Whistleblower Law Blog : Whistleblower Lawyer & Attorney : LaBovick Law Firm, Florida : Federal False Claims Act, Qui Tam

Cindy Wade, a former employee at the St. Lucie Humane Society, has filed a wrongful termination suit against the rescue shelter, only weeks after the St. Lucie Humane Society had been cleared of allegations of animal abuse.

Wade, a former veterinarian technician at the shelter, said she had witnessed many occurrences of animal cruelty by some of the employees at the shelter. The sheriff’s office has since conducted a full investigation and found no evidence supporting her claims.

She filed the wrongful termination law suit on Monday. The claim is that she was fired in December as a result of being a whistleblower. She had first reported the allegations to police in November, a month before her termination.

The director of shelter operations said he suspended Wade because of work-related issues and for making false allegations against the shelter — not for being " a whistle blower."

Wade is seeking more than $15,000 in damages and is also seeking reinstatement of her position at the shelter. The whistleblower lawyer is also seeking a court order that would stop the St. Lucie Humane Society from firing her in the future for a related cause.

Wade is quoted as saying "(The suit is) going to get them more exposure, "It's going to bring more attention to their needs. What I want most is the best quality of care they can get."

We will keep you informed as this case develops and further information becomes available.

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At the present time politicians wonder “Why are we so hated?” They sit in total befuddlement about why they are “So poorly regarded.” Basically, politicians are about as loved and trusted as snakes, alligators, used car salesman and ambulance-chasing-low-rent lawyers. But then you get stuff like New York congressman Michael Grimm’s new bill that gives Wall Street and big corporations the right to rip off Americans and not have to worry about Whistleblowers any longer! Of course, the rest of the politicians are lining up to pass the bill because big business and Wall Street needs a little legal protection from being called out for ripping off America.

The Grimm Act, which is listed as House Bill 2483, is being called the “Whistleblower Improvement Act” and was written and created to take down the corporate whistleblower protections we finally have in the United States. It is basically a bill to stop Whistleblowing! America needs to read this bill and write their congressperson to stop being a corporate lackey and vote against the bill.

The bill creates a loophole in the two most important whistleblower laws to come out over the last 50 years. The first is the Dodd-Frank Act, which reformed Wall Street, and the second is the Sarbanes-Oxley Act, which reformed corporate America and their creative accounting departments and led to things like Enron and World Com!

The US Securities and Exchange Commission (SEC) is a busy agency. They cannot investigate every company in America. However, when they receive a tip or a report from an insider, they are able to quickly identify the wrongdoers and bring them to justice. The Grimm Act will undermine the SEC’s ability to take action on those tips.

Under the new law, the SEC would be required to put the wrongdoers on NOTICE and warn them that their company is a suspect. Do you think that may “tip them off,” so they cover their tracks? I DO! This is the same thing as telling the police to warn a drug dealer they are about to come over and arrest him and ask him to “not destroy the drugs and evidence”! Law enforcement cannot be effective in this environment, and the American people deserve better legislation than this corporate protectionist bill.

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I have one question: When will the prosecutions start? What prosecutions? Financial institutions across America are filled with high ranking officials who all participated in creating a culture and system of defrauding the American public and crashing the American economy with false and fraudulent loans! Now the evidence is becoming overwhelming. Instead of giving banks bail-out money, we should have asked the government to give them one-way tickets to jail. Not all banks are bad, and not all bad loans are fraud. But the huge amount of loans were issued on fraudulent signatures and false reports, and those fraudulent activities were caused and perpetrated by bank officials who have yet to be called to justice for their misdeeds.

Last month Eileen Foster appeared on a national news show to discuss the numerous federal law violations, which occurred at Countrywide Home Loans while she worked there. Her testimony is proof that the financial debacle that went on at Countrywide and later Bank of America (BOA) was directly related to the fraud created by bank managers and workers to push through home loans. The show was "60 Minutes," and the link to that segment is below. "60 Minutes" is the most trustworthy news program ever produced in TV history. The fact that "60 Minutes" vetted Ms. Foster and found her to be credible and able to testify shows just how bad the corruption was at BOA and Countrywide Home Loans.

Factually, Foster worked at Countrywide starting in 2005 as a senior official. After being promoted a number of times she eventually landed in the position of Senior Fraud Risk Manager. This position put Foster as close to the epicenter of the financial collapse of the US Housing Market as anyone in history. That role allowed Foster access to data that literally detailed a mountain of evidence that corporate employees had forged signatures of clients and borrowers, and altered or simply created fake documents to prove up fake assets or income and push through poorly-placed loans for people who couldn't afford them, on property what was never worth the amount of the loan. The amount of evidence was shocking; the degree of total fraud that was being done to manipulate the bank's automated system of evaluating property value is scandalous as well.

After working in this role for a few months, Ms. Foster realized that the fraud was not local to her city but was being perpetrated across the United States. She found the same mind-blowing fraud in Miami, Las Vegas and Chicago. She then found it in San Diego, Los Angeles and Cincinnati. In other words, the fraud was being perpetrated across the entire business platform. It had become de-facto business as usual and was no longer even viewed as fraud - it was just business!

Ms. Foster figured out that the company was allowing the employee relations department (ER) and their lending managers to collude and not report fraud to the bank's normal internal reporting authority. This was being done to keep the fraudulent activity under wraps and allowed the loan officers to meet inflated closing productivity numbers, which became the norm at the bank. To keep the fraud going as long as possible, the company would allow management to retaliate against any employee who dared to question or "Whistleblow" on the banks fraud!

Prior to Countrywide merging with BOA, Ms. Foster filed a whistleblower complaint with the ER Division at Countrywide. Countrywide never told BOA about Ms. Foster's allegations. Instead they did just the opposite. Countrywide instructed their ER Department to investigate and bring a retaliatory action against Ms. Foster instead. Now that is turning justice on its head.

Once BOA took over, Ms. Foster hoped she was going to a more honest and better run company. BOA took foster in as a Senior Mortgage Fraud Investigator. She accepted that position. It was within that position that Ms. Foster finally learned that Countrywide was wrongfully investigating her. They were trying to use that investigation to cover her complaints and create a reason, outside of needing to get rid of a whistleblower, to terminate her employment with BOA. She found out that the company investigators were trying to bully Countrywide's staff into giving negative testimony against Ms. Foster. When BOA took over Countrywide's investigation of Foster, they decided to ignore the overwhelming evidence that the investigation was simple retaliation and instead they terminated her employment. They only did so after finding out that the US government regulators wanted to question her about Countrywide and BOA's suspicious actions and reporting.

It wasn't until Foster was terminated that she realized she needed to file a Sarbanes-Oxley Act (SOX) whistleblower complaint with the Occupational Safety & Health Administration (OSHA). She did so and challenged the termination. After a relatively short investigation, OSHA ruled on her complaint in September 2011. They found that Foster was the victim of whistleblower retaliation. They also found the retaliation was a violation of the Sarbanes Oxley employee protection guarantees. The Department of Labor wrote in the Order that Foster must be reinstated in her position. Further, BOA must pay her all her damages, including lost wages from the date of termination. Bank of America did not like this ruling, so they are challenging the OSHA ruling and requesting a hearing. We shall see what happens in the future.

Watch the "60 minutes" broadcast here.

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HEY WHISTLEBLOWERS! Are you interested in making a huge amount of money? I am betting there are plenty of drug company executives and sales people who are salivating at the possibility of turning their employer into the government for illegal marketing schemes. Over the past few years, the health and drug industry has been busted for multiple violations of federal law and paid huge money in Qui Tam whistleblower cases.

The numbers on some of the cases are staggering. In many health care provider cases, the payouts have been in the hundreds of millions of dollars to settle Qui Tam Whistleblower lawsuits. When this happens, the Whistleblower is entitled to between 15% and 30% of the total funds recovered by the government.

Recently, the mega drug maker GlaxoSmithKline agreed to pay $3 BILLION dollars to the Federal Government to avoid civil and criminal penalties which government prosecutors alleged were created when Glaxo orchestrated an illegal marketing scheme for a group of their most popular drugs. The allegations included ripping off the Medicaid social funds program and promoting off label use for the drugs. This is the largest settlement between a drug company and the government related to illegal marketing practices in US HISTORY! It certainly beats the pants off the 2009 settlement Pfizer paid of $2.3 billion.

This new agreement will close a long running chapter in Glaxo’s history. The US Attorney in Colorado and Massachusetts shared the investigation and prosecution of this mega case. The charges included off-label promotion of Wellbutrin a well known anti-depressant and included the Government’s investigation into the often mentioned defective diabetes drug, Avandia. You may remember Avandia being taken off the market last year by the FDA unless it was given as a drug of last report! This was because it was causing heart attacks instead of helping with diabetes, a somewhat consequential problem for Glaxo. Avandia was promoted as a safe drug when Glaxo knew that Avandia was causing heart attacks and strokes.

I am sure my Qui Tam clients are dreaming about being the Qui Tam Whistleblower’s in a $3 BILLION DOLLAR pay out case. Even at the statutory minimum payout of 15% the Whistleblower in this case should receive a nice check for $450,000,000.00!!! Now that is a good day at the office! The best part of it all is that a company that was breaking the law was brought to justice!

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PALM BEACH GARDENS, FLA. – When a Palm Beach County Wachovia Bank branch manager was reprimanded for not meeting exorbitant numbers, she investigated why her colleagues were. She found evidence of multiple violations of the “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001” also known as the “Patriot Act.”

The LaBovick Law Group filed a civil litigation lawsuit in September alleging Wells Fargo, N.A. terminated an employee after she brought evidence of these "Patriot Act" violations to her superiors’ attention.

