In addition to states creating and strengthening state qui tam/false claims acts around the country, the world of legal blogging has exploded. When we started, blogging was somewhat a novel idea for law firms.  Not anymore, there are over 1500 legal blogs and new ones being created weekly. Check out some of the legal blogs at Kevin O'Keefe's "Real Lawyers Have Blogs",  Justia's Justia Blawg Search, Law.com's Legal Blog Watch, ABA Law Journal Blawg Directory, and the Blog carnival Blawg Review to see for yourself.

In the beginning, we had only only a few readers, but we were encouraged by Kevin O'Keefe at LexBlog not to be discouraged but to keep on blogging. Well it has worked, reader traffic increases weekly and page views are over 3500 per month. There was a time when page views reaching 500 was a milestone.  We look forward to the numbers surpassing the 5000 mark.

In this past year, we have enjoyed the discussions, learned a lot, and look forward to making the Whistleblower Blog even better.  We are working on some cool additions for the blog and look forward to reader feedback.

We encourage readers to share thoughts and opinions about the whistleblower law blog.  Our goal is to keep this blog relevant and interesting.

Thanks again for reading our blog and joining us on our blogging journey.

Click Here to read more on the new UK Qui Tam statute from a recent article in The Times UK.

Brian

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

This settlement is part of our ongoing commitment to fighting abuse of Medicare's durable medical equipment benefit," said Assistant Attorney General Peter D. Keisler.

The Scooter Store Inc. was accused of fraudulent medicare claims for their motorized scooter. The company ran a savvy tv and print advertising campaign that enticed seniors to call them regarding a mobilized scooter.  The ads were very effective in getting the seniors to sign up and purchase the scooters.  How could anyone refuse, when they were told that medicare and insurance would pick up the cost?  The real problem began when the company coerced doctors into prescribing the mobile scooter as a medically necessary item. It does not stop there, The company  would then bill Medicare for power wheelchairs which cost about $5000 to $7000. This was considerably more than the $1,000 to $2,000 advertised motorized scooter. If it could not get any worse, The Scooter Store Inc., sold used equipment as new and unnecessary additional accessories. 

Thankfully, the brave whistleblower, a former Scooter Store, Inc., employee came forward with this information.  As a result of this bravery, the whistleblower will be awarded the statutory amount of $3,228,251, according to the Department of Justice.

According to Assistant Attorney General Peter D. Keisler, "Pharmaceutical companies need to know that they will be held accountable for off-label marketing schemes and other illegal activities that affect those programs.” More pharmaceutical companies should be put on notice, they will pay for their illegal activities.

The four whistleblowers will collectively receive in excess of $1,078,000 as their statutory award. Under the qui tam provisions of the False Claims Act, whistleblowers can file an action on behalf of the United States and receive a portion of the settlement if the government reaches a monetary agreement with the defendants.

Click Here to read more on this Medicis Settlement from the Department of Justice.

Medicis announced this week, their first quarter 2007 profits were better than expected. I guess confession is good for the soul. They are trying to put their past misdeeds behind them and move forward. Hopefully, they will learn from the past.

Click Here to read The New York Times article on how this retired whistleblower helped save taxpayers millions of dollars if not billions.

Many states are creating State False Claims Acts in response to the incentives Congress adopted in the Deficit Reduction Act. New York recently approved a State False Claims Act.

Representative Edward Lindsey and Senator Seth Harp  sponsored this Bill.

Click Here to read the Georgia Whistleblower Bill.

The beauty of the judgment is that not only did the company get hit with a $144 million dollar judgment but they were also slapped with a huge penalty by the Judge. God Bless him for using the law to correct bad behavior. Everyday huge corporations laugh at the anti fraud laws and say to themselves, “we are above the law, even if we are caught,  we will tie this thing up forever in court and when the chips finally fall we will “negotiate” out of paying any penalty and just pay back what we defrauded our great nation. “ Be warned, if you end up in Judge Leinenweber’s court, he is going to properly punish your company for fraud.

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.

