May 21st, 2013
This morning, the Senate released a scathing report regarding Apple’s offshore tax practices. Among the allegations is that the company, through a complex transfer pricing scheme, kept a disproportionate amount of profits with its Irish subsidiaries, allowing the company to avoid sizeable U.S. tax obligations. According to the report, from 2009 to 2012, Apple allocated $4 billion in R&D costs to its U.S. unit, which had $38.7 billion in profits, while its Irish subsidiary had $4.9 billion in R&D costs—and $74 billion in profits.
Similar allegations have recently been levied against other large, multinational corporations, such as Amazon, Google, and Starbucks. In fact, the IRS has long been concerned that foreign-controlled US corporations are potentially “stripping away” profits from the United States through non-arm’s length pricing and potentially “abusive” financing structures. Consequently, the IRS has designated transfer pricing as a key focus of its international compliance initiatives. In the past year, the IRS has significantly ramped up its emphasis on transfer pricing enforcement, as it has put together an elite group of transfer pricing specialists to crack down on the unlawful practice.
Transfer pricing is a complex method often used by multinational corporations to lower their tax burdens in the United States. In a typical scenario, a parent company may set up a number of subsidiary companies all over the world and move goods, services, and assets from one to another. Under Internal Revenue Code (“IRC”) §482, the appropriate transfer price between related parties is that which would have been bargained for and agreed upon but for the fact that the related parties had not been related, also known as an arm’s length transaction. When choosing a transfer pricing method, a company must select the “best method,” defined as the “one that provides the most reliable measure of an arm’s length result.” IRC §482.
In an unlawful transfer pricing scheme, however, arm’s length transactions are missing. Instead, transactions are structured in order to shift profits from high tax countries, like the United States, to low tax countries, like Ireland, to lower their U.S. tax burden.
Pursuant to IRC 6662(e) and 6662(h), for those who violate the rules set forth in §482, there are two types of penalty thresholds which need to be considered; the valuational (transactional) threshold and the net §482 adjustment threshold. Under §6662(e), if the valuation of any transfer price is 200% greater or 50% or less of an arm’s-length transfer price or if the net §482 adjustment for the particular taxable year exceeds the lesser of $5 million or 10% of the taxpayer’s gross receipts, then the penalty for exceeding the particular threshold is 20%. Conversely, under §6662(h), if the valuation of any transfer price is 400% greater or 25% or less of an arm’s-length transfer price or if the net 482 adjustment for the particular taxable year exceeds the lesser of $20 million or 20% of the taxpayer’s gross receipts, then the penalty for exceeding the particular threshold is 40%. Additionally, in cases where no transfer price was charged and/or no transfer pricing report was prepared, then the 40% penalty will generally always apply.
If you have knowledge of an unlawful transfer pricing scheme, or any other form of Tax Fraud, and would like to discuss the possibility of a whistleblower award under the IRS Whistleblower Program, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
Tags: 482, Arm's length, Transfer pricing
Posted in Abusive Tax Shelters, Corporate Tax Fraud, IRS Whistleblower Office, Tax Fraud | Comments Off
May 14th, 2013
On Monday, May 13, 2013, generic drug manufacturer, Ranbaxy USA Inc., a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories Limited, agreed to pay $500 million to resolve allegations that it falsified drug data and systematically violated Current Good Manufacturing Practice (“cGMP”) regulations, resulting in the manufacture, distribution, and sale of drugs whose strength, purity, or quality differed from the drug’s specifications or that were not manufactured according to the FDA-approved formulation.
The settlement is the largest drug safety settlement to date with a generic drug manufacturer.
As part of the settlement, the company agreed to pay $350 million in civil penalties under the False Claims Act, which allows private citizens to bring civil actions on behalf of the United States and share in any recovery. The Ranbaxy settlement resolves a lawsuit filed by Dinesh Thakur, a former Ranbaxy executive, who will receive approximately $48.6 million as a result of his efforts in blowing the whistle.
cGMP regulations outline the requirements that drug manufacturers must follow for the manufacture, processing, packing, and holding of a drug. The regulations, which are enforced by the U.S. Food and Drug Administration (“FDA”), provide for systems that assure proper design, monitoring, and control of manufacturing processes and facilities. Adherence to the cGMP regulations assures that a drug meets the requirements as to safety and has the identity and strength, and meets the quality and purity characteristics, which the drug purports or is represented to possess.
