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Posts Tagged ‘corruption’
US Supreme Court Rules FOIA Responses Trigger Bar Against FCA Claims
Thursday, May 19th, 2011
Justice Clarence Thomas Wrote the Schindler Decision
Justice Clarence Thomas wrote the majority opinion holding that Freedom of Information Act request responses constitute “reports,” relators who rely on FOIA request responses can fall prey to the public disclosure bar of the False Claims Act. The Court issued the opinion in Schindler Elevator Corp v. United States ex rel. Kirk on May 16, 2011. Justice Ginsburg filed the dissenting opinion, in which Justices Breyer and Sotomayor joined.
Relator Daniel Kirk, a military veteran, worked for Schindler Elevator from 1978 to 2003. He resigned in September 2003 saying that the company had forced him out. Kirk filed his False Claims action in 2005. In an amended complaint in 2007, Kirk alleged that Schindler has improperly submitted for payment hundreds of false claims to the government because Schindler had certified it was in compliance with VEVRAA reporting requirements. Kirk alleged the certification of compliance was false.
Relator Kirk sought verification that his allegations were correct by asking his wife to ask for Schindler’s reporting information through a FOIA request. Mrs. Kirk made three requests, and DOL responded with information that showed the reports were not filed for several years in question.
Schindler asked the Court to dismiss the case on the ground that the verification information Mrs. Kirk obtained through the FOIA requests was a “public disclosure.” Under the pre-existing public disclosure rules, whistleblower claims could be dismissed if the relator was found to have “based” the allegations on specified types of publically available information. In Schindler, J. Thomas said that a FOIA response = a report = a public disclosure. He left open the question of whether or not Mr. Kirk based his allegations on those FOIA responses.
False Claims actions can be complicated, and the statute requires a whistleblower to be represented by an attorney. For a free consultation on a potential government fraud claim, please call Kenney & McCafferty, P.C. today.
Tags: abuse, clarence thomas, corporate fraud, corruption, False claims, False Claims Act, FCA, FERA, fraud, fraud reward, government fraud, public disclosure, Qui Tam, reward, supreme court whistleblower, tax whistleblower, whistle blower, whistle blowing, whistleblower appeals, whistleblower reward, whistleblowing, wrongful termination
Posted in corporate fraud, False Claims Act, government fraud, Uncategorized, Whistleblower Protection | Comments Off
Corporate Attorneys and Investigators Represent the Company – Not Whistleblowers
Wednesday, May 4th, 2011
Corporate investigators and attorneys will protect the company. It's their job.
A long time corporate investigator recently shared his concern that whistleblowers look to corporate investigators and attorneys for help and protection when they blow the whistle. Nothing could be further from the truth. “There’s nothing I can do,” said the investigator. “I’ve seen it over and over again. They are going to get their heads cut off.”
The investigator said he knew that whistleblowers, no matter the merit of their report, would be skillfully and systematically terminated with a substantial paper trail to support management’s actions.
“They look to me for help,” he said. “I work for the company. I tell them that, but they don’t seem to understand.”
Neither did CEO Ian Norris of Morgan Crucible Company. Morgan Crucible came under government investigation for an international price fixing conspiracy. CEO Norris began a campaign to obstruct a grand jury investigation, and he shared details of his campaign with Morgan Crucible’s attorney. When the government learned of Norris’s obstruction, it charged Norris with corruptly persuading, and attempting and conspiring to corruptly persuade, others with intent to influence their testimony in grand jury proceedings. Morgan Crucible waived its attorney client privilege and granted permission for corporate counsel to testify. Norris fought the testimony, saying the corporate attorney also represented Norris in his individual capacity and was prohibited from testifying.
The Third Circuit disagreed, but found that communications about scope of representation were ambiguous. Ultimately, the court ruled that Morgan Crucible, alone, held the right to waive attorney client privilege, and the attorney testified.
The attorney testified that Norris, in front of counsel, disseminated a false cover story and scripts about the price fixing and encouraged everyone, including counsel, to relay the false information to investigators. The attorney said he did not know the information was false.
