by Author | Jul 10, 2014 | False Claims Act
Qui Tam Attorney Timothy J. McInnis will be participating in a CLE program titled “False Claims Act and Qui Tam Enforcement: All Points of View,” that is being presented by the NDNY-FCBA CLE Committee on July 15, 2014, from 9:00 a.m. to 1:00 p.m., at the United States Courthouse, located at 445 Broadway, in Albany, New York. Attorney McInnis will be discussing the pursuit of FCA cases from the relator’s counsel point of view. Among other things, he will cover “Practical Issues in Filing Relator Cases,” including, the importance of obtaining favorable government intervention decisions and how to maximize them.
by Author | Apr 14, 2014 | False Claims Act
On April 9, 2014, the US Attorney’s Office for the SDNY settled a Customs Fraud civil Qui Tam case under the False Claims Act against Dana Kay for $10 million. According to the government, DANA KAY, INC. and SIOUNI & ZAR CORPORATION tried to avoid paying the correct amount of customs duties by using phony invoices that understated the value of imported clothing apparel. The government alleged the defendants paid one amount to their overseas manufacturers but they then deducted a flat fee of $2.50 per garment set before calculating the duty owed on the apparel. The defendants recorded only the lower value on entry forms presented to Customs. By doing this, the defendants illegally sought to save millions of dollars in Customs Duties.
This Customs Fraud matter is known as a Reverse False Claim case under the False Claims Act. The whistleblower (an employee of the defendants) who brought the case will receive $2.3 million as his relator’s share.
Read more: http://www.justice.gov/usao/nys/pressreleases/April14/DanaKayandSiouniandZarSettlementPR.php
by Author | Apr 14, 2014 | False Claims Act
Last week federal courts issued two Great Relator’s Share Decisions. In an appellate case, the 8th Circuit Court of Appeals held that two Whistleblowers were entitled to a significant percentage of recoveries that the federal government tried to keep them from receiving. The government had tried unsuccessfully to minimize the whistleblowers’ contributions after recovering $48 million through their assistance. The appellate court was not having any of it (even citing an earlier opinion where the court called the government “disingenuous”) and awarded the whistleblowers more than $8 million. See US ex rel. Rille v. PricewaterhouseCoopers LLP, No. 11-3514 (8th Cir. April 10, 2014).
And in a district court decision, the District Court for the Eastern District of Missouri, awarded the Whistleblower 19% of the amount the federal government had recovered from a settlement of the whistleblower’s case. The government took the position that the whistleblower should only get the absolute minimum allowed, namely, 15%. After considering all the pro’s and con’s of the whistleblower’s contribution and conduct, the court said that 19% was an appropriate award. See US ex rel. Peterson v. Sanborn Map Co., No. 4:11CV000902, E.D. Mo. April 10, 2014.
Regrettably, as in these cases, many Whistleblowers end up having to fight the government for their rightful share of a relator’s award. Fortunately, it seems that most of the time the courts tend to rule in favor of the whistleblowers and against the government. Relators and Whistleblower Attorneys can all look forward to the day when the government decides it is wiser to use its litigation resources to fight the fraudsters rather than the whistleblowers who sacrifice so much in aiding the government.
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).
