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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Amid Attacks on the IRS, Recognition of the Best of the IRS Whistleblower Office

Now is the time to tell the story of Bob Gardner. Bob retires this week after 37 years of service with the IRS, most recently with the IRS Whistleblower Office.

Bob understands that public service is a noble calling for so many in our government. He epitomizes all that is good in fairly administering our internal revenue laws.

When IRS Whistleblower Office Director Steve Whitlock began hiring for the first “tax whistleblower” office that Congress had authorized in late 2006, Bob Gardner was
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Reforming the IRS–and Why We Need a Functioning IRS That Follows the Law

Could the IRS and Treasury Department have done a worse job in how they have handled the alleged “targeting” of conservative groups that applied for tax-exempt status before the 2012 elections?

My criticism starts–but does not end–with any IRS personnel who singled out “Tea Party” and similar groups for extra scrutiny based on their political affiliations. Any such acts cannot be tolerated..

But less noticed is what was being done–or not done–since at least mid-2012 by the Treasury Inspector General for Tax Administration (“TIGTA”).

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IRS & SEC Whistleblower Directors Join False Claims Act Officials for Conference on Whistleblower Issues

This week in a rare occurrence, the heads of the IRS and SEC Whistleblower programs and federal and state False Clams Act officials participated in one conference to discuss prosecuting and defending whistleblower cases.

Our firm has organized this “Whistleblower Law Symposium” since 2007 to explore developments in the growing number of federal and state whistleblower laws that seek to stop fraud against taxpayer funds.

“Sequestration” threatened to keep some major speakers from participating because of travel restrictions. The solution was “beaming in” Sean McKessey, Director of the SEC’s Office of the Whistleblower, and Steve Whitlock, Director of the IRS Whistleblower Office, to join our panelists by videoconference.

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Health Care Fraud Institute Discusses False Claims Act Developments

Each December, some of the nation’s top health care lawyers gather to discuss developments in prosecuting and defending health care fraud cases at the Health Care Fraud Institute in Atlanta. Because the qui tam law–the False Claims Act– is the government’s primary civil tool to combat fraud and false claims, the False Claims Act developments are a highlight of the discussion.

This year, I was honored again to be invited to participate as part of the False Claims Act panel with Rick Shackelford, an
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SEC and Justice Department Issue “Resource Guide to the U.S. Foreign Corrupt Practices Act”

The SEC Whistleblower Program authorized in 2010’s Dodd-Frank law has greater significance because the SEC and the Justice Department share jurisdiction over Foreign Corrupt Practices Act cases.

Today, SEC Director of Enforcement Robert Khuzami and Assistant Attorney General Lanny Breuer released the “Resource Guide to the U.S. Foreign Corrupt Practices Act.” They describe the Guide as “a unprecedented undertaking by DOJ and SEC to provide the public with detailed information about our FCPA enforcement approach and priorities.”

FCPA investigations have increased significantly in the past few years, and the dollar amount of these cases is often quite large. FCPA cases brought by SEC whistleblowers will only add to amount of FCPA violations uncovered.

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As IRS Commissioner Steps Down Today, How the Next IRS Commissioner Can Immediately Help Address the “Fiscal Cliff” by Expanding the IRS Whistleblower Program

Today marks the end of IRS Commissioner Doug Shulman’s tenure, just as President Obama and Congressional leaders shift to addressing the looming “fiscal cliff.” Rather than disrupt the process of narrowing the deficit, Shulman’s departure could actually assist it–in an important way that does not depend on raising tax rates.

The timing is perfect for a new IRS leader to back fully a bipartisan effort long advocated by Republican Sen. Chuck Grassley (R-Iowa) to tackle the “tax gap”–the more than $300 billion owed but not paid by tax cheats each year. Grassley seeks to expand the IRS Whistleblower Program to fulfill the promise of changes to the tax whistleblower law that Grassley sponsored almost six years ago.

Grassley should enlist as a ready ally President Obama, whose Justice Department is about to announce a record year of fraud recoveries in False Claims Act cases brought by whistleblowers. Grassley also has been the driving force behind that highly successful law since at least 1986.

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What the $104 Million IRS Whistleblower Award to Former UBS Banker Means for Tax Whistleblowers

With the current debate over raising tax rates becoming increasingly heated, a bipartisan, common-sense effort to recover more of the several hundred billion dollars that tax cheats already owe deserves far greater emphasis.

The IRS in September sent a smart and principled message that it is willing to encourage those with the best information about massive tax evasion to come forward. The IRS agreed that the billions in taxpayer funds it has begun to recover based on information from UBS whistleblower Bradley Biirkenfeld should warrant the first $100 million tax whistleblower award ever announced.
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Another Record Year–False Claims Act Recoveries Triple in FY 2012

Each Fall, the Justice Department tallies its recoveries of taxpayer dollars that have been pilfered through fraud directed at federal programs. A year ago, DOJ proudly announced $3 billion in recoveries in False Claims Act cases, and a record $8.7 billion recovered in the three years starting in 2009.

Late this year, DOJ will announce that its fraud recoveries tripled from $3 million in FY 2011 to more than $9 million in FY 2012. This trend of increasingly large recoveries of stolen taxpayer funds proves once again the effectiveness of laws like the False Claims Act, which incentivize whistleblowers to expose fraud through its qui tam provisions.

Although health care cases account for the vast majority of FCA recoveries, growing areas include banking, mortgage, and pension fraud cases involving fraudulently obtained taxpayer dollars, as my colleagues at Taxpayers Against Fraud point out. States are also using their own false claims laws to recover stolen taxpayer funds.

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Executive Summary of “Georgia Taxpayer Protection False Claims Act”

Recently, I was asked to explain the newly enacted “Georgia Taxpayer Protection False Claims Act” to some 200 city and county attorneys in Georgia. Although our firm has qui tam False Claims Act cases pending around the country, I take particular interest in making successful this law that I helped draft.

Since then, I have had many calls from attorneys about the new state False Claims Act, which includes qui tam provisions allowing whistleblowers to file suit and share in the recovery. Thus, I am summarizing here some major points about the law:

The Georgia Taxpayer Protection False Claims Act is a state version of the extremely successful federal False Claims Act (FCA). The FCA is the federal government’s primary civil tool for combating fraud directed at taxpayer funds. The majority of states already have such a law designed to stop and deter fraud against state government.

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First SEC Whistleblower Award Made Today–Reading the Tea Leaves

This morning’s announcement that the SEC has made its first award to a whistleblower under its new SEC Whistleblower Program established by Dodd-Frank leaves some clues about the message the SEC intends to send.

Speed: The SEC wasted no time–the award came barely two years after Dodd-Frank’s passage, and a little more than a year after the SEC finalized its SEC whistleblower rules. SEC Office of the Whistleblower Sean McKessy had seemed eager to have the SEC move quickly to utilize whistleblower information,
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