If a company is not complying with cGMP regulations, any drug it makes is considered “adulterated” under the law. The federal Food, Drug and Cosmetic Act (FDCA) prohibits the introduction or delivery for introduction into interstate commerce of any drug that is adulterated. Moreover, the government has taken the position that adulterated drugs, those whose strength materially differs from, or the purity or quality falls below, the strength, purity, or quality specified in the drug’s FDA-approved New Drug Application, the drug’s labeling, and/or the standards set forth in official compendium, are not eligible for payment by the government. Consequently, any claim for payment submitted for an adulterated drug may give rise to liability under the False Claims Act.
Ranbaxy also pleaded guilty to felony charges relating to the manufacture and distribution of certain adulterated drugs made at two of its manufacturing facilities in India. Under the plea agreement, the company agreed to pay a criminal fine of $130 million, and forfeit an additional $20 million.
The civil case was filed in the U.S. District Court for the District of Maryland, as U.S. ex rel. Thakur v. Ranbaxy Laboratories Limited, Case No. JFM-07-962 (D. Md.). Mr. Thakur was represented by Andrew M. Beato and Bob Muse of Stein Mitchell Muse & Copollone.
The criminal case is U.S. v. Ranbaxy USA, Inc., JFM-13-CR-0238 (D. Md.).
If you have knowledge of cGMP violations and would like to discuss the possibility of a whistleblower award under the False Claims Act, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
Tags: Adulterated drug, cGMP, cGMP violations, Good Manufacturing Practices
Posted in False Claims Act | Comments Off
April 12th, 2013
**UPDATE**
On March 13, 2013, the United States Tax Court issued an order calling for an evidentiary hearing to determine whether Joseph Insigna ever received a determination from the IRS. Order, Joseph Insigna v. Commissioner of Internal Revenue Service, No. 4609-12W (March 13, 2013). In his petition to the Court, Insigna argues that, although he has not received a final determination letter from the IRS, his whistleblower claims “have, as a practical matter, been denied, and that he has therefore received a de facto rejection.”
In response, the IRS argues that Tax Court lacks jurisdiction to hear the matter because it has not, in fact, issued a determination on Insigna’s claim.
While both sides seem keen on arguing over whether Tax Court has jurisdiction over a claim in a situation when the IRS unreasonably delays in failing to issue a determination letter, the Order makes clear that the Court does not intend to reach that question unless it must. Instead, the Court will first focus on whether Insigna did, in fact, receive a determination — even a de facto determination .
Pursuant to the whistleblower statute, Tax Court has jurisdiction only if there has been “any determination regarding an award.” Id. To that end, the Court noted that the statute “does not explicitly require a ‘notice’ of a determination, nor a written determination, nor even any communication of a determination.”
The purpose, then, of the evidentiary hearing is to determine whether a de facto determination has, in fact, been made. To reach that conclusion, the Court will seek to determine “whether the IRS has completed its consideration of petitioner’s claim; what, if anything, the IRS is still doing with regard to petitioner’s claim; and whether the IRS expects to do anything in the future with regard to petitioner’s claim.” Id. Notably, the Court states that “[i]f there has been a cessation of administrative action, then a reviewable determination may have been effectively made thereby.” Id.
A former bank executive recently filed suit against the Internal Revenue Service claiming that the IRS owes him a reward for blowing the whistle.
Joseph A. Insinga filed a claim for an award with the IRS Whistleblower Office in 2007, one year after Congress passed a law establishing the Whistleblower Office. Under the Tax Relief and Health Care Act of 2006, tax whistleblowers may receive an award ranging from 15% to 30% of the total taxes, penalties, and interest collected by the IRS, with the actual percentage awarded based on an informant’s contribution to the case.
Insinga claims that the IRS collected proceeds from the allegedly fraudulent taxpayers based on information that he provided, but he has yet to receive a response from the IRS regarding an award. As a result, Insinga filed a claim in the United States Tax Court, claiming the IRS owes him a portion of the proceeds it collected based on his information.
According to his petition, for at least two years, the IRS led him to believe that an award was forthcoming yet, following purported payments by the targeted taxpayers in November 2011, the IRS changed its tune, informing Insigna that his claims “were on life support.” Moreover, the IRS claimed that there were “other sources” of the information Insigna provided nearly four years earlier. The IRS subsequently informed Insigna that a final decision would be issued soon. According to Insigna, that statement was made in November 2011. Following nearly four more months of silence, Insigna filed his petition in or around February 2012.