FULL PRESS RELEASE: Wells Fargo Bank Sued for Awareness of Violations of Patriot Act

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Fleeing to the Dominican Republic did not prove to be a fool-proof plan of escape for Reynel Betancourt. Betancourt, once an employee of Dearborn Medical Rehabilitation Center in Michigan, was sentenced to 77 months in prison for a scheme that defrauded Medicare of about $9 million.

Betancourt must pay approximately $6 million in restitution for his crimes against Medicare. As a rehabilitation center employee, Betancourt is said to have paid patients to sign fraudulent paperwork stating that they had received injections and other treatments that they did not actually receive. After receiving payment from Medicare, Betancourt laundered the money through phony corporations created for this express purpose.

After being captured in Miami and agreeing to a trial there instead of Michigan, Betancourt was charged with conspiracy to commit health care fraud and conspiracy to commit money laundering. He eventually plead guilty to the charges and was sentenced by U.S. District Court Judge Cecilia Altonaga in the Southern District of Florida on June 7, 2011.

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Update on SENATE BILL - SB 5458

Recently, the Senate Committee on Health & Long Term Care met to discuss SB 5458. Several groups raised arguments for and against SB 5458.

Bill Sponsors included: Senators Keiser, Pflug, Kline, Becker, Conway, Pridemore, Rockefeller and Parlette.

A few PRO and CON Arguments for Senate Bill SB 5458 include the following:

Staff Summary of Public Testimony: PRO: This bill meets the growing need of the state to fight Medicaid fraud. It will address provider fraud. The bill will bring in money to the state and could bring in more if the False Claims Act qualifies for the federal rebate. It gives the AG the tools to fight Medicaid theft.

The longer statute of limitations will save the cases the AG already has. It will enable the AG to hire staff to fight Medicaid fraud and bring back recoveries to the state. DSHS does have an effective integrity program and a new fraud and abuse detection system. We are concerned about the rising costs of healthcare. Reducing waste and fraud will help to control costs.

CON: The bill will deter physician participation in the Medicaid program. Audit activities are already in existence and federal and state agencies already have activities to recover inappropriate payments. Instead of receiving more money, Washington will get less money  due to the qui tam plaintiff.

This will increase costs due to increased litigation. Seventy-five percent of qui tam cases are for non-meritorious claims. We support Medicaid auditor funding and the AG having the appropriate amount of resources to defend against fraud. The bill contains a bounty hunter provision. Regarding innocent parties, damages should go both ways.
 

Click on the following link to read the SB Report for SB 5458

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Yesterday, the Commodity Futures Trading Commission voted to propose regulations allowing the agency to reward whistleblowers with between 10% and 30% of the sanctions collected if the information leads to a successful enforcement case.

The proposal, is based on a provision in the post-crisis Dodd-Frank Act. If approved, whistleblowers could receive an award based upon violations that occurred prior to the enactment of the statute in July.
 
The new proposed rules would protect Americans from commodities and securities fraud by insiders. We must not let the lobbyists circumvent the interests of the public.

The National Whistleblowers Center strongly encourages every American to let these two commissions know that we need them to implement rules that will encourage whistleblowers, be user-friendly, and protect the public interest.

Click on the following links to read more on the issue:

Corporate Lobbying Threatens To Weaken The Dodd-Frank Bill - National Whistleblower Center

CFTC Mulls Whistleblower Rules To Fight Fraud - Market Watch

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Mobil Oil and several affiliate companies have agreed to pay $32.2 million to resolve False Claims Act violation allegations. According to the Department of Justice, Mobil Natural Gas Inc., Mobil Exploration & Producing U.S. Inc. and their affiliates “knowingly underpaid royalties” owed from the production of natural gas on American Indian and Federal lands. The Justice Department alleges that from March 1, 1988 to Nov. 30, 1999, the Mobil companies underpaid multiple Native American tribes and the United States due to the systematic understating of the produced natural gas’ value. The Mobil companies’ settlement stems from a lawsuit brought by whistleblower Harold Wright. 

Tony  West, Assistant Attorney General for the Civil Division of the Department of Justice stated the following:

"The message to those who seek to evade their mineral royalty obligations is this: We will aggressively pursue you. We at the Justice Department are committed to protecting the public trust by ensuring that those who remove valuable minerals, some of which are non-renewable, from American Indian or public lands pay their full, fair, negotiated share for those assets."

Under the qui tam (or whistleblower) provisions of the Federal False Claims Act, private citizens such as Mr. Wright may file lawsuits on behalf of the United States. These provisions also allow the whistleblower to recover a portion of any settlement received by the government. Although Mr. Wright passed away before the Mobil companies settled, his heirs will receive approximately $975,000 for his role.

The U.S. Department of the Interior’s Minerals Management Service requires companies such as Mobil and its affiliates to report the value of natural gas produced on federal lands (including American Indian lands) on a monthly basis. According to the United States, the Mobil Companies “used transactions with affiliated entities to falsely reduce the reported value of gas taken from federal and American Indian leases to claim excessive deductions for the cost of transporting that gas, and to otherwise understate the value they reported each month for their natural gas production.”

Thanks to the qui tam provisions of the False Claims Act, private citizens such as Mr. Wright can bring violations to light. Thanks to Mr. Wright’s actions, the United States will receive $32.2 million, and his heirs will be rewarded $975,000 for his role in supporting justice.

Mobil Oil Companies to Pay U.S. $32.2 Million to Resolve Allegations of Underpayment of Royalties from American Indian and Federal Lands – U.S. Department of Justice

Mobil Companies Settle Unpaid Royalties Case for $32 Million - Law.com

Case Information: U.S. ex rel. Wright v. Chevron USA, Inc. et al., 5:03-CV-264 (E.D. Tex.)

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In Graham County Soil and Water Conservation District v. U.S. ex rel. Wilson (pdf), Justice John Paul Stevens, writing for a 7-2 majority, held that whistleblowers whose allegations are based on publicly disclosed information in state or local reports and investigations are barred from filing so-called qui tam lawsuits.

The Court's decision -- which also drew the first dissenting opinion by Justice Sonia Sotomayor -- said the act's public disclosure bar was not limited to federal sources of information.

Click on the following link to read more on the Justices Limit Qui Tam Cases but New Health Care Law Does Opposite - National Law Journal

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Upon returning from holiday recess, the 111^th Congress of the United States introduced bill H.R. 4444, better known as the Defund the Crooks Act, in early January 2010. First introduced by Congressman Alan Grayson (D-FL), the Defund the Crooks Act prohibits the Federal Government from awarding Federal funds, contracts, or grants to covered organizations. The Act also prohibits the Federal Government from promoting certain organizations or from entering into other agreements with these organizations.

Based in part on the Defund ACORN Act of 2009, Congressman Grayson’s bill effectively broadens the scope of regulation while not basing the regulation on the acts of one organization. The purpose of the bill is essentially to ensure that Federal funds – taxpayer dollars – do not end up in the hands of organizations that fail to meet certain requirements.

According to the bill, “covered organizations” refers to several of the following examples:

• Any organization previously convicted of a Federal or State law violation
• Any organization that failed to comply with Federal or State laws leading to its corporate charter being revoked
• Any organization that has filed, transmitted, or submitted a fraudulent claim to any Federal or State agency
• Any organization that knowingly employs, contracts, or relegates authority to any individual who has been convicted of a Federal or State law violation

The Defund the Crooks Act states that no Federal funds, regardless of form, may be provided to organizations that do not meet the aforementioned requirements set out in the bill. It is important to note that the Act does not apply to organizations that received Federal funds prior to the enactment of the bill. However, if organizations that are now deemed unfit to receive Federal funds, grants, endorsements, etc. have a contract extending past the date of the bill’s enactment, they will be terminated.

Click on the following link to view the proposed bill H.R. 4444  introduced to Congress.

Click on the following to learn more on Congressman Grayson and the Defund the Crooks Act (H.R. 4444).

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The DOJ's Assistant Attorney General Tony West realizes that healthcare fraud is a serious issue that can't be fought alone.  Since 2009, he has led DOJ's Civil Division and is requesting help from Congress to combat healthcare fraud. We applaud Assistant Attorney General Tony West for his efforts in admitting that the DOJ needs help. This is a first step in making progress.

Earlier this week, Senator's Ted Kaufman (D-Del.) and Arlen Specter (D-Pa.) and Senator Patrick Leahy (D-Vt.) introduced the Healthcare Fraud Enforcement Act  to Congress. This bill outlines enforcement issues and calls for increasing rewards for whistleblowers. It is estimated that an additional $20 million is needed in federal funding to increase Medicare fraud investigations and prosecutions.

Fighting healthcare fraud is a bi-partisan effort. Senator's Chuck Grassly (R-Iowa) and John Cornyn (R-Texas) are also concerned about how the DOJ plans on fighting healthcare fraud. According to Sen, Chuck Grassley, there are over 1,040 pending qui tam lawsuits in the DOJ, some over 36 months. A strong plan of action needs to be in place to bring qui tam lawsuits to trial and swift justice for those found guilty.

Whistleblowers should be encouraged with this week's progress in the fight against healthcare fraud. Qui tam lawsuits will increase next year if Congress and the DOJ make a concerted effort to fund and staff the teams charged with handling this task.

We recommend that whistleblowers remain steadfast. Enlist legal help of a private attorney on qui tam claims. This can ease some of the burdens, when bringing a qui tam lawsuit. Also, this can help ensure that the whistleblower's rights are protected.

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Former UBS Banker, Bradley C. Birkenfeld was recently sentenced to 3 years and 4 months in prison for assisting a client at UBS to evade taxes. However, due to Mr. Birkenfield's assistance, the government was successful in reaching the February settlement of UBS agreeing to pay $780 million in fines, penalties, and restitution relating to tax fraud.

