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.

The conference began with an overview I provided of the country’s major whistleblower law, the False Claims Act. Its successes since 1986 inspired Congress to create both the new IRS Whistleblower Program in 2006, and the new SEC Whistleblower Program in the 2010 Dodd-Frank Act.

An excellent discussion of the False Claims Act in health care followed, led by Rick Shackelford of King & Spalding, LLP. Rick was joined by my former partner John E. Floyd of Bondurant, Mixson & Elmore, LLP; Daniel P. Griffin of Miller & Martin, PLLC; and Marlon Wilbanks of Wilbanks & Bridges, LLP.

Another panel then analyzed Georgia’s New 2012 “Taxpayer Protection False Claims Act, a 2012 state False Claims Act that I helped draft. This law encompasses all spending by state, county, municipal, and other local governments in Georgia. Nels Peterson, who as Georgia’s Solicitor General is charged with overseeing the implementation of the new statute, explained the framework of the law.

Because the new state FCA applies to fraud against local governments as well, we also heard how the Act might be used by cities and counties. Mary Carole Cooney, former Atlanta Deputy City Attorney, and Bill Linkous, former Dekalb County Attorney, provided their perspectives on how the new whistleblower law might expose fraud in various areas of local government spending.

SEC Whistleblower Chief Sean McKessey then joined us electronically to discuss the most pressing issues in bringing (and defending) SEC Whistleblower claims.

Moderator David Marshall of Katz, Marshall & Banks, LLP led a lively discussion of these issues with Mr. McKessey of the SEC, Tony G. Powers of Rogers & Hardin, LLP, and Jordan A. Thomas of Labaton Sucharow LLP. (I have written previously about our meetings with the SEC Commissioners and Director of Enforcement to provide input on the SEC’s rules for its new whistleblower program. Mr. Thomas helped craft those rules as a former Assistant Director, SEC Division of Enforcement.)

In “Federal Priorities and Procedures in Qui Tam Cases,” representatives of various U.S Attorney’s Offices provided their observations about what the government looks for in False Claims Act cases.

Although sequestration will not allow them to be reimbursed for their travel, AUSAs Edgar Bueno and Chuck Byrd trekked from Savannah and Columbus, Georgia, respectively because of their belief in the importance of this law in combating fraud. Each is the head of Affirmative Civil Enforcement in their respective districts. We were also fortunate to have AUSA Lena Amanti, who discussed qui tam cases based on her experiences as an AUSA in the Northern District of Georgia.

This full day included lunch remarks by the legislator primarily responsible for both of Georgia’s False Claims Acts, Rep. Edward Lindsey. He sponsored both the 2012 Taxpayer Protection False Claims Act and the 2007 State False Medicaid Claims Act.

Another excellent FCA practice discussion followed, led by Daniel R. Miller of Berger & Montague, P.C. Dan is the former Deputy Attorney General of the Delaware Department of Justice, and Past President of the National Association of Medicaid Fraud Control Units (NMFCU).

Joining Dan Miller on the relator’s side was Sara Vann of Morgan & Verkamp, LLP. Providing the defense view were Jason E. Bring of Arnall Golden Gregory, LLP and Jamila Hall of Jones Day, LLP.

IRS Whistleblower Office Director Stephen A. Whitlock then joined me from Washington to discuss the IRS Whistleblower Program. Since the last time I had been on a panel with Steve, the IRS has made a $104 million whistleblower award to UBS whistleblower Bradley Birkenfeld–who also got himself incarcerated after pleading guilty to a felony. While I could not entice him to discuss that case, we did explore the legal principles that led to this unusual result. (See our past discussion of how a whistleblower like Birkenfeld might have protected himself from criminal prosecution.)

Capping the day, the audience heard an excellent presentation from Paul Lawrence of Waters & Krause, LLP, about how bank fraud whistleblower claims can arise under two federal laws known as FIRREA and FIAFEA. FIRREA is the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, enacted in the wake of the savings and loan scandals. FIAFEA is the Financial Institutions Anti-Fraud Enforcement Act.

Based on immediate comments, our audience members received their money’s worth. I am not aware of another privately-organized conference with such a breadth of speakers on a variety of whistleblower laws.

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