Whistleblower Blog Archives - Page 3 of 36

Whistleblower Blog

SEC Charges FCPA Bribery Scheme–Feds Collect $15 Million

July 13, 2011
Michael Sullivan

The SEC Whistleblower Program encompasses not only classic securities violations, but also violations of the Foreign Corrupt Practices Act (“FCPA”), a topic we have followed closely.

This past week, the SEC filed and settled an FCPA case against Armor Holdings, Inc., and collected more than $5.6 million, while the Department of Justice added almost $10.3 million in criminal fines.

The SEC charged that Armor Holdings, Inc. engaged in a bribery scheme to sell body armor to U.N. peacekeeping missions. The Commission also alleged that Armor Holdings violated the federal securities laws’ books and records and internal controls provisions by failing to account properly for commissions in 2001-2007.

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Why the SEC Whistleblower Rules Show A New Seriousness About Using Valuable Whistleblower Information

June 1, 2011
Michael Sullivan

The suspense over the final SEC whistleblower rules ended with the SEC’s release of its final whistleblower rules last week. The CFTC is to follow suit soon in announcing its own commodities whistleblower rules.

We have followed the SEC rules’ development, after being part of the small group of pro-whistleblower attorneys who met with the Commissioners and staff and urged changes to the draft rules to make them effective.

In January, I had the opportunity to visit with SEC Chairman Mary Schapiro,
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Fraud Enforcement Adds Teeth by Pursuing Individuals Allegedly Responsible for Organizations’ Frauds

May 16, 2011
Michael Sullivan

Last week the government’s criminal trial of former GlaxoSmithKline vice president and associate general counsel Lauren Stevens ended abruptly, as the judge found no basis to allow the case to go to a jury. Prosecutors had charged that she obstructed justice and made false statements to cover up the company’s improper marketing of the antidepressant drug Wellbutrin SR.

While she dodged a bullet, the case jolted lawyers handling health care fraud investigations, which are more typically civil cases under the False Claims Act.

Yet
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New Supreme Court False Claims Act Decision Today: Could This Court Be Any Friendlier to Qui Tam Defendants?

May 16, 2011
Michael Sullivan

False Claims Act history repeated itself today.

Since Congress acted decisively in 1986 to breathe life into the False Claims Act through amendments intended to expand use of the nation’s major anti-fraud whistleblower law, the Supreme Court and some lower courts have regularly intervened by imposing their own views on what Congress must have meant in writing the 1986 amendments.

Those decisions hostile to enforcement of the False Claims Act included Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662 (2008); United States ex rel. Totten v. Bombardier Corp., 380 F.3d 488 (D.C. Cir. 2004), cert. denied, 544 U.S. 1032 (2005); and United States ex rel. DRC, Inc. v. Custer Battles, LLC, 376 F. Supp. 2d 617 (E.D. Va. 2005), rev’d, 562 F.3d 295 (4th Cir. 2009)).

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Tax Whistleblower Attorneys At IRS Hearing Urge Treasury and IRS to Be True to Congress’s Intent in Expanding the IRS Whistleblower Program

May 12, 2011
Michael Sullivan

As has been reported today in Tax Notes and CCH, my colleague Richard Rubin and I addressed the IRS at its hearing yesterday on the proposed IRS Whistleblower rules. We were able to speak for roughly one-third of the hearing.

We focused on fundamentals. We urged that Treasury and the IRS must stay true to the intent of Congress to expand the number and types of IRS whistleblower claims that the IRS receives and pursues, and that merit awards to whistleblowers.

I argued
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IRS Whistleblower Rules Hearing on May 11 Attracts Global Attention

May 3, 2011
Michael Sullivan

A frequent question I receive is whether non-US citizens can receive rewards under the IRS Whistleblower Program. There is no limitation to US citizens, and persons around the world are eligible to participate in the IRS Whistleblower Program, regardless of citizenship.

Perhaps this is one reason why the May 11 hearing in DC on the IRS Whistleblower rules has attracted attention far and wide, from the India Times, to the American Banking and Market News, to the Northside Neighbor. We will
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Financial Fraud Cases Under False Claims Act Continue, As Deutsche Bank and MortgageIT Face Mortgage Fraud Suit

May 3, 2011
Michael Sullivan

The 2008 financial sector collapse has led to another False Claims Act case against financial institutions. Today, Deutsche Bank and MortgageIT were named in a mortgage fraud case under the False Claims Act, filed by U.S. Attorney Preet Bharara of the Southern District of New York.