In response to the sentencing of Bradley Birkenfeld, Qui tam Attorney Brian F. LaBovick, Esq. stateted the following:

"This is a major issue within the Qui Tam paradigm. I recognize that Mr. Birkenfeld was likely a bad actor and that the government had a good reason to hold him accountable for his part in the fraud. But in the context of how terrible whistleblowers are treated post service of process; this is another good reason why people "in the know" may fail to come forward to report fraud. Without bad actors looking for a "pay day" literally billions of dollars will be lost to the intricate fraudulent schemes created in the wake of big government contracts with dishonest vendors and service suppliers.

I am deeply troubled by this prosecution. Had this occurred in a criminal context, the results would have been different. Seldomly are we able to combat and bring down  organized crime rings without the help of the criminals who are given an immunity deal from the government."

The case, U.S. v. Birkenfeld, 08-cr-60099, U.S. District Court, Southern District of Florida, occured in Fort Lauderdale, Florida. Sadly enough, the support from U.S. Senator Carl Levin of Michigan, representatives of the Securities and Exchange Commission and IRS, did not help to give Mr. Birkenfeld leniency in his sentencing. One can only hope, that this will not deter other whistleblowers from coming forward and working with the government to report fraud against the government. 

Click on the following to learn more on the UBS Tax Fraud sentencing of Whistleblower Birkenfield or the DOJ's release on the former UBS Banker being sentenced to prison.

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The whistleblower case, Graham County Soil & Water Conservation District v. United States ex rel. Wilson, 08-304 was granted certiorari by the Supreme Court.

This case has special implications for the business community, especially  whistleblower lawsuits against drugmakers, and biotechnology companies. Several organizations such as National League of Cities, Pharmaceutical Research and Manufacturers of America, Chamber of Commerce of the United States of America, and the  Washington Legal Foundation, filed amici curiae Briefs

The central players in this case include the Graham County water district from North Carolina and a former secretary at Graham County water district. The main argument in the case is whether the whistleblower can bring a qui tam case against the water district for allegedly fraudulently seeking federal money for storm cleanup, since the allegations are based on information made known in publicly available in state documents. 

According to the Supreme Court Docket Report from Appellate.Net of the Mayer Brown Law Firm:

"The decision in Graham County will be especially significant to businesses that are subject to inspections and audits by state and local government agencies, because the results of those inspections and audits are frequently made available to the public, and thus to potential relators and their lawyers."

The Solicitor General, Elena Kagan and the United States asserts the following in the discussion of this case in the May 2009 Amicus Curiae Brief for Graham County Soil & Water Conservation District v. United States ex rel. Wilson, 08-304.

"The court of appeals correctly construed the second clause of the “public disclosure” bar contained in 31 U.S.C. 3730(e)(4)(A). The court’s decision, however,
deepens a pre-existing circuit conflict regarding whether state and local administrative audits and reports fall within the scope of the FCA’s “public disclosure” provision. This Court should grant the petition for a writ of certiorari to resolve the split among the circuits on an important legal issue affecting the federal courts’ jurisdiction over FCA qui tam actions."

To learn more on this case read Bloomberg News, Scotus Blog, The Supreme Court, The US DOJ

Time will tell, which way the court will decide on this opinion.  Will Big Business prevail or will the Courts render an opinion that is in favor or whistleblowers and bringing FCA fraudulent activity  to light?

All eyes are on the Supreme Court. Stay Tuned....

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Today there is an important hearing on the  Whistleblower Protection Act being held in Washington, D.C. at 2:30pm (EST).  If you can't attend the hearing, please make an effort to call Senators Daniel Akaka (202) 224-6361 and Susan Collins (202) 224-2523, indicating your support of Whistleblower protection for all.

The purpose of the hearing is to examine problems with the current system of protections for federal employee whistleblowers and the pending Whistleblower Protection Enhancement Act of 2009 (S. 372). The hearing will also address differences between S. 372 and the House companion bill (H.R. 1507).

Watch the Whistleblower Protection Act hearing live

As an Action Member with the National Whistleblowers Center, the President, Mr. Stephen Kohn sent the following message to share with our Readers.

Message from the - National Whistleblowers Center:

The Senate is holding a hearing on the Whistleblower Protection Enhancement Act today. The public hearing will be held in the Dirksen Senate Office Building, Room 342 at 2:30 PM.

Now is the time to make your voice heard! If you have not sent an email to Congress send it now! Call Senators Daniel Akaka (202) 224-6361 and Susan Collins (202) 224-2523, the Chairman and Ranking Member of the Senate Committee on Homeland Security and Government Affairs, and tell them that all federal employees, including those who report misconduct in national security and defense, must have whistleblower protection with full court access.

During the campaign, President Obama pledged to support effective legislation that would protect all federal employees with a guaranteed right to federal court access. Please urge the Senate to back up this promise.

 

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New Jersey-based Wyeth, one of the nation's largest drug manufacturing companies recently had two qui tam lawsuits filed against them in federal court in Massachusetts. Pharma giant,  Wyeth - poised to be bought out by large pharmaceutical company Pfizer, Inc. later this year - is being accused of overcharging state Medicaid programs by failing to offer them the best price possible for the stomach acid drug Protonix. Sixteen states - as well as the Justice Department - have joined in on the lawsuits, which could result in millions of dollars in repayments to Medicaid, as well as settlements for the two whistleblowers.

The lawsuits allege that between the years 2000 and 2006, Wyeth offered very high discounts to hospitals around the country for Protonix, which is available in oral and injected forms. While these hospitals were able to take advantage of the deal for the brand name drug, the same deal was not offered to state Medicaid programs. Federal law mandates that the manufacturers of brand name prescription drugs must offer the same deal - or the "best price" - of the drugs they make to Medicaid programs and private hospitals alike.

According to to the DOJ, Tony West, Assistant Attorney General for the Justice Department's Civil Division stated,

“Our complaint charges that Wyeth created the Protonix bundle so they could increase their market share at the expense of the Medicaid program -- a program to provide the least advantaged Americans with necessary medical care and services. “By offering massive discounts to hospitals, but then hiding that information from the Medicaid program, we believe Wyeth caused Medicaid programs throughout the country to pay much more for these drugs than they should have.”

By failing to offer Medicaid programs the best price for Protonix, it is alleged that Wyeth avoided paying hundreds of millions of dollars in rebates. The presence of two whistleblowers in the two lawsuits suggests that people with insider knowledge into the goings-on at Wyeth have evidence that will be presented in court during these suits. As with other past whistleblower cases, these individuals have likely already disclosed a great deal of damaging information to the government regarding Wyeth's alleged practices.

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Defense Contractor Northrop Grumman Corp., has agreed to settle False Claims Act allegations for $325 million, according to the Department of Justice. Allegedly, Northrop provided and billed the National Reconnaissance Office (NRO) for defective microelectronic parts, known as Heterojunction Bipolar Transistors (HBTs).
  
Investigation into the HBT Action found that that Northrop and TRW failed to properly test and qualify certain HBTs manufactured by TRW from 1992 to 2002.  As a result, Northrop and TRW integrated into NRO satellite equipment certain defective HBTs.  The investigation further concluded that Northrop and TRW made false misrepresentations and concealed key material facts regarding the reliability of the HBTs.  

U.S. Attorney for the Central District of California Thomas O’Brien and Acting Assistant Attorney General for the Civil Division Michael F. Hertz  announced the settlement.

According to Acting Assistant Attorney General for the Justice Department’s Civil Division Michael F. Hertz,  “The settlement of the HBT case demonstrates that the Department of Justice will investigate even the most complex and challenging allegations.  The settlement demonstrates that defense contractors will be held accountable and that the government will aggressively pursue all allegations of misconduct in the procurement process.”

Kudo's to relator and whistleblower Robert Ferro, Ph.D., an employee of The Aerospace Corporation for coming forward with this case. Although, the case was filed filed in US. District Court in the Central District of California in 2002, the government intervened in the lawsuit against Northrop in November 2008. Dr. Ferro will receive $48.75 million as his relator's share of the recovery in the HBT action under the qui tam provisions of the False Claims Act.

In a qui tam suit,  the whistleblower also known as a "relator" may be entitled to 15-30% of the government's total recovery, which includes damages for the false bills, tripled, plus civil penalties of from $5,000 to $10,000 per false claim. However, it is important to mention, that the relator/whistleblower must have complied with the statutory requirements to be eligible for the whistleblower reward.

Northrop Grumman stock closed today at $47.94.  According to published 4Q reports, Northrop Grumman Sales in the 4Q increased by 4 Percent to a Record $9.2 Billion. Overall in 2008, Sales increased 6 Percent to a Record $33.9 Billion.  It is easy to see why they finally agreed to  end the fight, admit no wrongs and settle the qui tam suit for $325 million.  Hopefully, this large fine will deter other Defense Contractors from misrepresentations of products sold to the Government in the future.

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I am thankful for the valiant fight of Congressman, Bruce Braley, (D) Iowa First District, and other members of congress regarding whistleblower protections for workers. 

We had the distinct pleasure of speaking with the Congressman regarding this important piece of legislation, that is being proposed today for a stand alone bill.  One of the major reasons this is so important now according to Congressman Braley is that  "There is  a massive amount of money being spent in the current economic recovery bill. We must protect against wasteful and fraudulent use of taxpayers hard earned dollars". 

We could not agree more, that protecting the whistleblowers with whistleblower protections, is a necessary step to ensure that the government's dollars are being used appropriately, regardless of where it came from, stimulus bill or just regular government spending.

Stay tuned for more information on this proposed whistleblower legislation. We look forward to hearing more from Congressman Braley on the stand alone whistleblower bill.

Check out CSPAN or CNN for the press conference today at 12:15pm  in the Radio TV Gallery of the House in room H321.

