by Author | Mar 24, 2014 | False Claims Act
What is the Biggest Mistake Whistleblowers Make? It’s very simple. They wait too long to consult a competent Whistleblower Attorney.
How does waiting too long adversely affect a Whistleblower’s chance of success? Here are 10 answers:
- 1. The statute of limitations may run out. Most Whistleblower lawsuits must be brought within a certain period of time or they are subject to automatic dismissal. For lawsuits brought under the qui tam provisions of the federal False Claims Act (FCA), that period of time is 6 years. And, the time period for retaliation claims under the FCA is 3 years.
- 2. The amount of the recovery, and therefore the size of any whistleblower reward, may be diminished. Even if the qui tam action is brought within the statute of limitations and thus survives a motion to dismiss, the size of the recovery will usually be limited by the amount of the government damages sustained during the non-time barred years.
- 3. Someone else may get the Whistleblower Reward. Most qui tam statutes have a “first to file” rule. If another whistleblower starts a similar lawsuit first, then you may end up being shut out of the reward.
- 4. The things you know about may become public. Most qui tam statutes have a “public disclosure bar” that could preclude you from pursuing your lawsuit, or at least make it harder to do so successfully, after there has been any type of public dissemination of the information you know about. This includes press and media coverage, Internet postings, public hearings, administrative audits, etc.
- 5. The government may learn of your allegations on its own and start an action without your assistance. Most of the time, once a criminal, civil or administrative government action begins a Whistleblower cannot recover a reward if he or she later provides related information and assistance.
- 6. If you wait until you’ve left the organization that is committing the misconduct or retaliating against you, you may have lost the opportunity to gather important documents, evidence and testimony. As a result, you may find it harder to present a compelling case to the government as it makes its decision about joining your lawsuit, and you will certainly lessen your value as a source or witness for the government’s attorneys and investigators. You likewise hurt your lawyer’s chance of winning any potential retaliation case.
- 7. You may not have the requisite specific “claim” details that are needed to survive a defendant’s challenge to your complaint under so-called Rule 9(b) and your case might get dismissed on that ground.
- 8. Your case will invariably be harder to prove if you are not still at the organization and as more time passes. Memories fade. Records get lost or destroyed. Witnesses move on. Your credibility lessens.
- 9. You don’t get to benefit from a lawyer’s advice as you face difficult and challenging issues that can likely affect your work and personal life.
- 10. The longer you wait the more difficult you will find it to retain a reputable whistleblower attorney to take your case. Most experienced attorneys take whistleblower cases on a “contingency basis,” where there is no fee unless the case is successful. Because of all the factors discussed above, experienced Whistleblower Attorneys and law firms are less willing to assume the increased risks for contingency arrangements on older cases.
What is the disadvantage of going to a competent whistleblower attorney very early on? That is also simple. None. Your communication with him or her will be confidential. You can decide to wait until you are ready to act. You can decide to simply provide your information anonymously and not seek a reward. Or, you can even choose to do nothing. Moreover, most experienced whistleblower lawyers and law firms typically do not charge a consultation fee. So why wait?
by Author | Mar 17, 2014 | False Claims Act
Can a whistleblower report Sales Tax Evasion by bringing a false claims act (FCA) case?
Yes. In some states, such as New York, there are state false claims acts that expressly provide for bringing sales tax evasion cases. On March 14, 2014, New York State Attorney General Eric T. Schneiderman announced a $6.2 million settlement with Lantheus Medical Imaging, a former subsidiary of Bristol-Myers Squibb. NYS alleged that Lantheus did not pay a total of $2.2 million in applicable New York State business franchise taxes, New York City corporation taxes or MTA surcharges from 2002 to 2006 on income from Lantheus’ sales of medical imaging products to hospitals, clinics and other facilities in New York, as well as from its training and servicing activities. The settlement resolved a NYS False Claims Act case that began with a whistleblower filing a qui tam complaint. The whistleblower who brought the case will receive just over $1.1 million.