The government’s Complaint alleges that Deutsche Bank and MortgageIT “repeatedly lied to be included in a Government program to select mortgages for insurance by the Government. Once in that program, they recklessly selected mortgages that violated program rules
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Tax Whistleblower Rules to “Expand” Whistleblower Program Actually Restrict and Discourage Participation, Say Whistleblower Lawyers

April 21, 2011
Michael Sullivan

Earlier this week we wrote about our urging the IRS to remain true to Congress’s plain intent to attract a greater number and variety of tax whistleblower claims. Our written comments on changes needed to the IRS Whistleblower regulation were published in today’s Tax Notes.

We will be in Washington on May 11 to address the IRS in person. In the meantime, here is some additional discussion of why these changes are so important.

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New IRS Whistleblower Rules Still Need Substantial Changes

April 18, 2011
Michael Sullivan

Since tax returns were due today, it was fitting that today was the deadline for comments on an important proposed new regulation for tax whistleblower claims.

We have submitted formal comments today to the IRS excerpted below, and have asked to speak to the IRS to urge important changes on May 11 in Washington. We thought it important to explain the history of Congress’s 2006 changes to the IRS whistleblower law–and emphasize that its clear intent was to attract a greater number and variety of tax whistleblower claims.

We believe the IRS needs to remain true to that principle, and thus amend its proposed regulation to reward any whistleblower who creates a financial benefit to the Treasury. That principle will dramatically simplify–and enhance–the IRS Whistleblwoer rules. We have also advocated to end needless delays in the program.

Exceprpts of our formal comments to the IRS are reprinted below:
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First Reported IRS Whistleblower Award Is Made–Finally!

April 8, 2011
Michael Sullivan

The floodgates may be opening for the IRS Whistleblower program for tax whistleblowers, which we have written about since its birth in late 2006.Today, a law firm announced that its client received yesterday a $4.5 million award after filing a Form 211 reporting tax violations by a financial services firm.

The IRS Whistleblower Office cannot comment, as whistleblower information is protected by section 6103 of the the Internal Revenue Code. The whistleblower has elected to remain confidential, as the IRS rules allow.

The
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COVID-19 Government Spending Must Be Protected by Whistleblowers–Through the False Claims Act and State False Claims Acts

August 11, 2022
Michael Sullivan

COVID-19 has required unprecedented government spending through the CARES Act and other measures. That spending creates countless opportunities for theft of funds desperately needed to fight the coronavirus.

The virus has made the nation’s major “whistleblower” law–the federal False Claims Act (“FCA”) and similar state False Claims Acts –even more essential. Both the federal and state FCA laws are civil statutes designed to combat fraud directed at taxpayer dollars.

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SEC Targets COVID-19 Fraud, and Its Success Will Depend on SEC Whistleblowers

June 23, 2020
Michael Sullivan

As the anxious public yearns for vaccines, treatments, and protections from the virus, the SEC has warned of a “substantial potential for fraud relating to COVID-19. The SEC’s enforcement actions against 23 companies are just the start, as more fraud will undoubtedly be uncovered.

Whistleblowers are critical to the SEC’s efforts to stop COVID-19 fraud. The SEC Office of the Whistleblower is authorized to pay monetary awards to whistleblowers whose information leads to an order of sanctions of $1 million or more.

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$465 Million Settlement in Our Client’s Qui Tam Whistleblower Case Over Pharmaceutical Manufacturer’s Underpaying Medicaid Rebates for New EpiPen Products

August 18, 2017
Michael Sullivan

Through a $465 million settlement, Finch McCranie’s Michael A. Sullivan and James J. Breen of the Breen Law Firm successfully represented a whistleblower whose qui tam case under the False Claims Act helped return hundreds of millions to the United States and various states for Medicaid rebates underpaid on new EpiPen products introduced in 2009.

The Department of Justice announced the settlement on August 17, 2017, of two qui tam cases pending in the District of Massachusetts, United States, et al. ex rel. sanofi-aventis US LLC v. Mylan Inc., et al., and our case, United States, et al. ex rel. Ven-A-Care of the Florida Keys, Inc. Mylan Inc., et al..