We are rooting for your success Congressman Braley. We ask our loyal readers to contact their local congressional person to show support.

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Yesterday, the Chairman of Orthofix International, issued a strong statement about  a nominee for Orthofix Board, Steven J. Lee. In an open letter, Chairman, James F. Gero, outlined a long history of Mr. Lee's former company's unsavory history with qui tam litigation. Two of which, were Florida Based, Liberty Medical Supply and Liberty Home Pharmacy. Back in 2001, two qui tam, or whistleblower, lawsuits were filed in federal court in Miami and Boston against PolyMedica Corporation and its subsidiaries. These lawsuits alleged, that the subsidiaries violated the False Claims Act by submitting claims to Medicare without proper documentation of medical necessity, resulting in overbilling to federal health care programs.

In 2004, the company, paid $35 million to the United States government to resolve the fraud allegations, as well as to settle administrative sanctions related to the alleged misconduct. This settlement concluded an investigation lasting approximately five years that included on-site searches of PolyMedica’s subsidiary operations by FBI agents in response to federal search warrants, the removal of company documents, and subsequent shareholder lawsuits.

Two thumbs up for the Chairman publicly rejecting a man with a background that could possibly taint the image of his corporation, that he took an oath to uphold and to make better. In the wake of corporate greed and mismanagement, it is good to see that someone in corporate America still believes in integrity and ethics. There is an old saying that goes something like: "association brings assimilation".

Fraud and mismanagement of government funds should not be stood for in this day and age. Whistleblowers are speaking out and bringing the misdeeds of "greedy" corporations that try to squeeze more from the taxpayer and from the government. Good for Mr. Gero for stating that he and his board wanted no part of a man that was at the helm of a company that defrauded the government and had to pay $35 million in fines.

Click here to read more from Orthofix Chairman.

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Midsized construction firm, Mercer-Fraser agreed to pay $1.3 million to settle fraud allegations involving work under the U.S. Small Business Administration's HUBZone Empowerment Contracting program. According to the claim, Mercer- Fraser used false information to gain business. The Company misrepresented the size of their earnings and their partnerships in their application to the Small Business Administration.  

Mercer-Fraser maintains that they did nothing wrong and that the error was that of the Small Business Administration.

In late 2007, the government decided to get involved with this qui tam claim after whistleblower, Mark Mann, employee of a competitor and supplier of Mercer-Fraser and affiliate Contri Construction Company brought the matter to the Department of Justice's attention through his attorney.

Congratulations to Mr. Mann for following through and stepping forward to report this wrongdoing against the government. Although, this is a small award, it is another step in the right direction for the fight against government fraud.

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Good news is possibly in store for Whistleblowers if the Government Accountability Project office gets its way.  The organization came  with a brilliant idea of tying Whistleblower Protections to the Stimulus Bill that is in the forefront of everyone's mind in Washington, to help promote whistleblower rights.  They drafted a letter to President Obama and other Key figures outlining how this can be made possible and the benefits to all sides. Click here to read the letter sent by the Coalition.

Clever strategy. One can only hope that it works and that Washington will look at the bigger picture and see this as a win-win.

The coalition is urging support for an amendment to the stimulus legislation sponsored by Rep. Todd Platts (R-PA) and Chris Van Hollen (D-MD). Click Here to read Russell Platt's Letter.

Stay tuned for more information on this important issue of whistleblower Rights and Protections. Click here if you want to read more on this from the Government Accountability Project Office.

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Good news is possibly in store for Whistleblowers if the Government Accountability Project office gets its way.  The organization came  with a brilliant idea of tying Whistleblower Protections to the Stimulus Bill that is in the forefront of everyone's mind in Washington, to help promote whistleblower rights.  They drafted a letter to President Obama and other Key figures outlining how this can be made possible and the benefits to all sides. Click here to read the letter sent by the Coalition.

Clever strategy. One can only hope that it works and that Washington will look at the bigger picture and see this as a win-win.

The coalition is urging support for an amendment to the stimulus legislation sponsored by Rep. Todd Platts (R-PA) and Chris Van Hollen (D-MD). Click Here to read Russell Platt's Letter.

Stay tuned for more information on this important issue of whistleblower Rights and Protections. Click here if you want to read more on this from the Government Accountability Project Office.

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Whistleblowers have a lot to celebrate in the wake of the recent $1.4 billion settlement from drug maker,  Eli Lilly. The drug giant, Eli Lilly, plead guilty to promoting its drug Zyprexa for uses not approved by the Food and Drug Administration (FDA). Included is a criminal fine of $515 million, the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a United States criminal prosecution of any kind. Eli Lilly will also pay up to $800 million in a civil settlement with the federal government and the states. Whistleblowers will share in about 20% of the government's share in the $800,000.

This settlement should help more whistleblowers come forward. AM Law Daily gives an insightful summary on how whistleblower cases have increased in the past year. I have to admit, at our firm, over the past year and even more recently, whistleblowers have been contacting us regarding qui tam claims. I think that this can be attributed to the large whistleblower rewards and media attention over the past year.  One word of caution, if you are a whistleblower with critical information, talk to an Attorney about your claim and rights before making statements public. This way you have a better way of protecting your claim.

Click here to read more on the $1.4 billion qui tam settlement from Eli Lilly from the Department of Justice.

Let's see how 2009 will treat qui tam and whistleblower claims under the new administration.

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Whistleblower Anthony Kite has $1.9 million reasons to be happy this Thanksgiving. The Pennsylvania based, St. Vincent Health System settled a qui tam case pay $1.9 million to the federal government to settle a whistleblower lawsuit that alleged the hospital submitted reimbursement claims to Medicare that greatly exceeded actual costs. 

This is the latest in a string of whistleblower cases settled against hospitals.  What makes this cases really interesting is that the whistleblower, Anthony Kite, has been instrumental in bringing several qui tam cases to light.  According to Mr. Kite, St. Vincent Health System increased Medicare reimbursement claims from 2001 to 2003 with the hopes of receiving what is commonly referred to as "outlier" or supplemental payments.  Surprisingly, other hospitals were doing the same thing according to allegations brought by the whistleblower.

What makes this suit fascinating is that Medicare uses "outlier" payments to hospitals for instances where costs for treating a patient exceed a predetermined reimbursement amount for a particular type of treatment.  One can only imagine how many times hospitals have taken advantage of this loophole to try and take advantage of Medicare billing.

A few other qui tam suits against Hospitals and Health Care Systems include:
Cooper University Hospital in Camden, N. J., $3.85 million settlement.
Warren Hospital in Phillipsburg, N.J., $7.5 million settlement
Bayonne Medical Center in Bayonne, N.J., $2.5 million settlement
Cathedral Healthcare System in Newark, N. J. $5.3 million settlement
Raritan Bay Medical Center in Perth Amboy, N.J. $7.5 million settlement
Grand Total: $26,650,000.00 - In Qui tam/ whistleblower suits against Health Systems

Now, I must caution you to not think that every whistleblower claim produces results like these, because they do not. It takes PROOF and hard FACTS to prove the claim and it takes time.  As most whistleblowers can attest to this fact.

Click here to read more on this whistleblower suit against health systems.

Click here to read more on qui tam statutes and how to file a whistleblower claim.

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Dear Readers,

Your help is requested today in an effort to take action in protecting whistleblowers. I received an email today from the organization Project for Government Oversight, and want to share this important  information with our loyal readers of the Whistleblower Law Blog.  It is a plea for concerned citizens to send a message TODAY to Congress and show support for passing legislation that gives protections to government employees who blow the whistle on waste, fraud, and abuse. Let your Congressperson know that you believe the House's "Whistleblower Protection Enhancement Act of 2007"  (H.R. 985) offers stronger protections than the Senate's bill (S. 274).

Please click on the link below and send a message to Congress about this very important issue.  We also encourage you send to a "friend".  We can make this  a "viral" message of importance, to get more people involved in this critical issue.

http://ga6.org/campaign/wpa_2008

It takes only 3 - 4 minutes to complete the form and send to your Congress person and Senators.  

We are asking you to take action today.  June 12, 2008.

Thanks for your support of legislation that promotes whistleblowers coming forward without fear of retaliation.  Stopping Government fraud, abuse and waste should be the fundamental goal.

Brian
 

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In a recent Supreme Court decision today, in the qui tam suit, Allison Engine Co. v. US ex. Rel Saunders,  Supreme Court Justice Alito writes in his opinion that  "it is not enough under §3729(a)(3) for a plaintiff to show that the alleged conspirators agreed upon a fraud scheme that had the effect of causing a private entity to make payments using money obtained from the Government. Instead, it must be shown that they intended “to defraud the Government.” Where their alleged conduct involved the making of a false statement, it need not be shown that they intended the statement to be presented directly to the Government, but it must be established that they agreed that the statement would have a material effect on the Government’s decision to pay the false or fraudulent claim. Pp 8 -10." 471 F. 3d 610, was vacated and remanded. This was a unanimous decision for the Court.

According to Stephen M. Kohn, the President of the National Whistleblower Center,  the Court laid the responsibility for fixing the law directly on Congress: 'Had congress intended' the False Claims Act to 'apply to any one who conspired to defraud' the government 'it would have so provided."

Does this give conspirators planning to defraud the government, a  " free pass"?  Let's hope this is not the case. Maybe this uncertainty will light a fire under Congress to pass the False Claims Correction Act. 

Note to Whistleblowers: Do not let this ruling discourage you from bringing qui tam cases. This decision is only a minor set back.  The rules of the game may have changed a little, however,  the strategy to bring those guilty of defrauding the government to justice, has become more interesting.

Click here to read entire Supreme Court Opinion for Allison Engine Co. v. US ex. Rel Saunders

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This week, The Whistleblower Law Blog is delighted to host Blawg Review #159, the blog carnival for everyone interested in law.

