Settlements and judgments from cases involving fraud and false claims brought under the False Claims Act (FCA) totaled more than $3.5 billion in fiscal year (FY) 2015. That makes four years in a row that FCA recoveries have exceeded $3.5 billion. Of that $3.58 billion for FY 2015, a record amount—$2.91 billion—was recovered by the government because of cases initiated by whistleblowers. Continue reading
You’d think that Congress would take care of its own. When it comes to benefits, it seems as if they always do. So it might astonish you to know that, of all the classes of people protected by whistleblower laws, Congressional staffers have been left out in the cold. They are not protected.
In October, 2015, Major Bradley Podliska was fired while working for the House Select Committee on Benghazi. Major Podliska claims he was fired because he would not restrict the focus of his inquiry to former Secretary of State Clinton and the State Department. Continue reading
The U.S. Securities and Exchange Commission (SEC) has released its annual accounting to Congress regarding the Dodd-Frank Whistleblower Program. The latest report disclosed a 30 percent rise in whistleblower tips since 2012. In fiscal year (FY) 2015 alone, nearly 4,000 tips were collected.
But that’s not all that the report revealed. While whistleblower confidentiality must be upheld according to Dodd-Frank, the latest report noted certain characteristics that the whistleblowers have in common, by aggregating personal information.
One of the positives to arise from the 2008 financial crisis was the stiffening of regulations, and the protection of whistleblowers, regarding securities fraud, with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Under Dodd-Frank, the Office of the Whistleblower was established for the Securities Exchange Commission (SEC) to encourage those who have information about securities and commodities laws violations to notify the authorities. The Commodity Futures Trading Commission (CFTC) has similar rules and regulations under Dodd-Frank.
What Is Required of Whistleblowers?
The SEC entitles whistleblowers to an award if their evidence meets the criteria required to bring a case. The information must:
Medicare fraud is a huge illegal business that costs all of us. In fact, scamming Medicare has become so lucrative that Nigerian and Russian mobsters have gotten involved. One New York crime “family” moved to Florida, because Medicare fraud is safer than traditional criminal activities, and much more lucrative, according to Forbes magazine.
How much Medicare fraud exists? No one really knows.
How much has been stolen? Countless billions.
Whistleblowers perform an important service in our society, especially as companies grow bigger, corporate financial statements grow murkier, and cheating sometimes generates little more than a cynical shrug. Many whistleblowers have saved untold numbers of lives. Some have had their own lives threatened, and a few have died. At times they have been considered heroes, at other times, traitors.
You’ve likely heard of some of the more famous US whistleblowers, because movies have been made about them:
- Frank Serpico, who reported widespread corruption in the New York City Police Department in the Sixties and Seventies. Film: Serpico, starring Al Pacino.
When Joshua Harman decided to take on Trinity Highway Products LLC, questioning their redesign of a highway guardrail used on interstates across the United States, he was determined to expose what he saw as a safety hazard.
A 2005 redesign of the company’s ET-Plus end terminals had changed the action of the guardrail, Harman believed, turning it into a dagger when impacted, instead of a shock absorber.
Trinity’s ET-Plus had met federal requirements when it was assessed in 2000, but the changes had not been submitted for review, Harman’s case alleged.
A Hilton Head doctor was one of three whistleblowers who exposed health care fraud being committed by Health Diagnostic Laboratories (HDL) of Richmond, VA, and Singulex Inc., of Alameda, CA. Three cases were filed in South Carolina against the companies under the False Claims Act, which allows people with evidence of fraud to sue corporations on behalf of the U.S. government.
Because it can be risky to uncover fraud and expose the people or businesses behind it, provisions in the False Claims Act state that the person bringing the case — the whistleblower — may be awarded up to 30% of the funds recovered.
HDL and Singulex were accused of paying doctors $10 to $17 for referring their patients for blood tests, even if they weren’t medically necessary. The two companies were billing federal programs, including Medicare, for the tests and then sharing the profits with physicians in a kickback scheme that labeled the money as processing and handling fees.
The Mayo Clinic has agreed to pay more than $1.2 million to settle a federal lawsuit claiming it billed the government for lab tests that it never performed.
The U.S. Department of Justice said the lawsuit was filed under the False Claims Act, which allows “qui tam” suits by citizens acting as whistleblowers. The Justice Department became involved after the lead whistleblower, physician and attorney David Ketroser, filed his suit in 2007.
Ketroser and other whistleblowers will split about $229,800 as their share of the settlement.
Bert Louthian, a Columbia attorney who handles whistleblower cases, today expressed his dismay at a new survey that says employees who report misconduct are facing increased retaliation for doing so.
“Besides the fact that these courageous people are suffering abuse for pointing out corruption and fraud, we are particularly discouraged by the Ethics Resource Center’s conclusion that this problem of retaliation is likely to grow,” said Louthian, a South Carolina False Claims Act attorney and a partner at the Louthian Law Firm, P.A., in Columbia.
“We want workers in South Carolina and elsewhere to understand that they are legally protected when they report fraud and other misconduct in business. But in order to reap the benefits of the law’s protection, they often need the assistance of a law firm that employs experienced False Claims Act attorneys,” he said.