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Posts Tagged ‘False Claims Act’
IRS Whistleblower Program: Under Attack. Again.
Friday, 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
GSK Pleads Guilty and Pays $3 Billion to Resolve Allegations Brought under False Claims Act by Whistleblowers Represented by K&M
Monday, 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
DID YOU SIGN AN EMPLOYMENT RELEASE WAIVING YOUR WHISTLEBLOWER CLAIM? EVEN IF YOU SIGNED A RELEASE, YOU MAY NOT HAVE LEGALLY RELEASED YOUR CLAIM.
Wednesday, May 30th, 2012
In order to provide an employee with a severance or layoff payment, employers now commonly require their employees to sign a Release which releases or waives all possible claims against their employer for wrongful termination, age discrimination or any other type of lawsuit that employees commonly file against employers. These releases are typically very broad and make clear that employees are releasing all claims during the entire period of employment that has anything to do with their employment.
Employers that do business with the federal and state governments or are involved in Wall Street-type finance are also now sometimes including references to whistleblower claims or even in some cases specific references to the False Claims Act (a federal law pertaining to government contractor fraud) or the Dodd-Frank law (a federal law pertaining to Wall Street-type fraud) in these employment releases.
For employees losing their jobs and concerned that they may not be able to find other employment quickly, it is natural and understandable for that employee to go ahead and sign the Release to receive their severance pay, even if they believe that they might have had a good whistleblower claim.
If you did sign such a Release and believe that you do have a good and current whistleblower claim, you may not be out of luck. Under specific circumstances that are too detailed to get into here, you may be able to pursue a whistleblower claim even if you have already signed an employment Release and even if you have already received your severance pay!
If you believe you have a good whistleblower claim, but are concerned that you may have recently signed an employment Release (or are about to sign such a Release) waiving your claim, call the attorneys at Kenney & McCafferty Law Firm and find out whether you can still pursue a whistleblower claim. The attorneys at Kenney & McCafferty are experienced in dealing with this specific issue and will help you figure out whether you can still pursue your whistleblower claim.
Tags: False Claims Act, release
Posted in False Claims Act, government fraud, retaliation, Uncategorized, Whistleblower Protection | Comments Off
Justice Department Expands Efforts to Uncover Mortgage Fraud
Wednesday, May 30th, 2012
On Thursday, May 24, 2012, the Justice Department’s Residential Mortgage-Backed Securities (RMBS) Working Group announced new resources in the ongoing efforts to investigate and uncover mortgage fraud and abuse that helped precipitate the 2008 financial crisis. These efforts include the launch of a new whistleblower website to report fraudulent activities in the mortgage-backed securities market. The Working Group wants to hear from people “who worked in the RMBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy.” These market participants include loan originators, sponsors, underwriters, trustees, and others.
The RMBS working group was established by Attorney General Eric Holder in January and has been dedicated to initiating, organizing and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market. The RMBS Working Group is a collaborative effort focused on investigating potential false or misleading statements, deception or other misconduct by market participants in the creation, packaging and sale of mortgage-backed securities.
While the Justice Department said the group’s efforts are law enforcement sensitive and, as a result, must remain confidential, generally it continues to: identify specific RMBS offerings for priority investigation through the use of various forensic tools including risk-based analytics; analyze pending private RMBS litigation throughout the country for evidentiary connections to existing law enforcement investigations; and convene operational meetings among investigators, attorneys, analysts and RMBS market experts and insiders.
Associate Attorney General Tony West said that “although the working group … [has] done a tremendous amount of investigative work already – including having issued more than 25 civil subpoenas – we know that hearing from insiders is particularly valuable.” Substantial financial rewards may be available to whistleblowers who provide specific information if that information leads to a monetary recovery by the government.
If you have knowledge of mortgage fraud and would like to discuss the possibility of a whistleblower award, please contact our whistleblower 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 attorney-client privilege.