The news of Insinga’s claim does not come at an opportune time for the IRS, which earlier last week was the subject of a scathing article on Forbes.com, critical of its failure to reward whistleblowers for valuable information. According to the author, Erika Kelton, an attorney at Phillips & Cohen who represents whistleblowers before the IRS, the problem with the IRS whistleblower program is not the “quality of the whistleblower information that the IRS is receiving” but rather “the IRS itself and institutional resistance to whistleblowers within the IRS.”
In FY 2010 alone, the IRS collected $464.6 million from taxpayers under its whistleblower program, so it is clear that the information is out there. The problem is that the IRS hands out too few awards, and takes too long to pay them.
It has recently been suggested that the IRS establish a website to monitor the status of its whistleblower claims. Even if personal data was redacted in accordance with IRS regulations, the website would at least reassure whistleblowers that their claims are being processed.
Whistleblowers should be viewed not as a burden, but rather as a weapon in the fight against fraud. After all, the False Claims Act recovered over $4 billion in federal funds in FY 2011. Given that the annual gap between what is owed in taxes and what is paid is approximately $385 billion (and growing), the IRS would be well served to use the tools Congress provided when it established the whistleblower program and follow in the footsteps of the False Claims Act in an effort to eliminate tax fraud and the $385 billion gap.
If you have knowledge of Tax Fraud and would like to discuss the possibility of a whistleblower award under the IRS Whistleblower Program, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
Tags: False Claims Act, IRS, IRS reward, IRS whistleblower, IRS whistleblower program, Tax Fraud, whistleblower award
Posted in IRS Whistleblower Office, Tax Fraud | Comments Off
March 5th, 2013
Kenney & McCafferty is proud to announce that it represents a key Par Pharmaceutical insider whose knowledge, information, and evidence were central to Par’s decision today to pay $45 million to settle civil and criminal allegations. The settlement resolves allegations that Par willfully defrauded Medicare, Medicaid, and other government funded health care programs in connection with the launch of a long-term care sales force to promote Megace ES for off-label uses, including weight loss in elderly patients.
Kenney & McCafferty represented whistleblower Christine Thompson, who filed a qui tam action against Par arising from this misconduct. As a result of her efforts in coming forward with this information as well as her assistance throughout the government’s investigation, Ms. Thompson is entitled to receive a percentage of the government’s civil recovery.
To read more about the Par case, including the complaint, click here.
Tags: health care, Healthcare, off-label marketing, Par, Par Pharmaceutical, Qui Tam, whistleblower
Posted in False Claims Act, government fraud, Press Release, Recent News | Comments Off
December 19th, 2012
Philadelphia, December 19, 2012 – Amgen used illegal interlocking off-label marketing and pricing schemes to promote its multi-billion dollar anemia drug Aranesp. “It really was an ingenious, comprehensive, and very well coordinated series of marketing schemes that unfortunately endangered patients while enriching doctors for writing off-label prescriptions. There is no doubt that the schemes were wildly successful and significantly spiked Aranesp sales.
“What Amgen didn’t know after it launched the Aranesp schemes was that our client, Jill Osiecki, a long-time marketing rep, recognized the danger to patients and, on her own, reported her concerns to the Government. Later, Department of Health and Human Services Office of Inspector General Special Agents asked her to work undercover for them,” said qui tam whistleblowers’ attorney Brian Kenney, of Kenney & McCafferty, P.C.
“Jill has a master’s degree, spent 15 years at Amgen and before leaving the company, was a top performer in the biotech giant’s top-performing district. In August 2004 she was so troubled by the Amgen schemes, which she feared were putting patients at risk, that she promptly contacted the Government and went undercover at special agents’ request to make numerous recordings in five different states at national, regional, and district meetings,” said Tavy Deming of Kenney & McCafferty, P.C., who also represents Ms. Osiecki.
“At the 13 sales and marketing meetings I secretly recorded over 18 months at the request of federal authorities I’d hear speakers jokingly tell participants to turn off their tape recorders, or express the hope that no one was recording their session. Those comments were always followed by uproarious laughter. I laughed too, outside and inside, knowing the wire I wore was bringing that guilty comment directly to the Government,” Ms. Osiecki said in a personal statement.
Eight-Year Investigation
Now, after eight years, her undercover work and the breadth of the evidence and information she provided in her case became a key to the federal Government’s global settlement with Amgen for $762 million. The global settlement is comprised of a $612 million civil settlement, a $14 million criminal forfeiture payment and a $136 million criminal fine.
“We know of the many hundreds of hours she devoted at personal risk to advance this investigation and her years of hiding in plain sight as the Government investigated all the Amgen allegations,” according to Deming.