During the week of May 11-18, 2008,  independent whistleblower coalitions, such as the  International Association of Whistleblowers (IAW), the Make it Safe Campaign, and many other independent whistleblower coalitions, will hold a series of simultaneous but separate events in Washington, D.C.. These events are designed to lobby Congress and alert the public to the need to support whistleblower protection. Some of the speakers for the Whistleblower Week 2008 in Washington D.D., include: Adam Kokesh, Iraq Veterans Against the War, Rev. Lennox Yearwood Jr, a former United States Air Force chaplain, and Congresswoman Sheila Jackson.

A few of the discussions shared on blogs covering Whistleblower  topics this week included the following posts: 

...In a post on the Whistleblower Protection Blog, Marshall Chriswell talks about a hearing by the Democratic Policy Committee for Monday, May 12th. The purpose of the hearing is to "examine the impact of American reconstruction and anti-corruption failures on the U.S. mission in Iraq."  Hopefully this will become an important bi-partisan issue to the Republican policy committee too.
...In a post on the Balkanization Blog, Marty Lederman discusses : The Military Commission Decision Disqualifying the Legal Adviser, Brig. Gen. Thomas Hartmann. Interesting how the media is covering this story in the various outlets.
...In a post on the Virginia Qui Tam Law Blog, Zachary Kitts discusses his rebuttal to an editorial in the D.C. Examiner on the False Claims Correction Act of 2007. Blogging is a great way to voice your opinions to information found in the traditional papers and online. Let's hope that the Republicans and Democrats find a way to support this important legislation that Senator Grassley and several others have worked so diligently to make it a bi-partisan effort.
...In the formerly named Question Authority Blog, Peter Rost, (One of the world's most well-known and whistleblowers)  tries on the new site name Pharma Law Blog for size.  Personally, I think it sounds great. Good Luck with the new name.

To add some fun and to bring back memories, I thought that I would use a few Nursery Rhymes to help me out with the Blawg Carnival. I hope that it brings a "Smile on Your Face" while reading the stimulating posts selected for the Blawg Carnival this week.

Our first Nursery Rhyme is: London Bridges: London Bridge Is falling down, Falling down, Falling down. London Bridge Is falling down, My fair lady.

... In My Shingle, Carolyn Elephant has a great post with burning bridges and finding new ones. She bravely admits being wrong about a previous opinion on how an associate handled a termination from a law firm. I see this as just changing one's opinion, once more facts were presented.  How refreshing to reassess a situation in light of new facts.
...In Law 21, Jordan Furlong discusses an important subject: Burning the Law Firm Newsletters. Okay, I must admit burning them all together is a bit harsh. You can also survey clients and ask what topics are of interest to them. Implementing reader feedback is a way to make it better.

This leads to our next Nursery Rhyme: Humpty Dumpty
Humpty Dumpty sat on a wall. Humpty Dumpty had a great fall. All the king's horses and all the king's men, Couldn't put Humpty together again.

...In the Legal Scoop, Scott Felsenthal, raises valid points in his post about the wear and tear of the practice of law. In the legal profession as well as in life, we should be aware of stressful things and take the appropriate actions to prevent Burnout.
...In the Sports Law Blog, Geoffrey Rapp, discusses the tragedy that happened to the filly, Eight Belles, the recent Kentucky derby, runner-up that had to be put down, due to two broken ankles. Sadly, I was rooting for Eight Bells to win. I wonder if she had not  been pushed so hard, would she be with us today?

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S. 2041, has received support from leadership in both parties and has moved out of the Senate Committe. Leading the charge is:  Sen. Charles Grassley (R-IA), Senator Richard Durbin D-IL), Senator Patrick Leahy (D-VT), and Senator Arlen Specter (R-PA).

Proponents of S. 2041, note that the new bill clarifies the existing scope of False Claims Act liability, while closing the gap of a limited amout of loopholes for companies to use for stealing money from taxpayers. 

Specifically, S.2041 would:

• Remove the confusion over the statute of limitations period by adopting a straightforward 10-year period; 
• Provide strengthened employment protection for whistleblowers.
• Clarify that False Claims Act liability protects all federal funds;
• Explicitly clarifies that the False Claims Act applies to those who discover an overpayment and decide to pocket the funds
• Solely vest the Government with the power to dismiss whistleblower-filed False Claims Act lawsuits that are based on public allegations.

According to Jeb White, President of Taxpayers against Fraud, "This Bill has broad bi-partisan support. It's hard to be opposed to building a better rat trap to catch corporate cheats, chiselers, and con artists."

As mentioned here previously on the Whistleblower Law Blog,
highlights of the bill include:

• Makes corrections to 31 U.S.C § 3729 removing the requirement that false claims be presented to a government employee.
• Amends the FCA to clarify the dismissal of parasitic claims filed based upon publicly disclosed information.
• Clarifies that false or fraudulent claims against non-U.S. Government funds under the trust and control of the U.S. Government are subject to recovery under the FCA.
• Clarifies a split between Circuit Courts of Appeal as to when a government employee may act as a qui tam relator under the FCA. 
• Makes technical and clarifying amendments to the statute of limitations in FCA cases.

Click here to read the False Claims Act Corrections Legislation 2007.

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Medicare fraud can happen anywhere and can be detected by the most least suspecting individual in a company.  Recently, Fred Steinberg, M.D, a radiologist and owner of the chain, of  University MRI and Diagnostic Imaging Centers, located in Florida settled a qui tam suit for $7 million.  The  Florida firm denied all charges and agreed to settle the qui tam suit according to a quote in the Sun Sentinel  "to end the uncertainty of protracted litigation."

The company was accused of overcharging Medicare for Medical scans and billing the federal government for some tests that were not medically necessary. There were also allegations that that the Florida company paid doctors under the table for sending them imaging patients for tests that could cost as much as $2,500 apiece.

Why is it that when an employee reports questionable government billing practices to management, in this case Medicare bills, the company  takes the defensive and fires the employee.

In the case of the Florida Diagnostic Imaging Centers, David Clayman, M.D, a former radiologist for the imaging centers, was fired after questioning the Medicare billing practices. According to a recent DOJ release, Dr. Clayman will receive $1.75 million as his share of the $7 Million recovery.

According to the American College of Radiology, a doctors' association, in a Sun Sentinel article, the cost for Medicare and insurers is about $16 billion a year for unnecessary imaging tests ordered by doctors who made money from them. These tests not only cost the government and taxpayers, but also expose patients to radiation and and raise medical costs.

One of our favorite crusaders in the Medicare fraud fight, R. Alexander Acosta, U.S. Attorney for the Southern District of Florida, stated that  “We will aggressively prosecute any physicians, including board-certified specialists, who abuse and steal from the Medicare system to line their own pockets.”  Attorney Brian F. LaBovick mentions in an article on health care fraud for a  Thomson West Litigation Reporter, that "We must continue to prosecute fraud on all levels. New amendments are needed to continue to foster the cottage industry of civil attorneys assisting U.S. attorneys' offices around the country with their qui tam investigations. Each state must enact its own qui tam statutes (there are now 22 states with qui tam laws). This will give states the ability to potentially capture additional funds for Medicare fraud prosecution at a local level, pursuant to the Deficit reduction Act of 2005."

The Florida qui tam case discussed in this post is: U.S. ex rel. David Clayman v. University MRI and Fred Steinberg, M.D. et al. Civil Action No. 02-81143 (S.D. Fla.). 

 

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The qui tam complaint against Pfizer, USA rel. Polansky v. Pfizer is pressing forward according to court documents filed by the Plaintiff's legal counsel, Hagens Berman Sobol Shapiro. To view the complaint, click here. (Warning, the document is pretty lengthy, 97 pages, but worth every moment spent reading.) This comes after the whistleblower complaint being initially filed with the federal government about 3 1/2 years ago and the federal government deciding recently not to intervene.

It can be difficult for a whistleblower to press forward with a qui tam claim, they often lose their jobs, face retaliation, lose family and friends and often are forced to give up something they truly love. ). The Pharmafraud Blogger discusses challenges whistleblowers can face while trying to do what is right, in the recent post  Big Pharma Retaliation, Just More of the Same, "If you think Dr. Polansky, or I, or any other "whistleblower" was motivated by money to file a qui tam, then you are sorely mistaken. Every one of us simply tried to do what was right".  However, I must add that whistleblowers, if successful, can receive up to 30 percent of the proceeds of what the government recovers. As we mentioned in a prior Whistleblower Law Blog post, In 2007, whistleblowers were awarded $177 million for their efforts in bringing corporations to justice, most of  which came from Health Care fraud.

Another well known whistleblower and one of the most prominent in the health care segment is Dr. Peter Rost.  He knows first hand how difficult it can be to bring a claim against a large pharma giant, such as Pfizer. Dr. Rost, former VP of Marketing for Pfizer, is an outspoken pharma whistleblower that went on to become an activist on the subject. He has authored several books including: KILLER DRUG and THE WHISTLEBLOWER, Confessions of a Healthcare Hitman and maintains a blog known as Question Authority.

Is Pfizer off the hook? Can they breathe a sigh of relief? Are they in the clear with Lipitor, since the government chose not intervene in the qui tam claim? David Armstrong provides a nice answer to this in the Wall Street Journal article, "Pfizer Is Sued Over Lipitor Marketing"., when he writes "The government hasn't intervened in other cases which led to huge fines against drug companies. One example is another case involving Pfizer, this one for the off-label marketing of Neurontin." Only time will how the claim against Pfizer for questionable marketing for the billion dollar drug will turn out. May the truth prevail in this uphill battle.