Tags: bank fraud, bank whistleblower, False Claims Act, mortgage fraud, mortgage whistleblower, residential mortgage fraud, RMBS, RMBS website, RMBS working group, SEC investigation
Posted in Bank Fraud, bank whistleblower, False Claims Act, government fraud, mortgage fraud, Recent News, SEC Whistleblower Program | Comments Off
Mortgage Fraud And Whistleblowers
Wednesday, May 23rd, 2012
Last week the Manhattan U.S. Attorney’s Office announced a $202.3 million settlement with Deutsche Bank’s AG mortgage unit for reckless mortgage lending practices. This is the third major bank settlement related to mortgage fraud by the Manhattan U.S. Attorney’s office in 2012, having announced a $158.3 million settlement with Citibank in February and a $132.8 million settlement with Flagstar Bank FSB in March.
Both the Citibank and Flagstar settlements were the result of whistleblower claims filed under the False Claims Act.
In February, the Brooklyn U. S. Attorney’s Office announced a $1 billion settlement with Bank of America related to improper mortgage practices. Part of that settlement included a settlement of two whistleblower actions that had been filed against Bank of America for mortgage fraud.
These cases highlight the importance of whistleblowers and the False Claims Act in continuing to combat financial improprieties at the banking institutions. It also suggests that more mortgage fraud cases brought by whistleblowers will be forthcoming given the success that both the Manhattan and Brooklyn U.S. Attorney’s Offices have experienced working with whistleblowers in this arena.
If you have knowledge of Securities Fraud and would like to discuss the possibility of a whistleblower award under the SEC whistleblower program, please contact our whistleblower 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 attorney-client privilege.
Tags: bank fraud, bank whistleblower, doj investigations, False Claims Act, FHA fraud, HUD fraud, mortgage fraud, mortgage whistleblower, mortgage whistleblower award
Posted in Bank Fraud, bank whistleblower, corporate fraud, False Claims Act, FHA fraud, HUD fraud, mortgage fraud, Uncategorized | Comments Off
New York Sues Sprint for $300M Tax Fraud
Tuesday, April 24th, 2012
New York has filed suit against Sprint Nextel for more than $300 million. Attorney General Eric Schneiderman announced the “first-of-its-kind” lawsuit against the company for “deliberately under-collecting and underpaying millions of dollars in New York state and local taxes on flat-rate access charges for wireless calling plans.”
The complaint alleges underpayments of more than $100 million, costing the State nearly $210,000 per week.
The lawsuit is the first ever tax enforcement action filed under the New York False Claims Act. Twenty-nine states and the federal government have passed False Claims Acts, but only New York’s Act expressly covers tax fraud. Under the NYFCA, the Attorney General may seek triple damages, plus penalties and interest.
According to the complaint, beginning in 2005, Sprint, the third-largest U.S. mobile service provider, failed to collect and pay New York sales taxes on an arbitrarily set portion of its revenue from fixed monthly access charges. The scheme was a part of a nationwide effort by the company to obtain an advantage over its wireless competitors, all of which have complied with the “extremely clear and unambiguous” state tax law, according to Schneiderman. “Everyone else had no trouble figuring out what the tax law was – except Sprint.” In executing its fraudulent scheme, Sprint repeatedly and knowingly submitted false records and statements to New York State tax authorities.
“By deliberately evading sales tax, Sprint cost state and local governments over $100 million that could have been used for critical services and much needed resources that our state and its citizens need given the challenging economic times we are in,” said Schneiderman. The message of our office is clear – tax dodging is not acceptable and we will use every tool in our arsenal to make sure that taxpayers’ money is protected, and that honest businesses and consumers are not placed at a disadvantaged for collecting and paying their fair share of taxes.”
The State’s lawsuit was prompted by a whistleblower complaint from Empire State Ventures. As whistleblowers, they may be eligible to receive up to twenty-five percent of any money recovered by New York as a result of information they have provided.
In response to the lawsuit, Sprint issued a statement denying the allegations: “This complaint is without merit and Sprint categorically denies the complaint’s allegations.”