Under the federal False Claims Act (“FCA”) qui tam actions allow private citizens with knowledge of fraud to help the Government recover ill-gotten gains and additional civil penalties. The FCA allows the Government to collect up to three times the amount it was defrauded, in addition to civil penalties from $5,500 to $11,000 per false claim.
In successful qui tam whistleblower cases in which the Government intervenes, whistleblowers are entitled to receive a percentage of qui tam recoveries, typically 15-to-25 percent, generally known as, “the relator’s share.”
While six drugs are identified in Osiecki’s Complaint, the most egregious allegations concern Aranesp, an “ESA” (Eythropoesis Stimulating Agent), FDA-approved to increase red blood cell production to treat anemia in dialysis and cancer patients undergoing chemotherapy.
Off-Label Marketing Opportunity
In 2003 Amgen perceived an off-label marketing opportunity for Aranesp when arch competitor Johnson & Johnson halted studies of its “Procrit” branded ESA in cancer patients after the patients developed a higher-than-expected number of blood clots. Ironically, Amgen had licensed Epogen to Johnson & Johnson to help fund the drug’s development. Amgen had initially agreed to restrict its own use for dialysis, while Johnson & Johnson’s Procrit had broader cancer-related Medicare coverage, including, “Anemia of Chronic Disease.”
The market for the treatment of anemia in cancer patients who are not receiving chemotherapy was three times the size of the market for Aranesp’s lone FDA-approved oncology use: chemotherapy-induced anemia. To exponentially grow Aranesp’s sales and market share, Amgen developed a scheme to permeate this lucrative market from which Johnson & Johnson removed Procrit by promoting Aranesp for this off-label use, a condition that Amgen branded “Anemia of Cancer” (“AOC”).
To execute its Aranesp scheme Amgen sponsored a small pilot study purporting to show that Aranesp was effective for this condition, although that study’s parameters were clinically inadequate to substantiate the safety or efficacy of Aranesp for this off-label use. Next, Amgen gamed Medicare reimbursement regulations by using the study to obtain coverage of Aranesp for AOC in an influential medical publication that lead to Medicare coverage for what, in fact, was an untested use.
Profiting From “The Spread”
Physicians were only too happy to switch to Aranesp when they were shown a “cost calculator” by Amgen marketing reps detailing how much they could profit from the spread between what Medicare reimbursed physician practices for the drug and the doctors’ far cheaper acquisition cost. Additionally, through its false price reporting scheme, Amgen was able to create the spread so that medical practices profited handsomely from on- and off-label overuse of Aranesp, Kenney, who is a former federal prosecutor, explained.
The ugly truth about Amgen’s AOC scheme became public in January 2007, when Amgen was forced to reveal that its own Aranesp clinical studies demonstrated that Aranesp increased the risk of death when used to treat certain cancer patients.
“When it launched the Aranesp scheme Amgen already was on notice of the potential dangers from using Aranesp in cancer patients based upon the unfavorable results of the Procrit study, but Amgen put profits first,” Kenney said. The global settlement does not identify any patient deaths but, “it’s safe to assume that many terminally ill patients not only failed to have the quality of their remaining lives improved but could have died earlier than necessary,” he added.
Marketing Off-Label Prohibited
While physicians are free to prescribe drugs for off-label uses, pharmaceutical companies are prohibited from marketing the drugs for uses that have not been FDA approved. Generally, government-funded healthcare programs such as Medicare and Medicaid preclude reimbursement for off-label prescriptions. When a pharmaceutical company’s illegal marketing practices cause off-label prescriptions to be written by doctors, and those prescriptions are paid for by federal Medicare and Medicaid dollars, the payment becomes an actionable FCA violation.
In addition to agreeing to pay a $612 million civil settlement and to plead guilty to criminal charges of misbranding of Aranesp, as part of the Settlement Agreement Amgen agreed to be bound by a Corporate Integrity Agreement (“CIA”) with the Office of Inspector General of the United States Department of Health and Human Services (“OIG-HHS”).
The federal investigation into Amgen’s marketing practices was conducted through a collaborative effort of the U.S. Department of Justice, and the U.S. Attorney’s Offices for the Eastern District of New York. The New York State Assistant Attorney General’s Office led the investigation on behalf of the states and the National Association of Medicaid Fraud Control Units (“NAMFCU”).
United States ex rel. Osiecki et al. v. Amgen, Inc., et al., Civil Action No. CV-05-5025 (EDNY).
To read a statement by Ms. Osiecki, click here.