According to Pfizer company issued statements, they are the world's largest research-based biomedical and pharmaceutical company. In 2006, they earned $48.4 billion in revenues and invested $7.6 billion in research and development. In a Pfizer fact sheet, the company writes, "Every day, approximately 87,000 colleagues in more than 150 countries work to discover, develop, manufacture and deliver quality, safe and effective prescription medicines to patients." One can only hope they are not doing this at the sacrifice of lives in the process.

Pfizer stock most recently closed at $22.90 on the NYSE.

Click here to read more on this this from the WallStreet Journal online.

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A Whistleblower took his case public and to the Web after initially being ignored. A recent article by General Counsel entitled, Employee's YouTube Video Sounds Ethics Alarm.  The article talks about how a former Lockheed Martin Engineer felt something was wrong with his company's ship shipbuilding project for the U.S. Coast Guard. In his mind he felt that the materials Lockheed were selling to the government were not up to code and that sailors and national security were at risk . This whistleblower now has filed a quitam case against  his former employer. Initially, trying to do the right thing, the whistleblower, took his complaint to his superiors, but his warnings were not taken seriously maybe because this project known as Deepwater was a cost around $100 million. He was told that his allegations were baseless.

Nearly three years later, in February 2006, this whistleblower, contacted the U.S. Department of Homeland Security's inspector general. The IG sent auditors to speak with him. Unfortunately, after several months, he felt that the investigation was going nowhere, and felt that he should matters in his own hands and decided to do something revolutionary. He took his case to You Tube, for the world to hear and see if they agreed, that the Deepwater project should be looked into for safety reasons.

His revolutionary idea worked and his idea was picked up by several media outlets. A detailed report was eventually released by the Inspector General's Office.  The 10 minute You Video made an impact. The Coast Guard reorganized the program and took oversight of project management of the deepwater program in house, instead of having the contractors perform this oversight.

It is not known how much this whistleblower's quitam or false claims act case could be worth, if anything at all. Time will tell... One thing that is important to note, is that whistleblowers are taking things to the next level when reporting quitam False Claims Act cases. 

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Yesterday, the U.S. Senate, with a unanimous vote, passed the Federal Employee Protection of Disclosures Act (S.274). This new law enhances the protection for federal employee whistleblowers.

Passage of S.274 now sets the stage for a conference between the House and Senate to agree final legislative language. On March 14, 2007 the House enacted the Whistleblower Protection Enhancement Act (H.R. 985), which expanded the scope of whistleblower protections to national security related agencies, permitted employees to obtain jury trials in federal court, provided enhanced protections for federal contractors and protected employees who exposed misconduct to their managers.

According to the Government Accountability Project (GAP), the Whistleblower Protection Act reform has been struggling for eight years to reach the end of a convoluted approval process. Proud supporters include the bi-partisan efforts of Senators Daniel Akaka (D-HI), Chairman Joseph Lieberman (I-CT) Susan Collins (R-ME), Charles Grassley (R-IA), Carl Levin (D-MI) and Richard Durbin (D-IL). In 2004 and 2005 the bill passed committee, but was blocked by procedural holds. Last year Senators Levin and John Warner (R-VA) obtained its Senate approval as part of the Defense Authorization funding bill, but it was killed in the conference committee on the defense bill.
Unfortunately, the GAP also mentions that S. 274 does not contain five critical reforms passed in March by the U.S. House of Representatives in H.R. 985, co-sponsored by Chairman Henry Waxman (D-CA) and Rep. Todd Platts (R-PA). The House-passed reforms include protection for national security whistleblowers at the FBI and intelligence agencies, protection for government contractors, protection for federal baggage screeners, jury trials for a fair day in court, and reinforced protections for federally-funded scientists. The House passed H.R. 985 by a 331-94 vote, a veto-proof majority, despite a threat to veto the legislation issued by the Bush administration the day prior to the vote.

All things considered we have made progress with this new legislation.  Let's see if Congress can continue to work together and do what is right in regards to this whistleblower legislation that aims at protecting our brave citizens that come forward and report fraud against their employers.

We're counting on our elected officials to make this a reality so that whistleblower rights can be enforced and protected.

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I just love hindsight. In hindsight, everything is so clear. Things that look tenuous on the front end are no risk easy “layups” in the rear view mirror. You may wonder what I am talking about.

I am talking about one of my favorite subjects, the right to Attorney’s fees, which is how I support my family and provide food, shelter and education for my children. Recently, I came across an article on Boston.com by Sacha Pfeiffer regarding "blowing the whistle on lawyer’s fees".

Contingency fees are the single greatest invention to permit the common man access to fight big corporations and government intrusion. It is simply bad public policy for the court to intervene in a contract between an employee and the employer.

In a typical Qui Tam case the relator goes to the attorney's office with a claim about how their employer is defrauding the Federal government (or State Government). Sometimes it involves an obscure contract that affects about .001% of the general population. The Relator wants the attorney to listen to their story and investigate their claims. In most Qui Tam cases, the attorney needs to do extensive research in the case, to determine if the fraud claim can be legally supported. If the attorney determines there is sufficient evidence to support this potential claim, the attorney must finance the claim with personal money and time. Once the litigation process has started, time and hours on the case usually add up. Any case costs incurred are paid by the attorney personally.

Isn't it easier to just sell your soul to the big corporate devil? Private Industry pays white shoe (corporate) lawyers very well. They give them good benefits; sometimes 12 weeks paid vacation, stock options and generous retirement plans. Usually they work 9 to 5. All with the guarantee that on Friday the paycheck is in the bank. I have a good buddy that has been with Lucent Technology for years. He lives a good life. Lucent treats him well.

So, why do Plaintiff Attorneys, in the areas of Qui Tam, Employment Attorneys, and Personal Injury,  Attorneys practice law? The reason is two fold. First, most love the idea of prosecuting cases. They get significant internal gratification knowing they are making the bad guys pay up. Second, and equally important, it is lucrative. America awards risk and hard work. When an attorney takes personal resources, time and money, and invests in a case, the attorney deserves to be paid exactly what the employer (client) agreed to pay him. This is especially true if the employer (client) is making a large amount of money as well as a result of the attorney’s efforts.

In the Boston.com article, the Relator's attorney took the risks and did the work and was not paid for any of it. In the end the Relator got what they wanted and didn't complain. However, someone did: the corporate lawyers are complaining about the Qui Tam attorneys fees. Why?

Big corporate industry is constantly working to prejudice the average American against Plaintiff's attorneys. They would love to take away the contingency fee all together. Big corporate industry can afford to hire a legion of $500 per hour lawyers to paper and destroy the common man in court. Ask yourself, honestly, if you had to bring a lawsuit and you had to hire an attorney, how much could you really fight? For 99% of the American public the answer is almost ZERO. If I personally worked on an hourly basis I would need to charge a $25,000 retainer just to get started. I would then bill my clients at the end of every month. Each month's bill would be about $10,000 just to keep the litigation going.  The basic trial runs a minimum of $100,000.00 plus costs. Now, who has money for that? Any major corporation can pay that litigation bill for several cases all day long. This is pocket change for them. Not even a concern. But for the average American, it would wipe them out. Tap their life savings. Extinguish the equity in their homes and deplete any investments they have saved over the years. Then, what happens if they lose the case? They would lose everything. So, you know what? They choose not to do anything right at the beginning and the big corporate body wins every time. So, yes, they are intentionally trying to destroy the contingency fee in America and with it they will destroy your access to the court system and your right to be protected from corporate abuse.

Now, since I always go back to the political, it is against my Republican nature to have government interfere with a contract between two entities which does not breach or harm the moral fiber of our social compact. A few years ago in Florida the medical industry tried to limit attorney fees in medical malpractice cases to 10%. I was in line waiting to vote against that amendment and I overheard a two people talking behind me. They were talking about how good it was for the people in the State to have this amendment because it would save them so much money. One guy mentioned he was a local real estate salesperson, so I politely mentioned that if this amendment passed and attorneys had their fees limited then their was a political movement that was going to try and limit real estate sales commissions to 2% instead of the typical 6 or 7% they now put in most contracts. The look of astonishment on his face was fantastic. He literally did not know what to say except how unfair it would be. He mentioned that real estate salespeople put out money to advertise the house and how if the commission are only 2% how can they afford to do any advertising? I agreed completely and mentioned that medical malpractice attorneys routinely put up over $100,000.00 to try medical malpractice cases and that doctors win 80% of those trials, so how can the attorney afford to help people if when they win they can't recoup their lost money?

All the big cases, the million dollar monsters, look easy from the rear view mirror. But when you are sitting in your office and you are looking at spending 3 years and $100,000 of your money on a case that doesn't look like a slam dunk, it is a bit harder to read the tea leaves. 

Look at the whole picture. Contingency fees help the average person. Don't let a corporate propaganda lawsuit misinform you about what is best for you and for most Americans.

Brian

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One whistleblower and his lawyers are fighting for a $2.8 million share of a $10.5 million quitam settlement by Cell Therapeutics. According to the government, James Marchese, the whistleblower, was the "initiator or planner of the fraudulent scheme, according to Barry Meir's article in the New York Times. 

I would like to pose a question:  If you help create a fraudulent scheme for a company that allows them to make money under false pretenses, should you be allowed to receive an award for turning the company in?

Personally,  I think the answer should be a simple one. However, in this case with James  Marchese, there are a lot of circumstances that make the answer questionable. According to James Marchese, the government, would never have been able to build a case, without him. He provided detailed documentation that only an insider could have given the government. However, we can't ignore the little detail, of when Mr. Marchese reported the fraud.  According to reports in the New York Times, Cell Therapeutics fired Mr. Marchese in 2002 for allegedly arranging kickbacks to drug wholesalers, which happens to be the same year, he informed the FDA about the promotion of a drug for unapproved therapies. It is important to note that Mr. Marchese denies any wrongdoing. Could this be a smear tactic by the company to discredit the whistleblower? We will never know.

