Regarding this past Sunday’s 60 Minutes interview of our client David Nielsen,
Mormon blows whistle on church’s alleged “clandestine hedge fund”
On Sunday, May 14, 60 Minutes featured an interview with our IRS and SEC whistleblower client David Nielsen.
My colleague Richard Rubin and I are proud to represent this principled whistleblower.
#cbs #60minutes #whistleblower #finchmccranie #secwhistleblower #irswhistleblower #ensignpeak
In this week of new bank bailouts (following Silicon Valley Bank’s), a bipartisan group of five Senators has urged common sense improvements to the SEC Whistleblower laws. These Senators emphasize the “crucial role of whistleblowers” in protecting both investors and taxpayer funds.
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.
Our firm’s lawyers are uniquely suited to bring attention to meritorious SEC whistleblower claims. Our firm has the only former Senior Officer and Regional Director of the SEC who represents SEC whistleblowers, Walter Jospin. We have the ability and experience to evaluate a potential Whistleblower claim and determine if it will interest the SEC Division of Enforcement. If it does not, the case is lost. Few lawyers have that experience.
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..
These cases illustrate the importance of the False Claims Act to uncover and stop fraud and false claims in health care and other industries, which harm taxpayers by stealing taxpayer dollars needed to provide medical care and other services.
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:
$145 Million Settlement in Groundbreaking Health Care Fraud “Whistleblower” Case by Atlanta’s Finch McCranie LLP and U.S. Department of Justice
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.
Larry provided his observations about the importance of meaningful compliance programs to prevent and detect fraud within organizations. He continues to share his perspective gained from years of government service, private practice, and as general counsel to a major corporation, with in-house counsel who contact him for advice.
In a momentous decision that will impact many future cases, New York Attorney General Eric Schneiderman has just won a major victory in his pioneering tax fraud case against Sprint Nextel Corp.
The Appellate Division unanimously affirmed the trial court’s 2013 ruling (background discussed here) to allow Schneiderman’s first tax enforcement case under the New York False Claims Act to proceed.
The Complaint alleges that Sprint unlawfully failed to collect and pay $130 million in New York sales taxes on a portion of its revenue from fixed monthly access charges. Like the federal False Claims Act, the New York False Claims Act provides for recovery of three times the amount of damages incurred–“treble damages.”
A major aspect of Schneiderman’s victory was that it makes Sprint potentially liable under the New York False Claims Act for tax fraud that preceded the Act’s 2010 amendments to include tax violations. In fact, the court affirmed the trial court’s decision allowing the case to proceed in all respects:
The court properly denied the motion to dismiss the complaint in its entirety. Plaintiffs’ complaint adequately alleges that defendants violated New York’s False Claims Act (State Finance Law § 189[1][g]), Executive Law § 63(12) and Article 28 of the Tax Law by knowingly making false statements material to an obligation to pay sales tax pursuant to Tax Law § 1105(b)(2). Contrary to defendants’ interpretation, the Tax Law provision is not preempted by the Federal Mobile Telecommunications Sourcing Act (4 USC 116 et seq.).
The court also properly rejected defendants’ argument that the New York False Claims Act with respect to statements made under the Tax Law should not be given its stated retroactive [*2]effect. Defendants fail to show that the Act’s sanction of civil penalties, including treble damages, is so punitive in nature and effect as to have its retroactive effect barred by the Ex Post Facto Clause (US Const, art I, § 10).
We once again applaud the efforts of Attorney General Schneiderman and his office to protect the public’s purse though the New York False Claims Act. The case shows the value that tax whistleblowers can bring to stop those who refuse to pay their fair share of the tax burden.
The Attorney General’s announcement is linked here.
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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.
As the annual deadline for filing state and federal income tax returns has passed, honest taxpayers might be shocked to learn that the government will experience an estimated $350 billion shortfall between what is owed and what is collected, thanks to those who cheat on their taxes. To help plug the multi-billion-dollar tax gap, the IRS has instituted new whistleblower rules, but Michael A. Sullivan, a leading whistleblower lawyer, says the IRS needs to revamp its rules dramatically to encourage participation by the public to help the government recoup what is owed. Sullivan and Richard Rubin, an Atlanta-based federal and international tax attorney, plan to address the IRS in Washington, D.C. May 11 on how the rules can be revised to accomplish the law’s intended goals.
“The new rules are supposed to help citizens participate in closing the almost $350 billion tax gap by removing roadblocks to whistleblowers making claims, and by facilitating reward payments from those claims”
.Earlier this year, the Internal Revenue Service responded to sharp criticism of its existing rules by Senator Chuck Grassley (R-Iowa) by announcing new rules to broaden the kind of claims that will merit rewards to whistleblowers who alert the authorities to fraudulent taxpayers. However, Sullivan, attorney with Atlanta-based Finch McCranie, LLP, and author of the leading whistleblower blog, https://www.whistleblowerlawyerblog.com, says the new rules do not address key obstacles and create pointless delays for whistleblowers, which ultimately discourage citizens from reporting fraudulent taxpayers to the IRS. According to Sullivan, the new rules actually limit payment of whistleblower rewards in certain types of cases and thwart the intent of Congress to expand those rewards.
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We have written previously about how the “Troubled Asset Relief Program” (TARP) that began with the financial meltdown in 2008 would undoubtedly beget fraud that may be actionable under the False Claims Act. The qui tam provisions of the False Claims Act, the country’s major whistleblower law, allow whistleblowers (“relators”) who report fraud or false claims to share in the government’s recovery of damages.
Yesterday, the first TARP fraud criminal charges appeared. Federal prosecutors in New York’s Southern District announced the arrest of Charles J. Antonucci, Sr., former President and Chief Executive Officer of The Park Avenue Bank.
The criminal complaint filed on March 13, as summarized by prosecutors, alleges “self-dealing, bank bribery, embezzlement of bank funds, and fraud, among others. ANTONUCCI also was alleged to have attempted to fraudulently obtain more than $11 million worth of taxpayer rescue funds from the Troubled Asset Relief Program, or TARP. ANTONUCCI is the first defendant ever charged with attempting to defraud TARP. Additionally, ANTONUCCI was alleged to have used The Park Avenue Bank in a scheme to defraud two pastors of a Florida congregation out of more than $100,000 set aside to build a new church.”
Antonucci likely will not be the last former bank executive to have to surrender his passport and post bond. If it were not for the dearth of restrictions on permissible uses of TARP funds–which has provoked outrage as TARP recipients paid large bonuses–more TARP cases for “misuse” of TARP funds would have appeared by now. (We received many calls from potential TARP whistleblowers interested in bringing cases under the False Claims Act).
Nonetheless, Antonucci’s case alleges some of the more traditional types of fraud that will be prosecuted as they undoubtedly surface in the TARP program, especially as more TARP whistleblowers come forward.
With the billions used to fund TARP, those TARP whistleblowers may be motivated by the prospect of receiving 15-25% of money that the government recovers when the whistleblowers use the qui tam provisions of the False Claims Act to pursue TARP fraud.
The government’s full announcement is reprinted below.
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