Read more http://www.ag.ny.gov/press-release/ag-schneiderman-announces-62-million-settlementwith-lantheus-medical-imaging-bristol
by Author | Mar 14, 2014 | False Claims Act
The Fourth Circuit continues to issue rulings favorable to whistleblowers and Whistleblower Law Firms. Most recently it addressed the issue of whether certain state-created loan corporations could be named as defendants under the False Claims Act (FCA). The lower court said they could not because they were “arms-of-the-state” and thus not “persons” under the FCA. The appellate court found otherwise with respect to two of the three named defendants-appellees, at least based on the face of the relator’s qui tam complaint. It therefore reversed the lower court and remanded proceedings to allow limited discovery on whether, in fact, the “arm-of-the-state” doctrine barred the action.
This case involved allegations that numerous student loan corporations defrauded the US Department of Education. Specifically, the relator alleged that the loan corporations submitted false claims for Special Allowance Payments (“SAP”), a generous federal student loan interest subsidy. This was done by engaging in noneconomic sham transactions to inflate loan portfolios eligible for SAP, according to the relator’s complaint. As a result the Department of Education overpaid hundreds of millions of dollars to the loan corporations.
The lawsuit is captioned: United States ex rel. Oberg v. Pennsylvania Higher Education Assistance Agency, et al, No. 12-2513 (4th Cir. March 13, 2014).
by Author | Mar 14, 2014 | False Claims Act
Are Hospice Fraud cases challenging?
Yes, especially if they are based on allegations of defrauding Medicare by inappropriately admitting non-terminal patients to hospice service. This is because a hospice that has engaged in this practice often has paperwork in the patients’ charts which appear to justify the admissions. This includes certifications from physicians saying the patients are terminally ill and not expected to live for 6 months. The challenge is proving that the hospice operators knew these certifications were false at the time they were made.
However, there still have been successful hospice fraud cases. And, a settlement involving one was announced on March 13, 2014. Hospice Compassus, which previously operated in Alabama, agreed to pay the United States $3.92 million to settle two qui tam complaints filed under the False Claims Act. The two relators who filed the suits against Hospice Compassus will receive $712,000.
Read more http://www.justice.gov/usao/aln/News/March%202014/13%20Mar,%202014%20Hospice.html
by Author | Mar 14, 2014 | False Claims Act
Can a whistleblower report Hospital Kickbacks by filing a qui tam case under the False Claims Act?
Yes. On March 13, 2014, the US DOJ announced it settled such a case with Memorial Hospital in Ohio for $8.5 million. There the government alleged the hospital violated the False Claims Act (FCA), Anti-Kickback Statute (AKS) and Stark Statute by engaging in improper financial relationships with referring physicians.
The settlement involved allegations of an improper “joint venture” among Memorial and a pain management physician and ophthalmologist, who purchased intraocular lenses and then resold them to Memorial at inflated prices.
This is a somewhat unusual FCA case in that Memorial self-disclosed the unlawful transaction to the government. Hats off to Memorial for “doing the right thing.”
Read more http://www.justice.gov/opa/pr/2014/March/14-civ-270.html
by Author | Mar 12, 2014 | False Claims Act
Can a relator get a second bite at the apple in spite of his Whistleblower Attorney’s early procedural errors?
Tim McInnis Esq.
The US Court of Appeals for the Second Circuit recently saved a whistleblower’s lawsuit from dismissal caused by his own lawyer’s missteps. In this case, the whistleblower-relator filed a complaint in the SDNY under the qui tam provisions of the federal and New York State’s False Claims Acts (FCAs) against two major construction companies.
He alleged the defendants overbilled the governments for public construction projects, including the post-9/11 One World Trade Center. After investigating the allegations, the federal and state authorities declined to join the action. Thereafter, the relator’s attorney sent the district court judge an informal letter saying that, “I have spoke[n] to my client and in view of the government’s decision not to intervene he has decided not to pursue this matter any further.” Later, the relator found out that a different US Attorney’s Office (EDNY) was investigating the matter and he re-filed his case in that district.
