

Two nurses disturbed by nursing home abuse and neglect of nursing home residents–who apparently were subjected to gross nursing home malpractice–are the “whistleblowers” in a nursing home False Claims Act qui tam lawsuit in Missouri, which the U.S. Attorney’s Office in St. Louis has recently announced it has joined. The whistleblower suit alleges that the nursing home operator defrauded Medicare and Medicaid by providing care that was essentially “worthless” to the nursing home
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