The workers estimate the overpayment is millions of dollars. The four say the Company intentionally labeled the fencing at the plant as “non-radioactive” when in actuality it was contaminated with radiation. The quick disposal of this material allowed the company to be paid a performance payment. They claim the company also charged the government for work that was ignored or not completed.

The US Attorney’s office declined to take on this case. The attorney for the four workers stated that the government found many instances of wrong doing but the Dept. of Energy would not help pursue the wrongdoers.

Now it is up to the attorney of the former workers to pursue the lawsuit and make a claim for the lost funds, treble (3x) damages and a civil penalty of $5000 to $10,000 for each violation, plus attorney fees.

So why won’t the Dept of Energy help. My guess is that the problem is two fold, 1) They don’t have enough help and 2) They would have to admit they failed to properly oversee the company. One thing we know is that no one in the Bush Administration ever admits to being wrong.

 Brian

However, under a new decision of December 2006 this law will not apply unless, like the detectives in Drag Net you have the facts. Just the facts. The whistleblower can’t rely on rumors to report fraud.

Unfortunately, Sharon forgot to get something that was very important to a Qui Tam case. EVIDENCE. In this case the United States Court of Appeals for the 7^th Judicial Circuit found that Sharon’s whistle blowing was based strictly on rumors. The reason is that the legislature never meant for whistle blowing to be based on rumors. Without some “objective” basis for the claim the whistleblower isn’t actually blowing the whistle but in fact simply acting like “chicken little” (yes the Federal Judge actually compared Sharon to the old fable and recent movie star). Since Sharon and the other gossips had no hard evidence or even any first hand knowledge of the “alleged” fraud she did not become an official “whistleblower” under the statute.

Needless to say, the Foundation was not happy with Ms. Lang. Therefore, after making the complaint to the FBI, Ms. Lang was fired. This was upsetting to Ms. Lang as she claimed she was discharged in retaliation for her report to the FBI. Hard to imagine, but maybe it’s true. (Sorry about the sarcasm.) 

Ms. Lang then sued Northwestern Foundation for violating her rights under the False Claims Act. The trial judge said, you’re a gossip and not a whistleblower and threw her claim out of court. The actual holding was that Sharon did not have a remedy under 31 USC 3730(h) because there was no action filed, or to be filed, under the False Claims Act, but it works the same way.

The Court of Appeals agreed with the trial judge and affirmed his decision. The appeals court based their decision on Neal v. Honeywell, Inc., 33 F.3d 860 (7th. Cir. 1994), which limits protection to legitimate False Claims Act violations and does not give protection to employees who… "behave like Chicken Little… without advancing any goals of the False Claims Act."

The Court in Lang’s case said that she played the part of Chicken Little by calling the FBI about imaginary fraud without having any objective basis for her belief. They went on to say that if Lang was a problem for her management team that was too bad for her because the False Claims Act is not intended to protect problem employees who are likely more problems then they are worth to management. They also said that Lang’s intent was irrelevant and that without objective facts the False Claims Act simply does not protect her.

“What Lang actually believed is irrelevant, for people believe the most fantastic things in perfect good faith; a kind heart but empty head is not enough. The right question is whether her belief had a reasonable objective basis, and sensible jurors could find that it did.”

So, my friends, while I agree that the FBI can’t chase down rumors of crazy employees, there is an obvious danger here. That danger is that employees often see and hear about fraud but are never in a position to gather any real evidence of that fraud.   Certainly we don’t want employees to run amok with allegations of fraud that border on the fantastic; but what about the rational and reasonable claims. Is it really a “fantastic” or irrational claim that the foundation was falsifying information to the Federal Reserve to save a percentage point or two on multimillion dollars of debt? Sure sounds reasonable to me. Further, if the FBI had investigated and found evidence of fraud, wouldn’t Ms. Lang then get protection? It appears not.

If you hear any good gossip don’t spread the rumor. Keep it to yourself and go find hard evidence. Then find a good Qui Tam attorney to document the case. After fully documenting and preparing a solid case turn in the crooks. If you don’t properly set up your case, the bad guys are going to get off every time.

Brian F. LaBovick, Esq.