Whistleblower/False Claims Act

Blowing Whistle on Illegal and Unsafe Conduct Can Bring Big Payday

There are major federal laws which reward those “that blow the whistle” (with 15%-30% of recovery) for reporting fraud and illegal behavior—everything from healthcare billing to contractor kickbacks to environmental fraud. Currently, the penalties that may be imposed against those committing fraud is minimum of $5,000.00 for each violation, plus three times the government’s actual damages.

Here is a story of airline employee which blew the whistle on illegal practices of the airline.

There are protections for blow back and also to protect your identity. There are various programs which exist:

The CFTC program offers the most protection for a whistleblower who wants to remain anonymous. “You can pursue your claim and remain anonymous, even to the government,” says Kohn. Your identity will disclosed only after you’ve qualified for a reward. All the other programs, he says, require that you tell the feds up front who you are. “And because the government knows who you are,” he says, “there’s always a chance your company will find out.” Another big distinction: Under the IRS, SEC and CFTC programs, the government decides if they want to pursue your claim. If they decide not, then your attempt to get a reward ends. You have no legal authority to pursue a claim on your own. Under that False Claims Act, however, even if the Justice Department turns you down, you can continue to pursue your claim in court as a private individual acting on behalf of the government. “The Act empowers the average worker with the same authority as if they were the government of the United States. On paper, it’s the most powerful program of the four,” says Kohn.

Video: “Whistleblowers Change the World”

This video highlights the importance and struggles of whistleblowers.

“Whistleblowers remain the key source of information on fraud and corruption at home and abroad,” said Stephen M. Kohn, Executive Director of the NWC and author of The New Whistleblower’s Handbook. “However, they still face retaliation in many countries around the world. We need to rally our efforts to ensure that whistleblowers are protected and empowered. The first step toward making that happen is to make sure whistleblowers and anti-corruption groups understand the legal tools they have available to them.”

Record Whistleblower Reward for Former Employee: Reporting Fraud Can Pay Off (This time $72M)

Per Reuters,

The U.S. Justice Department said on Tuesday that Celgene Corp (CELG.O) had agreed to pay $280 million to settle a lawsuit that accused the company of promoting its cancer drugs Revlimid and Thalomid for off-label uses.

The case initiated under the False Claims Act by a private citizen, this time a former employee.

Brown, a former sales representative for the company, sued New Jersey-based Celgene in 2010, bringing claims on behalf of the federal government and about two dozen states, including California, Illinois, Texas and New Jersey. The case was unsealed in 2014.

Brown claimed that Celgene engaged in the off-label marketing of its drugs, which caused off-label prescriptions that were ineligible for reimbursement to be submitted to Medicare and state Medicaid programs, violating the federal False Claims Act.

The False Claim Act allows anyone with knowledge to file a secret lawsuit on behalf of the federal government. Once filed, only the federal government knows about. The federal government can investigate the claims and decide whether its worth pursuing. Per the Attorney General in this case:

The whistleblower lawsuit was filed in United States District Court by Beverly Brown, who was employed as a sales manager by Celgene, under the qui tam provisions of the False Claims Act and similar laws of the District of Columbia and the 28 states included in the lawsuit. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery. The United States may intervene in the lawsuit, or, as in this case, the whistleblower may pursue the action.

And boy did she share in the recovery.

Through a negotiated settlement and a court order, whistleblower Beverly Brown has received a total relator share award of more than $78 million for her efforts in obtaining a $280 million False Claims Act settlement against Celgene Corporation. The $280 million settlement was the second largest recovery ever recorded in a non-intervened case brought under the federal False Claims Act and the relator share award to Brown is also among the largest in history.

Normally, a whistleblower will dismiss the case if the government elects to not intervene in the case, but not Brown.

After Brown filed suit, the case remained under seal for four years while the government investigated. In 2014, the government declined to intervene, leaving Brown to either dismiss the case or pursue it on her own. Brown elected to pursue the case on her own.

Are you aware of fraudulent acts by a business? Even if you are a former employee of a business or even an actual competitor, the law rewards you for reporting that fraud. Make sure you consult a lawyer to maximize and preserve your reward. Here are some other examples: here, here.

On December 21, the DOJ announced:

The Department of Justice obtained more than $3.7 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2017, Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division announced today. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $56 billion. . .

Of the $3.7 billion in settlements and judgments reported by the government in fiscal year 2017, $3.4 billion related to lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $392 million to the individuals who exposed fraud and false claims by filing a qui tam complaint.

Whistle-blower awarded $350,000 for reporting about medically unnecessary ultrasound tests.

The Department of Justice has announced a major settlement in a case of medical billing fraud.

Acting United States Attorney W. Stephen Muldrow announces that Dr. Arthur S. Portnow . . . has agreed to pay $1.95 million to resolve allegations that he and his practice violated the False Claims Act by knowingly seeking reimbursement for medically unnecessary ultrasound tests that were performed on Medicare beneficiaries.

Dr. Portnow submitted fraudulent claims to Medicare for the evaluation and performance of medically unnecessary carotid ultrasounds, lower extremity arterial ultrasounds, abdominal aortic ultrasounds, renal and renal artery ultrasounds, and echocardiograms.

The whistleblower on this fraud was a former employee.

The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act that permits private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action. Ms. Siwicki will receive roughly $350,000 of the proceeds of the settlement with Dr. Portnow.

The Act empowers the average worker with the same authority as if they were the government of the United States. The False Claims Act specifically allows current employees, former employees or even competitors to report fraud or illegal actions. Like the whistleblower here, the statute authorizes a reward of up to 30% of the recovery to the government.