Thereafter, the defendants persuaded the new district court judge to throw the case out on the basis that the old case had been previously “dismissed with prejudice” and thus could not be re-instituted. Turns out the district court judge was in error. As the Second Circuit noted: in order for a case to be dismissed “with prejudice” under Fed. R. Civ. P. 41, certain representations have to be. Since they had not been made in this case, the original case was deemed to have been dismissed “without prejudice” and the relator was permitted to go forward with his action. Lucky break. The whistleblower lawyer could have avoided the entire episode if he had filed a formal “stipulation of dismissal without prejudice” under Rule 41.
This case is captioned: Magdy M. Youssef, Plaintiff-Appellant, – v – Tishman Construction Corporation, Turner Construction Company, Defendants-Appellees. Docket No. 12-4135, 2014 U.S. App. LEXIS 4439 (2d Cir.).
by Author | Mar 9, 2014 | False Claims Act
How much will whistleblower recover in stunning $614 million Mortgage Fraud False Claims Act (FCA) qui tam settlement between the government and JP Morgan Bank? The government announced on March 7, 2014 that it will be paying the whistleblower $63.9 million. While that is a very large amount, it is less than the potential range of the whistleblower’s reward under the FCA, which was between $92.1 million (15%) and $153.4 million (25%). One explanation for this difference is that the government may have uncovered some parts of the misconduct independently of the information and assistance provided by the whistleblower. The whistleblower reportedly had worked in the government insurance unit at JP Morgan for a number of years. The United States is willing to pay significant amounts of money for assistance in cases like this to help uncover and prosecute difficult to detect and complex frauds affecting government programs.
On February 4, 2014, the government announced that JP Morgan agreed to pay $614 million to settle charges that it presented approximately 500 defective mortgage loans for government insurance coverage and guarantees by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) that improperly overstated the creditworthiness of the borrowers or in some other way had not complied with the bank’s mortgage underwriting obligations. When the homeowners defaulted on the loans, the government (meaning the American taxpayers) was stuck having to pay for them.
The JP Morgan case had begun with the filing of a whistleblower qui tam complaint in January 2013 in the Manhattan federal court and was wrapped up in only about 13 months. Typically, False Claims Act (FCA) cases take much longer to get resolved, sometimes many years. So the JP Morgan settlement is noteworthy for both its sheer size and the short time in which it was completed. Read more http://www.justice.gov/opa/pr/2014/February/14-civ-120.html
by Author | Mar 7, 2014 | False Claims Act
Medicare Fraud Criminal Plea. An unlicensed Detroit-area physician pleaded guilty to billing Medicare for $11.5 million and making it look like the healthcare services were performed by licensed medical doctors when they were not. Jose Mercado-Francis, MD faces 10 years imprisonment when he is sentenced.
This case does not appear to have been initiated by the filing of a civil qui tam False Claims Act complaint.
Read more http://www.justice.gov/opa/pr/2014/March/14-crm-240.html
by Author | Mar 7, 2014 | False Claims Act
Infrequent Price Fixing FCA Case settled March 7, 2014. Contract shippers Sea Star Line has agreed to pay $1.9 million, and Horizon Lines has agreed to pay $1.5 million to settle qui tam whistleblower allegations that they conspired to fix the price of shipping contracts on which they were bidding. The contracts were for shipping routes between the continental United States and Puerto Rico and were for the delivery of US Mail (Postal Service) and food (Department of Agriculture). The whistleblower will receive $512,719 for his information and assistance.
Read more: http://www.justice.gov/opa/pr/2014/March/14-civ-242.html
by Author | Mar 5, 2014 | False Claims Act
Whistleblower lawyer highlights US Tax Court ruling. Relator who helped recoup $75 million from Kyphon, Inc. for DME kickbacks and false billings for improper inpatient admissions and received almost $7 million in relator share payments could not treat his award as a capital gains (for “selling information” to the Government) and instead had to pay taxes on the award at the ordinary income rate. This case is captioned Patrick v. Comm’r, 2014 U.S. Tax Ct. LEXIS 5 (T.C. Feb. 24, 2014).