Attorneys and investigators should provide employees with explicit explanations about their role in investigating allegations of fraud within a corporation. They often do not, for a variety of reasons. Bottom line – employees need to take steps to protect themselves when they report corporate misconduct internally.
For a free consult about whether you have a potential government fraud claim, call K&M today.
Tags: abuse, attorney general, corporate fraud, corruption, False claims, False Claims Act, FCA, FERA, fraud, fraud reward, government fraud, health care fraud, IRS whistleblower, IRS whistleblower program, medicare fraud, pharmaceutical fraud, Qui Tam, retaliate, retaliation, SEC whistleblower, Tax cheat, tax evasion, Tax Fraud, tax whistleblower, whistle blowing, whistleblower award, whistleblowing, wrongful termination
Posted in Corporate Tax Fraud, Employment Tax Fraud, False Claims Act, Money Laundering Tax Fraud, Offshore Accouts Fraud, retaliation, SEC Whistleblower Program, Tax Fraud, Uncategorized, Whistleblower Protection | Comments Off
ACLU Loses Attack on Seal Provisions of FCA
Monday, March 28th, 2011
ACLU Loses Attack on FCA Seal
The ACLU lost its most recent attempt to strike down the seal provisions of the False Claims Act. The ACLU had lost its case in the Eastern District of Virginia and then appealed to the Fourth Circuit. The Appellate Court affirmed the district court’s decision to dismiss the ACLU’s case.
The American Civil Liberties Union filed the lawsuit in 2009, making a facial constitutional challenge to the long standing seal provisions of the FCA. The False Claims Act allows the qui tam plaintiff/relator to file the civil complaint under seal, which means the complaint is not served on the defendant until the seal is lifted by judicial order. The seal allows the government time to investigate the complaint without alerting defendants to the specific allegations. Depending on where the case is filed, the government frequently asks the judge for extensions of a sealed complaint to allow it more time to conduct its investigation. At some point, the complaint becomes unsealed.
The seal makes filing False Claims actions more attractive to whistleblowers because the whistleblowers enjoy anonymity while the government is conducting its investigation of the defendants. If the complaint is under seal, the defendant does not know that a whistleblower is involved and many times, does not know that it is being investigated. Whistleblowers who are current employees of a defendant that is committing government fraud are able to assist the government in its recovery of fraudulently obtained government funds without worrying unduly about retaliation for reporting the illegal conduct.
Oddly, the ACLU sought to strike down the seal provisions on the grounds that they acted against the whistleblower’s right to free speech, that the seal violated the public’s right of access to judicial proceedings, and that the seal impermissibly violated the doctrine of separation of powers. The ACLU was not able to point to a single whistleblower that agreed with the ACLU’s position, however, and admitted that it did not have much familiarity with the workings of a qui tam action.
The Fourth Circuit pointed out that seals are often ultimately lifted in qui tam cases and that the United States has a compelling interest in protecting the integrity of ongoing fraud investigations. Kenney & McCafferty applauds the Courts’ rulings in this matter and looks forward to continuing working with qui tam relators in sealed government fraud investigations.
Tags: abuse, corruption, False claims, False Claims Act, FCA, fca seal, FERA, fraud reward, government fraud, government fraud recovery, Qui Tam, relator reward, whistle blowing, whistleblower, whistleblower reward
Posted in Corporate Tax Fraud, False Claims Act, Recent News, retaliation, Uncategorized, Whistleblower Protection | Comments Off
Galileo – History's Greatest Whistleblower?
Tuesday, February 15th, 2011
Galileo faces the Inquisition
February 15, Galileo’s birthday, is a fitting time to reflect upon Galileo’s experience with blowing the whistle on the Ptolemaic theory, the long held belief that the Earth was the center of the universe and that the sun and the planets orbited the Earth. Galileo today is called “the father of modern observational astronomy” and “the father of modern physics.” Stephen Hawking stated, “Galileo, perhaps more than any other single person, was responsible for the birth of modern science.” Most people don’t realize that Galileo was tried by the Inquisition for his advocacy of Copernicanism, found guilty of heresy, and spent the rest of his life under house arrest.