I can see this case being the foundation story for a best selling legal novel, by one of my favorite authors, John Grisham.  Here is my take on what a legal best selling story bases on this case would sound like. Whistleblower comes forward, reports fraud of large company. Whistleblower, conveniently leaves out details of any wrong doing, goes on to destroy any incriminating documents with the help of a lover. Shares all of the dirty little secrets with lover as to their part in the scheme that was not divulged to the authorities. In an effort to try their hand at writing fiction, pens a manuscript loosely based on the events of their case. Shares manuscript with lover to edit and give feedback.  As time passes, whistleblower and lover have a dispute, which leads to a nasty breakup. Lover marches into the authorities with detailed accounts of this fictional script and pours out all of the whistleblowers dirty little secrets.  Authorities have a change of heart about the whistleblower and decides that they deserve no parts of the reward, because they hid important information, their involvement of masterminding a larger scheme, they conveniently left out when they turned their employer in for fraud.  After authorities settle case against corporate giant, they tell the whistleblower that they will not receive the multi-million dollar reward. They fight it out in court.   You have to buy the book to see how the ending turns out.

Now we turn back to the events of the real case at hand, James Marchese and the Government fighting over how much money he should receive, if any at all for his contribution in the quitam case against Cell Therapeutics. The case go to court later this month. 

All eyes will be on Seattle to see how the case is resolved.  Maybe this will give a glimpse on the ending of the above mentioned legal novel.  Stay tuned... 

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The Justice Department reported this week that in Fiscal Year 2007, it recovered $2 billion in settlements in fraud cases. We are happy to report that most of the recoveries resulted from whistleblower lawsuits. The individuals who filed suit were awarded $177 million. Health care fraud accounted for the bulk of the settlements, with $1.54 billion stemming from cases involving programs such as Medicare and Medicaid.

Under the False Claims Act, whistleblowers can sue companies or individuals that they believe have filed fraudulent claims with the federal government. If successful, they can receive up to 30 percent of the proceeds of what the government recovers.

Let's hope that the legislation for Whistleblower Protections continue to be strengthened. This will encourage more Whistleblowers to come forward and report fraud against the government.

Click here to read more from the Associated Press Article.

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Yesterday, the Senate Committee on Commerce, Science & Transportation voted to approve S. 2045, The Consumer Product Safety Commission (CPSC) Reform Act of 2007. This bill will revamp the  federal standards on consumer products and will incorporate whistleblower language that protects employees who speak out on consumer safety violations against their employers. Once passed, this new law would prohibit manufacturers, distributors, and retailers from retaliating against employees who report violations of consumer safety laws.

Stephen M. Kohn, President of the National Whistleblower Center, states "Whistleblower protections for employees who report violations of consumer product safety standards are absolutely critical. If courageous employees can't report violations without fear of retribution, especially in overseas factories, then the American people may not know about dangerous or defective products until it is too late".

Leaders and supporters of the Government Accountability Project (GAP) are among the group of supporters of  S. 2045, the Consumer Product Safety Commission Reform Act of 2007. The GAP Legislative Director, Adam Miles, adds that "With the recent import scares and the holiday season approaching, adding consumer product safety protections to this list couldn't be happening at a better time." 

Mr. Miles and Mr. Kohn are absolutely correct in their assessment of the Bill. It is great to know that we have consumer and employee rights champions on such important issues.  There are two key Senators that need to be acknowledged for their efforts in this legislation,  Senator Claire McCaskill (D-MO) and Sen. Mark Pryor (D-AR). Their tireless and valiant efforts will help make a difference in the improvement in the CPSC and provide safety measures to protect Whistleblowers. According to Senator McCaskill,  “We may get the lead out of the whistles, but if we don’t protect the people that are blowing the whistles, we’re not going to get the information we need”.

The next step is to get the S. 2045, the Consumer Product Safety Commission Reform Act of 2007 passed by the entire Senate.  All eyes are on the Senate.

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Let your voice be heard by your Senator. Choose Kids Over Big Business! 

Please stand up and be counted by contacting your local Senator about this important issue. We want to share the recent letter by the Public Affairs Director of the National  Whistlebower Center urging concerned citizens to contact their local Senator. 

Click Here to find your local Senator

Would you want to know if a cargo ship full of lead-laden toys or toxic toothpaste were heading for U.S. ports and our stores? Protecting our children from defective or dangerous products depends on information provided by whistleblowers. Under current laws, a manufacturing employee who reports unsafe products is not protected from employer retaliation. A bill in the Senate, S. 2045, would protect these whistleblowers--but Big Business has declared war on the new law, and is fighting for the power to fire honest employees at will.

As you are well aware, defective and dangerous products have sickened our children and put us all at risk. The Senate Commerce Committee is set to vote on this legislation next Tuesday, October 30, and lobbyists (such as the National Association of Manufacturers) are lining up to voice their fervent opposition.

Perhaps the manufacturers should take a look at a new study conducted by Price Waterhouse which showed, once again, that whistleblowers are a company's #1 resource for upholding high standards. The study, available at http://www.pwc.com/crimesurvey/index.html, which included 5,400 corporate executives in 40 countries found that whistleblowers are over twice as effective as the companies' own auditors.

Big Business has fired the first shots; we must Fight Back. Whistleblower protections for manufacturing employees are indispensable, especially for those overseas. Without one honest manager, auditor or inspector in those far-flung factories who is willing to speak up without fear of retribution, we may not know about a defective or dangerous product until it is too late.

The bill is S. 2045, and it is being voted on by the Senate Commerce Committee Tuesday, October 30. We can win this fight, but not without an overwhelming response from determined citizens like you.

Sincerely,

Marshall Chriswell
Public Affairs Director
National Whistleblower Center

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According to a recently unsealed qui tam suit, several major insurance carriers are being charged with over-billing the government for Hurricane Katrina damage in Louisiana. In this suit, a group of former insurance adjusters, gave compelling evidence that they personally reinspected over 100  properties with flood and wind damage. In every instance, the federal flood program was overcharged for storm damage, while underestimating wind damage claims.

The suit has been under seal in the in U.S. District Court in New Orleans since it was filed last August. A  qui tam or whistleblower suit, filed by a private individual on behalf of the government, is automatically placed under seal for a period of time. Government prosecutors investigate the evidence and determine  whether they want to take it over.

In this whistleblower suit, Judge Peter Beer, unsealed the suit and cited the  the defendants for "defrauding " the U.S. government and violating the False Claims Act by knowingly submitting fake Katrina damage bills to the government for payment. While insurance companies "maxed out or nearly maxed out" flood policies from the Federal Emergency Management Agency, they "substantially underpaid" payments for wind damage at the same properties.

"Rather than follow in good faith the streamlined procedures that FEMA had set up, defendants instead systematically adjusted, paid and submitted reimbursement claims to NFIP regarding losses that obviously should not be covered by flood policies. They did so in massive quantities," the complaint reads. "Defendants defrauded NFIP by misattributing wind damage and other non-flood losses to the flood policies underwritten by the Government rather than correctly attributing such losses to causes that are covered by their homeowners policies."

There is an estimate of $9.24 billion being discussed as a possible amount that the flood program was overpaid in Louisiana from Katrina and Rita flood damage.  

All eyes are on Louisiana to see how this qui tam case develops.

Click Here to read more about this in the Louisiana Times Picayune.

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The Industry giants that control 90% of the $15 billion Orthotics Industry, are rumored to be close to a settlement for defrauding the government and taxpayers. They are accused of illegally paying surgeons to use and promote their products. The major players that control this industry are: DePuy Orthopaedics,  Zimmer Holdings Inc. and Biomet Inc., Stryker Corp., and Smith & Nephew PLC.

Although there are no allegations that  patients were jeopardized,received poor products or services, the prosecution contends the money that was given to the doctors had the sole purpose of buying loyalty for specific products and the doctors did not mention this to their patients. If these allegations prove to be true, it will be a violation of anti-kickback statutes for hospitals and health professionals who participate in Medicare.

Settlements are rumored to be in the hundreds of millions, which is only a fraction of the revenue for this robust industry.  As Brian F. LaBovick, Esq. mentioned previously on this whistleblowerlawblog, "I am often suspicious that if they "settled" for $100 million dollars  they must have made $500 million in their fraud", it makes you wonder if the settlement should be higher.

Money received in the settlement will likely go back to Medicare for the over payments. Hopefully, the whistleblowers (relators) will share in this reward.

Click Here to read more from Health Decision.org

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Recently the The Kansas City, Mo., School District came under fire for making false claims and statements regarding the Federal E-rate program from 2002-2006 according to the  has agreed to  the Justice Department. The school district has agreed to give up more than $13.6 million in claims for federal money and to pay the United States $66,000 as a civil settlement to settle the false claims  regarding the Federal Communication Commission's E-Rate program.

“The E-Rate Program makes federally mandated funds available to the poorest schools in the nation for Internet access and wiring,” said Peter D. Keisler, Assistant Attorney General for the Civil Division. “False claims to this very important federal program will not be tolerated.”

The United States learned of the allegations settled by Kansas City School District when a relator, American Fiber Systems Inc., filed a qui tam or whistleblower action in May 2006. The settlement resolves both the relator’s and the United States’ claims against Kansas City School District.

This case shows their is no discrimination where justice is concerned. The government will prosecute any organization for fraud. Three cheers for the relator, American Fiber Systems for helping to uncover the fraud.

Click here to read more from the Department of Justice and from the Kansas Business Journal.

