by Tim McInnis, Esq | May 16, 2022 | False Claims Act
HOW TO REPORT CYBER SECURITY FALSE CLAIMS FRAUD
Did you know the Department of Justice introduced a new IT cyber security false claims initiative in 2021?
You might benefit from this IT cyber security false claims program if you report government contractors and grantees who didn’t protect sensitive electronic data from hackers. Reporting such activities in the right way could entitle you to a monetary reward.
What kinds of misconduct is covered by the government’s IT cyber security false claims initiative?
Broadly speaking, it falls into two categories. The first concerns government IT contractors, consultants and auditors who were supposed to provide protection against unauthorized access to government networks, hardware, devices, computer systems, software and electronic files and who knowingly provided substandard cyber security products or monitoring services and then submitted false claims to the government.
The other involves ordinary government contractors and grant recipients, such as those in the defense, aerospace, NASA, GSA and healthcare industries, who don’t meet acquisition and contracting regulations (like FARS, DFARS , NASA FARS, NIST, CMMC, FedRAMP, and HIPAA) requiring them to adequately monitor and provide a certain level of security for the sensitive government data they handle when performing under their contracts. Often the data at stake is unclassified controlled technical information (UCTI), sensitive but unclassified information (SBU), personally identifiable information (PII), personal health information (PHI), or other types of confidential information.
Who might be in a position to bring a cyber security case against an IT Contractor?
The ideal combination is someone who is knowledgeable about the IT products and services, the regulatory and contractual requirements, and the facts concerning the fraud, including, possible security breaches and the failure to accurately report them when submitting false claims to the government. For example, someone who works in a cyber security, compliance and controls unit of a government contractor may be in a good position to bring a successful case.
What do you need to do to benefit from the government’s cyber security fraud initiative?
You can bring a “qui tam” lawsuit under the False Claims Act against the contractor or grantee. If your case is successful and the defendant returns money to the government, you could be entitled to between 15% and 30% of the recovery. To do so, you must hire an attorney and file a lawsuit in federal court. If you even suspect some organization is submitting false claims to the government and think you may want to report it you should immediately contact an experienced and trusted whistleblower attorney to protect your rights.
by Tim McInnis, Esq | Feb 4, 2022 | Our Cases
NYC whistleblower attorney Timothy J.
McInnis, and Chicago attorneys Stephen B. Diamond and Tony Kim, jointly announced a $2.5 million settlement against Call One, Inc., a Chicago-based provider of telecommunications
services. The settlement resolves allegations contained in a qui tam whistleblower complaint that had been led under seal in September 2018 in the Circuit Court of Cook County Illinois and ordered unsealed on January 25, 2021, by Circuit Judge Jerry A. Esq
The complaint, brought under Illinois’ False Claims Act by two former employees, alleged that Call One failed to collect and remit state taxes for telecommunications services. Specially, the ex-employees alleged that Call One failed to pay telecommunications excise taxes, simplified municipal telecommunications taxes, and telecommunications infrastructure maintenance fees on contracts with some of its sales tax-exempt customers, such as municipalities.
The State of Illinois, through the Of ex of the Attorney General, joined in the lawsuit, according to a notice of intervention led on January 22, 2021. The Attorney General’s of ex also negotiated the terms of the settlement, noted Attorney McInnis.
Under the terms of the Settlement Agreement, which became effective on January 21, 2021, Call One was to pay the State $2.5 million by January 22, 2021. Further, according to its terms, the two former employees collectively are to receive 15% of the settlement amount shortly after it is paid to the State and they can petition the court for up to a total of 25% within 21 days.
The former employees can also seek reimbursement for reasonable attorneys’ fees and expenses in a separate petition on or before that date, stated Attorney Diamond. All three attorneys for the whistleblowers express their appreciation to the State, and its attorneys and representatives in the Of ex of the Attorney General and Department of Revenue, for the decision to intervene in the case and see it through to a successful resolution.
The case is captioned, State of Illinois ex rel. John Havis and Robert Kintz v. Call One, Inc., Index
No. 2018 L 010085, Circuit Court of Cook County, Illinois, County Department, Law Division.
For additional information, please contact Timothy J. McInnis, Esq., of McInnis Law, at (212) 292-4573
by Tim McInnis, Esq | Dec 6, 2021 | Our Cases
New York, NY and New Haven, CT whistleblower attorneys Timothy J. McInnis and Charles Goetsch jointly announced a $1,318,456 settlement against Verra Mobility Corporation, an Arizona-based provider of transportation technology
goods and services, and related subsidiaries. The settlement resolves allegations in a qui tam
whistleblower complaint filed under seal in June 2020 in NY State Supreme Court and
unsealed effective November 30, 2021, by order of Justice James d ‘Auguste.
The complaint, brought under NY State’s False Claims Act by a former master electrician
employee, alleged Verra defrauded NYC DOT by installing school zone speed cameras that did
not comply with DOT conduit depth specifications and other electric codes, and by erecting
unnecessessary new poles where existing poles should have been used.
NYC, through its Corporation Counsel’s Office, joined the lawsuit, according to a court-filed
notice of intervention dated November 17, 2021. The City’s attorneys negotiated the terms of the
settlement, noted Attorney McInnis.