To read the complaint filed on behalf of Ms. Osiecki, click here.
To read the Settlement Agreement, click here.
About Kenney & McCafferty, P.C.:
Kenney & McCafferty, PC is the one of the most successful national law firms specializing in representing qui tam, tax, and SEC whistleblowers.
If you have knowledge of fraud or a false claim made against the government, please contact our qui tam lawyers today. Kenney & McCafferty attorneys will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys during these consultation services are confidential and protected by the attorney-client privilege.
Tags: 762 million, Amgen, Anemia of Cancer, AOC, Aranesp, ESA, Eythropoesis Stimulating Agent, Jill Osiecki, medicare fraud
Posted in False Claims Act, Press Release, Recent News | Comments Off
September 7th, 2012
With the August 21, 2012 announcement of the first award payment resulting from the whistleblower program created under Dodd-Frank, the Securities and Exchange Commission finally put weeks of speculation to rest. Although, at $50,000, the award was small in comparison to those made under the False Claims Act, the award actually amounts to 30% of the total amount the government has collected, thus far, as a result of the informant’s information—the maximum allowed under the statute. The importance of this first payment is not to be understated given that the SEC program is still in its infancy. Indeed, the fact that the maximum percentage was awarded suggests the value placed on the information brought to the SEC by the informant, and reaffirms the effectiveness of the program. While the informant has elected to remain anonymous, the SEC did state that it denied an award payment to a second informant in the case stating that the information provided did not significantly advance the investigation.
The full extent of the impact that this announcement will have on the SEC Whistleblower Program has yet to be seen, however it is undeniable that it should serve to encourage more individuals with valuable information to step forward. Indeed, in the SEC’s press release, the Director of the SEC’s Division of Enforcement, Robert Khuzami, confirmed the value of both the informant and the information he brought forth stating “This whistleblower provided the exact kind of information and cooperation we were hoping the whistleblower program would attract. Had this whistleblower not helped to uncover the full dimensions of the scheme, it is very likely that many more investors would have been victimized.”
Tags: award, SEC, securities whistleblower award
Posted in SEC Whistleblower Program | Comments Off
July 2nd, 2012
Philadelphia, July 2, 2012 – GlaxoSmithKline has agreed to pay $3 Billion in criminal and civil fines, penalties and damages to settle allegations that the company defrauded Medicare, Medicaid and other government funded health care programs in connection with its market practices for Advair, Wellbutrin, Paxil, Lamictal, Zofran, Imitrex, Lotronex, Flovent and Valtrex and Avandia. The settlement is the largest qui tam settlement in U.S. history. The settlement is the largest qui tam settlement in U.S. history.
Gregory Thorpe and Blair Hamrick, the first whistleblowers to file a qui tam action against GSK arising from this marketing misconduct nearly a decade ago, are represented by Kenney & McCafferty. As part of the record setting settlement, GSK agreed to pay $1.17 billion to settle claims brought by Thorpe and Hamrick. To read more about the settlement, click here.
To read the complaint filed on behalf of Thorpe and Hamrick, click here. Exhibits accompanying the complaint may be found here. Additionally, Thorpe’s internal report to compliance executives at GSK may be found within the Exhibits at 0000015-0000027.
To read the Complaint-in-Intervention filed by the United States, click here.
To read the Settlement Agreement, click here.
If you have knowledge of healthcare fraud and would like to discuss the possibility of a whistleblower award under the False Claims Act, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
Tags: False Claims Act, FCA, fraud, GSK, health care fraud, pharmaceutical fraud, Qui Tam, reward, whistleblower, whistleblower award, whistleblower reward
Posted in False Claims Act | Comments Off
June 11th, 2012
As the world’s largest purchaser of prescription drugs under Medicare, Medicaid, the Veterans Administration, and other government healthcare programs, the United States government has a vested interest in ensuring that prescription drugs are safe and effective.
Current Good Manufacturing Practice (“cGMP”) regulations outline the requirements that drug manufacturers must follow for the manufacture, processing, packing, and holding of a drug. The regulations, which are enforced by the U.S. Food and Drug Administration (“FDA”), provide for systems that assure proper design, monitoring, and control of manufacturing processes and facilities. Adherence to the cGMP regulations assures the identity, strength, quality, and purity of drug products by requiring that manufacturers of medications adequately control manufacturing operations.