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Dear Whistleblower Law Blog Loving Readers:

I know I write some pretty tongue in cheek messages, however, there are serious issues going on in the world that simply are so numerous and so grand in scope that the individual American doesn't know how to keep up or how to help out. Today one of those issues has popped up. Here is the issue: The Atlas Corp. owns a uranium tailing pile in Moab, Utah. Don't tune out, Moab, Utah is going to be important to you, stay with me. There is about 10.5 million tons of uranium mill waste which includes 426 million gallons of contaminated liquid waste seeping from the unlined site. The site is about 130 acres and has groundwater the feeds the Colorado River with radioactive waste and other toxins. Lets put aside the fact that 25 million people use the Colorado for their drinking water and that the Uranium content in groundwater near the Moab site is 530 times too high and just concentrate on the solution right now.

The Project on Government Oversight did a report on this in 1999. At that time the problem was terrible, but the solution was found. The Department of Energy (DOE) originally projected that the site would be cleaned up by 2011. BUT, the Dept. of Energy now wants to permit them to extend the clean up date by a 17 years. That means the site will continue to leech toxins and radioactive waste into the Colorado until 2028. The Oak Ridge National Lab's 1998 report said that even if the first Atlas plan is implemented the radioactive waste will continue to contaminate the Colorado River for another 270 years.

This is simply wrong. They had 11 years to fix the site. The fact that Atlas is using bankruptcy as a means to escape responsibility is not a viable rationale for the government to fail in finding a solution for the benefit of its citizens. Today you can help force a solution.

Here is what we ask: Find your elected official and write them. Tell them to support Representative Jim Matheson's (Democrat from Utah) amendment to the Energy bill which will support the quick clean up of the Moab site. If we do not speak up today the amendment will be overlooked.

You can find your  elected official at the POGO web site by clicking here: www.http://ga6.org/pogo/leg-lookup/search.tcl

Thanks,
Brian

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The wheels of justice turn slowly, but when they come around the effect can be crushing. I love it. A plus $100 MILLION verdict (against Bill L. Harbert construction companies) . Ok, we hear about the $100 million plus settlements, but I am often suspicious that if they "settled" for $100 million dollars that they must have made $500 million in their fraud. That, of course, only means the fraudulent jerks win the battle of litigation. But, then you get the VERDICT. Well, as a trial attorney, the word verdict just turns me on. I simply can't help believing that justice was served. So, cheers to Keith Morgan and Carolyn Mark the prosecutors on the case. From an ex-federal prosecutor, now, self acclaimed Civil Justice Prosecutor (which really just means a guy who likes to bring scamming corporations to justice), to a standing AUSA, hats off to you and the great work you both must have done to achieve that fine result.

I hope every paper in the country covers this news, but from what I have read in my local paper, it was simply swept under the rug. Who really cares about $100 million in fraud that was just recovered for the taxpayer anyway. There is a delicate balance in the world between all the criminals and all those seeking to stop this type of crime. Mr. Morgan and Ms. Mark are on the right side that scale and I just like letting the world know about them. Ok, I am stepping off my soapbox now. Good night.

Brian

Click Here to read the Birmingham News Article - May 15, 2007

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We are pleased to announce that Brian F. LaBovick, Esq. will be featured on Law Talk online which can be accessed at www.Radiopalmbeach.com Monday evenings from 7pm - 8pm EST.

Attorney LaBovick will cover Qui tam - False Claims Act issues and verdicts along with other breaking legal news that affect consumer rights.

Tune in on your computer by going to www.Radiopalmbeach.com and join in the discussion by calling in or emailing questions.

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Monday begins the kickoff of the Washington Whistleblower Week, which runs from May 14 - May 18. The Government Accountability Project (GAP), 45 national public interest groups and hundreds of whistleblowers from around the country will be in Washington for this event.

We will share the latest news from Washington with you on this site:  ww.whistleblowerlawblog.com

Stay tuned for major decisions and discussions from key players on new whistleblower legislation.

Click Here for more information from the Government Accountability Project (GAP) on a listing of events.

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The Loma Linda Behavioral Medicine Center in Redlands has paid the government more than $2 million to settle allegations that it fraudulently overbilled federal health insurance programs. The government received notice that a federal judge had unsealed allegations against Loma Linda BMC contained in a "whistle blower" qui tam lawsuit.

The qui tam settlement - includes interest -resolves allegations made against Loma Linda BMC in a lawsuit filed pursuant to the qui tam provisions of the False Claims Act. The qui tam lawsuit  was filed in 1998 by a former employee of Health care Financial Advisors (HFA). The lawsuit alleges that HFA helped its hospital clients seek reimbursement for unallowable costs.

The Loma Linda BMC qui tam settlement is the latest in a series of settlements with defendants in the suit. Last year, Jackson Memorial Hospital in Miami paid more than $14 million and St. Elizabeth Regional Medical Center in Lincoln, Neb., paid more than $4 million to settle qui tam allegations that they had failed to disclose and return overpayments made by the Medicare and state programs.

Click Here To Read about the case in the Corporate Crime Reporter and Redlands Daily Facts

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The Department of Justice filed papers indicating that the government may want the $7.5 million  dollars the jury said was defrauded from the government by Kerr-McGee.

The DOJ requested that Judge Figa to not enter a judgement of dismissal in the case for 30 days while it takes time to consider whether or not to intervene.

“The Supreme Court has instructed that where a court dismisses a relator because he is not an original source, the court nonetheless retains subject matter jurisdiction if the United States intervenes,” government attorneys argued. “Thus, if the United States intervenes in this case, the court will retain jurisdiction despite its March 30, 2007 order that it lacks jurisdiction over Maxwell’s allegations.”

Attorneys for Maxwell filed papers with the court arguing that the jury’s verdict belongs “to the United States of America.”

Attorney Robert Christensen's blog makes an interesting point, when he states in his blog post "that It should not come to anyone's surprise that our government is oftentimes too close to the industries it is regulating. And that many regulatory agencies are run and staffed not by regulators but industry profiteers. Time will tell, how the course of events will play out in this case Uniter Sates v. Kerr-McGee. Keep watching.....

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Judge Phillip Figa, a federal judge in Denver, overturned a jury verdict in favor of Bobby Maxwell, a whistle-blower at the Interior Department who charged that the Kerr-McGee Corporation cheated the government out of millions of dollars for oil and gas it pumped in publicly owned coastal waters.

According to a Denver Post article citing the ruling, Kerr-McGee's attorney, Scott Barker  "Judge Figa's order is a vindication of Kerr-McGee's position from the very outset of the case. This result is especially appropriate since ... Kerr-McGee had properly and fully paid all the royalties that were due." Bobby Maxwell's attorney, Richard LaFond states "They will definitely appeal. A jury determined in January that Kerr-McGee underpaid $7.6 million. With additional fines and penalties, Kerr-McGee was liable for up to $39 million in damages, according to LaFond.

The ruling could have big implications for whistle-blowers, as well as for the oil and gas industry. According to a New York Times  article (subscription required), three other federal auditors in Oklahoma City have filed similar fraud lawsuits against more than a dozen oil companies; those auditors also say that they were ordered by superiors to stop making their accusations. 

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It seeks triple the amount of the damages, as well as civil fines, fees and costs under the False Claims Act. It didn't elaborate on a total dollar amount for its five claims but seeks a jury trial because of the alleged breach of contracts.

Click Here to Read more details on the story in the Wilwaukee Journal Sentinel

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There are a million ways to rip off the government. That is why the Qui Tam law’s (Federal False Claims Act) language is so broad. Yesterday I blogged about an HMO getting slapped with a huge verdict and penalty for ripping off Medicaid, last month I was upset by defense contractors posting ghosts instead of, and today I am blogging about a road contracting company which failed to follow the government regulations on hiring disadvantaged business entities.

What happened here is that two construction companies were awarded government contract to perform road work. As a part of the award the construction companies promised to hire disadvantaged business entities (DBEs) to do the work. What are DBEs? DBEs are businesses are owned by minorities, women, or socially or economically disadvantaged people. The purpose here is to get more people to enter the road construction industry.

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A former executive at Keyspan is allowed to proceed with a whistleblower lawsuit in federal court. His lawsuit charges that he was fired by Keyspan in retaliation for bringing allegations of accounting errors and possible financial fraud involving millions of dollars to the attention of  executives at the company.

Judge Sterling Johnson Jr., Eastern District of New York,  denied KeySpan's request for summary judgment.  "This Court will defer to a jury's judgment [as to] whether Defendant [has] establishe[d] by clear and convincing evidence that Plaintiff's termination was non-retaliatory," Johnson said in Mahony v. Keyspan, 04 CV 554

The judge did not rule on the validity of the whistleblower's underlying accusations.

Read more about the developments in this case in a recent New York Law Journal article.

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According to recent findings in an audit by the Justice Department,  the FBI improperly used the USA Patriot Act to obtain personal information about people in the United States.

The FBI Director, Robert Mueller, takes full blame for not putting more safeguards into place. He promises to correct the problems and does not plan to resign.

Click Here for Article on Law.com to read more on the Justice Department's findings.

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The Department of Justice filed a Civil False Claims Act lawsuit against two principals from a company for fraudulently obtaining loans and grants from federal agencies after the September 11, 2001 terrorist attacks in NYC.  The accused claimed their executive search firm had leased property and maintained equipment at 2 World Trade Center when, in fact, the company never had operatios in this location. The suit seeks a judgement of $918,000, plus penalties. They were both found guilty and convicted for federally related criminal charges.

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The House Oversight and Government reform Committee approved landmark legislation to overhaul the law protecting federal government whistleblowers.  H.R. 985 "The Whistleblower Protection  Enhancement Act of 2007" was approved with a unanimous vote of 28-0. This is truly a a successful joint effort on behalf of the committee. Hopefully the House will come together and pass this necessary legislation without delay. This is of course after the Leadership brings this to floor for a vote.

Click Here for More from the Government Accountability Project

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