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$145 Million Settlement: Largest in History by Department of Justice and Finch McCranie, LLP in Any Skilled Nursing Facility Healthcare Fraud Case

October 24, 2016
Michael Sullivan

Today the Department of Justice announced the largest settlement in its history with a skilled nursing facility chain–a qui tam whistleblower case under the False Claims Act that our firm and our co-counsel Mark Simpson worked side-by-side with DOJ to prepare for trial.

We applaud the exceptional work of DOJ’s attorneys, as well the outstanding attorneys of the U.S. Attorney’s Office for the Eastern District of Tennessee. Below is our press release on today’s settlement:

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“The False Claims Act at 30”–What the Future Holds for Qui Tam Whistleblower Cases

September 19, 2016
Michael Sullivan

This past week our firm’s Larry D. Thompson, the former Deputy Attorney General of the United States, joined me for a panel discussion that I moderated on “The False Claims Act at 30,” at the annual Taxpayers Against Fraud Annual Conference in Washington, D.C.

Joining us on the panel were the Department of Justice’s Renee Brooker, an Assistant Director in the Civil Division with 25 years of DOJ experience; James J. (Jim) Breen, an accomplished qui tam lawyer whose cases have recovered almost $4 billion for federal and state taxpayers; and Neil Getnick, Chairman of TAF and an accomplished FCA lawyer in his own right.

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SuperLawyers Recognizes for 11th Year Finch McCranie’s Michael A. Sullivan

January 13, 2016
Michael Sullivan

We are proud to announce that Finch McCranie partner and head of its Whistleblower practice Michael A. Sullivan has been named to the “SuperLawyers” list for the eleventh consecutive year.
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Justice Department’s New Focus on Individuals’ Liability in “Yates Memo” Should Impact Qui Tam Whistleblower Cases under False Claims Act

September 10, 2015
Michael Sullivan

Yesterday the Justice Department apparently responded to the frequent lament, “Why has almost no one gone to prison for the financial crisis?” DOJ signaled that it will now look to hold responsible both culpable individuals and their companies for corporate misdeeds–both criminally and civilly.

If DOJ means what it says, this policy change is profound. It should hit corporate officers whose business models are based on fraud and false claims. It should also snare high level executives who turn a blind eye to wrongdoing, and who typically get away with it.

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SEC Whistleblower Office’s Stand Against “Silencing” Employees Through “Confidentiality” Agreements

May 28, 2015
Michael Sullivan

Sean McKessy of the SEC Whistleblower Program is right to continue his mission against muzzling whistleblowers through “confidentiality” agreements, for one simple reason:

Intimidating witnesses from reporting fraud is a form of obstruction of justice.

Although “confidentiality” agreements may appear innocent on their face, a company’s suggesting in any way that its employees refrain from reporting fraud or other violations of securities laws crosses the line. Too often, that is often the effect of these agreements–if not the intent as well.

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Qui Tam, IRS, CFTC, and SEC Whistleblower Claims Update: Today’s Whistleblower Law Symposium A Success

March 18, 2015
Michael Sullivan

Since 2007, top officials from federal and state agencies and many of the country’s experts in whistleblower cases have gathered in Atlanta to discuss and debate anti-fraud efforts at the Whistleblower Law Symposium.

Today I was excited to chair our Whistleblower Law Symposium once again, as these experts explored the latest developments in qui tam cases under the False Claims Act, and SEC whistleblower, CFTC whistleblower and IRS whistleblower claims. The breadth of expertise of today’s speakers was unusual.

First, top enforcement officials from California, Georgia and Texas shared their approaches and priorities under their state False Claims Acts. We were honored to hear from Britt Grant, Solicitor General of Georgia, about Georgia Attorney General Sam Olens’ impressive new efforts to stop the theft of taxpayer funds.

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Today’s SEC Whistleblower Award to Former Officer of Company Shows Flexibility of SEC Whistleblower Rules

March 2, 2015
Michael Sullivan

The SEC announced today its first SEC Whistleblower award to a former company officer. The award of a half-million dollars was for “original, high-quality information about a securities fraud,” which resulted in an SEC enforcement action with sanctions of more than $1 million.

Typically, corporate officers, directors and other corporate fiduciaries are not eligible for SEC Whistleblower awards when they learn of fraud through employee reports. The SEC built in flexibility in its rules, however, when the officer waits “more than 120 days after other
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