If a company is not complying with cGMP regulations, any drug it makes is considered “adulterated” under the law. The government has taken the position that adulterated drugs, those whose strength materially differs from, or the purity or quality falls below, the strength, purity, or quality specified in the drug’s FDA-approved New Drug Application, the drug’s labeling, and/or the standards set forth in official compendium, are not eligible for payment by the government. Consequently, any claim for payment submitted for an adulterated drug may give rise to liability under the False Claims Act.
In October 2010, the Department of Justice announced its largest cGMP settlement to date, as SB Pharmco Puerto Rico – a subsidiary of GlaxoSmithKline – pleaded guilty to the manufacture and distribution of adulterated drug products. The company settled the False Claims Act allegations for $750 million, resulting in a $96 million payment to the whistleblower in the case.
Most recently, at an ABA conference, the government affirmed its position that cGMP violations can give rise to violations of the False Claims Act, particularly if the resulting drug products are unsafe, ineffective, and/or substandard.
If you have knowledge of cGMP violations and would like to discuss the possibility of a whistleblower award under the False Claims Act, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
Tags: Adulterated drug, cGMP, cGMP violations, Good Manufacturing Practices, Healthcare Fraud, Medicaid fraud, medicare fraud, whistleblower
Posted in False Claims Act | Comments Off
June 8th, 2012
Ever since it was born out of the passage of the Dodd-Frank financial reform bill in 2010, all eyes have been on the success or failure of the SEC’s Whistleblower Program. Since the program officially went into effect in August 2011, the SEC reports that they have been continually receiving high quality tips at an impressive pace of roughly seven per day. As a result, the fact that, according to insiders, the first payment of an award appears to be imminent, there is a veritable spotlight on the Commission and the award determination process.
In responding to the rumors of a pending award, Sean McKessey, Chief of the SEC Whistleblower Office, has continued to express his enthusiasm for the program and the importance of actually making that first payment. In an article published on Huffington Post, McKessey stated “I view [the program] as already having been a very significant success, but I understand that people want to see the deliverable. And the deliverable, in our view, is paying people for good information…[t]he more the better, obviously.” Further,
As we await official confirmation of the first award payment, the SEC is reminding people that the amount of the award to those who come forward remains subjective, and that the sanctions ultimately imposed against a company must exceed $1 million before they are even eligible for an award. Specifically, at a conference earlier this week, Jane Norberg, deputy chief for the SEC’s Whistleblower Office, told attendees that although there is “no hard and fast formula [in making an award determination] at this point…it is in the SEC’s sole discretion as to how much of an award there is – whether it is 10% or 30% or somewhere in between.”
In an era where the importance of corporate accountability is reaching new heights, the first award from the SEC will undoubtedly send a strong signal. “I think it will be an affirmation that this will not just be a paper program, that we’re not just going out and making speeches,” McKessey said.
Source: The Huffington Post
http://www.huffingtonpost.com/2012/05/31/sec-whistleblower-reward-payout_n_1560044.html?ref=tw
Tags: corporate fraud, reward, SEC, SEC whistleblower award, SEC Whistleblower Program
Posted in corporate fraud, Recent News, SEC Whistleblower Program | Comments Off
May 30th, 2012
A former home appraiser for Countrywide (“Countrywide”) Financial will receive a $14.5 million whistleblower reward in connection with a qui tam lawsuit that alleged Countrywide fraudulently inflated appraisals on government insured loans.
The Countrywide qui tam suit, filed by Mr. Kyle Lagow in 2009, was one of five whistleblower complaints that were settled as part of the $25 billion national mortgage settlement that state and federal officials reached with Bank of America and four other lenders this year. Mr. Lagow’s suit was settled for $75 million.
All five qui tam complaints were brought under the whistleblower provisions of the federal False Claims Act, which is a longstanding federal statute that authorizes a private citizen with knowledge of fraud being perpetrated on the federal government to bring a lawsuit on the government’s behalf. If the whistleblower’s suit is successful, the whistleblower may be entitled to up to 30% of the government’s monetary recovery. The False Claims Act also provides for certain protections for employees who are subjected to retaliation for reporting fraud.
Kenney & McCafferty lawyers are experienced in the area of mortgage fraud. If you have knowledge of mortgage fraud and would like to discuss the possibility of a whistleblower award, please contact our attorneys today. Kenney & McCafferty will consult with you about your case, including your ability to remain anonymous in filing for an award, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by the attorney-client privilege.
Tags: mortgage whistleblower, mortgage whistleblower award
Posted in Bank Fraud, bank whistleblower, corporate fraud, False Claims Act, government fraud, mortgage fraud, Recent News, retaliation, Whistleblower Protection | Comments Off