Under the terms of the Settlement Agreement, which became effective on November 22, 2021,
Verra is to pay the City $1,048,172 in damages and the former employee $270,284 (21%) as a
reward for initiating the lawsuit and prompting the City’s investigation. The former employee
also alleged whistleblower retaliation/wrongful termination by Verra and that claim, as well as
the amount of attorneys’ fees to be awarded to McInnis and Goetsch remain unresolved by the
Settlement Agreement, according to Attorney Goetsch.
Both attorneys for the whistleblower expressed their appreciation to the City, its attorneys and
representatives in the DOT, for conducting a thorough investigation, intervening in in the case
and seeing it through to a successful resolution. Attorney Goetsch further observed that similar
cases are likely to arise under the federal False Claims Act after the government’s infrastructure
buildup and construction gets underway, especially in the transportation infrastructure sector.
As with the State False Claims Act, the federal version also awards up to 30% of any
governmental recoveries to successful whistleblowers, McInnis explained.
The case is captioned, The State of New York, New City, ex. rel. William T. Marshfield, Sr., Index
No. 100449/2020, Supreme Court of the State of New York, County of New York.
For additional information, please contact Timothy J. McInnis, Esq., of McInnis Law, at (212) 292-
4573 (tmcinnis@mcinnis-law.com) or Charles Goetsch, Esq., of Charles Goetsch Law Offices, LLC
at (203) 672-1370 (Charlies@charlie@gowhistleblower.com).
by Tim McInnis, Esq | Jul 31, 2021 | Uncategorized
US Customs Duty Whistleblower Lawsuit Settles for $6 million
NYC whistleblower attorney Timothy J. McInnis announced today a $6m settlement against an importer of Chinese apparel and related companies. The settlement resolves a False Claims Act lawsuit against Joseph Bailey and his two New York City companies, Stargate Apparel, Inc. and Rivstar Apparel, Inc. The case began with the filing of a qui tam whistleblower complaint under seal in the United States District Court for the Southern District of New York in 2014. The settlement agreement among the whistleblower, the United States and the defendants was approved by U.S. District Judge J. Paul Oetken on July 28, 2021.
The action, initiated by a former employee, alleged that the defendants submitted invoices to the U.S. Customs and Border Protection (“CBP”) that understated the true value of the clothing that they imported into the United States in order to avoid paying millions of dollars in U.S. customs duties. The United States investigated the whistleblower’s allegations and joined in the lawsuit. All the defendants admitted the allegations against them as part of the civil settlement. Bailey also pleaded guilty to related criminal charges and was sentenced to 6 months in federal prison.
According to attorney McInnis, a former federal prosecutor, the whistleblower who brought this action will receive more than $1.2m (20%) for the information he provided. That unnamed person was “very courageous and extremely helpful to the United States during the ensuing
civil and criminal investigations,” according to McInnis. McInnis also acknowledge the tremendous work and successful results of the Assistant U.S. Attorneys and federal agents on the matter.
The case is captioned, United States of America ex rel. John Doe, Plaintiffs, v. Stargate Apparel, Inc., Rivstar Apparel, Inc. and Joseph Bailey,. Defendants, Index No. 1:14-cv-08991-JPO (S.D.N.Y.)
For additional information, please contact Timothy J. McInnis, Esq. of McInnis Law at (212) 292- 4573 or tmcinnis@mcinnis-law.com.
by Tim McInnis, Esq | Jan 2, 2021 | Uncategorized
How to report anti-money laundering violations?
How to report anti-money laundering violations?
Are you aware of anti-money laundering violations and want to report them to the authorities and receive a whistleblower reward? If so, you may be entitled to receive as much as 30% of any penalties recovered by the U.S. Department of Treasury or the U.S. Attorney General as a result of your information.
The Anti-Money Laundering Act of 2020 (AMLA), which was enacted as part of the National Defense Authorization Act for 2021, established a whistleblower reward program for reporting anti-money laundering violations. Under the AMAL people who report “original information” (not merely public information) of money laundering activities may be entitled to receive up to 30% from any covered action in which the Government recoups more than $1 million. The AMAL also permits whistleblowers to remain anonymous if they are represented by legal counsel.
What are the signs of money laundering to look out for and report? Such conduct is usually very complex and involves intricate financial arrangements used to circumvent Bank Secrecy Act (BSA) regulations.
These include:
a. setting up shell corporations and off-shore foreign entities
b. creating sham contracts and business arrangements
establishing “slush” funds and secrete or misidentified accounts
c. using improper financial wires and banking transfers
The ultimate goal of these machinations is to disguise the source, use or ownership of financial assets in order to hide illicit proceeds or further some type of illegal activity, such as, paying bribes, evading taxes, supporting terrorism, hiding involvement in criminal activity and defrauding investors.
You also may be entitled under the AMLA to bring a separate claim with the U.S. Department of Labor’s OSHA and federal court for any whistleblower retaliation you suffer for bringing forward your allegations. The AMLA protects money laundering whistleblowers from being fired, demoted, suspended, threatened, blacklisted, harassed or discriminated against in any other manner. It allows for double backpay with interest, reinstatement, compensatory damages (including emotional distress), attorneys’ fees and other forms of relief.
Whether you want to report anti-money laundering violations and/or file a claim for whistleblower retaliation, you should consult with an experienced whistleblower attorney as soon as possible. That is the best way to protect your rights.
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