As brilliant he was, Galileo did not understand the environment in which he was operating, and he failed to adhere to rules and constraints placed on those attempting to advance scientific theories in the 1600s. His support of heliocentrism offended the Catholic church. The church admonished Galileo, who thought he would be clever and work around the constraints that had been placed on him. After being chastised, Galileo waited years to publish Dialogue Concerning Two Chief World Systems, but he didn’t follow the rules. To publish, he needed papal permission and formal authorization from the Inquisition. He didn’t get them. Had he followed the rules, Galileo probably could have avoided trial and arrest. Instead, Galileo was:
* Found “vehemently suspect” of heresy.
* Sentenced to formal imprisonment, which was later commuted to house arrest.
* Had his publication, Dialogue, banned.
* Forbidden to ever publish again.
After his death, the world eventually lauded his contributions, but Galileo died without acclaim and in isolation.
Whistleblowers should learn from Galileo’s mistakes. No matter how brilliant a whistleblower may be, it is impossible for everyone to know everything. There is no substitute for experienced legal advice when one decides to blow the whistle. Galileo originally had many supporters who could have guided him the intricacies of the papacy’s rules for publication. He didn’t ask, and he thought he had the situation well in hand. He was wrong.
If Galileo could not figure out how to maneuver through the intricacies of successfully blowing the whistle, who can? Fortunately, whistleblowers today have Kenney & McCafferty to call for expert advice. Whistleblowers should educate themselves on the pros and cons before blowing the whistle. If you want to report fraud against the government, save yourself some headaches. Get a free consultation by calling Kenney & McCafferty today.
Tags: abuse, corporate fraud, corruption, ecurities violations, False Claims Act, FCA, fraud, fraud reward, government fraud, health care fraud, pharmaceutical fraud, Qui Tam, retaliate, retaliation, SEC whistleblower, tax claims, tax evasion, Tax Fraud, tax whistleblower, waste, whistle blower, whistle blowing, whistleblower, whistleblowing, wrongful termination
Posted in Abusive Tax Shelters, Corporate Tax Fraud, Employment Tax Fraud, False Claims Act, IRS Whistleblower Office, Money Laundering Tax Fraud, Offshore Accouts Fraud, retaliation, SEC Whistleblower Program, Tax Fraud, Uncategorized | Comments Off
New York to Broaden Government Fraud Fight
Monday, January 31st, 2011
Eric Schneiderman stated Wednesday that his first policy effort as New York Attorney General will be to broaden the state’s current false claims efforts beyond health care to all other state and local government fraud. Schneiderman said his new program would bring “the same focus that [New York’s] Medicaid fraud recovery unit has brought to those who try to rip off the government in [the state’s] expenditures of Medicaid funds.” Chief among the expansion efforts is a highly anticipated Taxpayer Protection Unit intended to crack down on large scale tax cheats and unethical government contractors.
New York passed an enhanced state False Claims Act last year, sponsored by Schneiderman during his tenure as a state senator. Haled by Schneiderman as the “strongest anti-fraud statue in the United States,” the law is the first in the country to have a provision that allows whistleblowers to go after tax cheats who defraud New York State of more than $350,000. The Taxpayer Protection Unit will also target multi-state corporate tax fraud schemes.
Schneiderman’s presentation appears to fall in the footsteps of past New York Attorney General’s fraud fighting focus, earning the post the nickname “the Sheriff of Wall Street.” Governor Cuomo, a former Sheriff of Wall Street himself, publicly applauded Schneiderman’s efforts, stating, “Recouping taxpayer dollars illegally siphoned from state coffers is critically important.”
The expanded government fraud effort comes as New York State grapples with an anticipated $10 billion shortfall in a next year’s budget, with projected deficits over the following two years of $14 billion and $17 billion.
Kenney & McCafferty has been at the forefront of state False Claims Act filings and has experience with working with the New York Attorney General’s Office on whistleblower matters. For a free assessment of your potential claim, call K&M today.
Tags: attorney general, corruption, False Claims Act, government fraud, New York, reward, schneiderman, Tax Fraud, whistleblower
Posted in Corporate Tax Fraud, False Claims Act, Offshore Accouts Fraud, Recent News, Tax Fraud | Comments Off