If you have knowledge of Tax Fraud and would like to discuss the possibility of a whistleblower award under the New York False Claims Act or 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, New York False Claims Act, Sales tax, Tax Fraud, tax underpayment, whistleblower award
Posted in Corporate Tax Fraud, False Claims Act, Tax Fraud | Comments Off
Arkansas Orders J&J to Pay $1.1 Billion over Risperdal Marketing
Wednesday, April 11th, 2012
Wednesday, April 11, 2012- An Arkansas judge ordered Johnson & Johnson to pay $1.1 billion after a jury found that the company’s Risperdal marketing campaign violated the state’s consumer-protection laws. Specifically, the jury found that J&J downplayed and hid risks- diabetes and weight gain- associated with taking its antipsychotic drug.
Circuit Judge Tim Fox determined that J&J and its subsidiary, Janssen Pharmaceuticals Inc., committed nearly 240,000 violations of the state’s Medicaid fraud law — or one for each Risperdal prescription issued to state Medicaid patients over a 3 1 / 2-year period. Each violation carried a $5,000 fine, the state’s mandatory minimum amount, bringing the total to more than $1.1 billion.
Judge Fox issued an additional $11 million fine for more than 4,500 violations under the state’s deceptive practices act.
Arkansas Attorney General Dustin McDaniel issued a statement, claiming that today’s verdict “sends a clear signal that big drug companies like Johnson & Johnson and Janssen Pharmaceuticals cannot lie to the [FDA], patients and doctors in order to defraud Arkansas taxpayers of our Medicaid dollars.”
Arkansas is one of several states who have sued J&J over its marketing of Risperdal, yet the Arkansas penalty is the largest to date against J&J. In 2010, jurors in Louisiana ordered the drug manufacturer to pay almost $258 million to state officials for making misleading claims about the drug’s safety. Less than a year later, in June 2011, a South Carolina judge upheld a $327 million civil penalty against the company. Most recently, in January 2012, Texas reached a $158 settlement with the company, which did not admit fault in connection with the settlement.
Shortly after the verdict, Janssen issued a statement indicating its intent to appeal the verdict, which would be heard by the Arkansas Supreme Court.
The United Stated continues to investigate the sales practices of J&J and Janssen related to Risperdal, including allegations that the company marketed the drug for unapproved uses. “Johnson & Johnson needs to wake up and realize they are playing a losing game. They should be running, not walking, to the settlement table,” said Patrick Burns of Taxpayers against Fraud. “[The Department of Justice] offered a global settlement for $1.8 billion last month. I am not sure that deal is going to stay on the table after this.”
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: attorney general, Department of Justice, False Claims Act, health care fraud, whistleblower award
Posted in False Claims Act, Recent News | Comments Off
Pfizer Pays $3.3M to Settle False Claims Allegations in Oregon
Wednesday, March 21st, 2012
Pfizer Inc. has agreed to pay Oregon more than $3.3 million to settle claims that the company used misleading statements and studies to market Zyvox. The settlement comes after a two-year state investigation into the marketing of the company’s drug, which is used to treat pneumonia and bacterial skin infections.
Oregon Attorney General John Kroger announced the settlement on Tuesday. The settlement follows a 2009 multistate settlement concerning Zyvox, as well as other drugs, which included $2.3 billion in fines against the company.
“Our investigation was aggressive, detailed, went placed that the federal settlement didn’t and provided additional settlement to the state of Oregon,” said David Hart, a senior AG who headed the investigation.
The complaint, filed in Marion County Circuit Court, alleged that Pfizer used “unreliable and unsubstantiated claims” in marketing Zyvox as a better alternative than its generic competitors.
Pfizer denied the allegations, yet released a statement saying it was “pleased to resolve this investigation and avoid the further time and cost of litigation.”
For more information on the settlement, see the full article in the Washington Post at http://www.washingtonpost.com/business/industries/pfizer-agrees-to-pay-oregon-33m-in-antibiotic-marketing-case/2012/03/21/gIQAfGx1QS_story.html.
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, False Claims Act, Qui Tam, reward, whistleblower
Posted in False Claims Act | Comments Off
Another BofA Mortgage Whistleblower
Tuesday, March 13th, 2012
Another whistleblower lawsuit with ties to the $1 Billion False Claims Act Bank of America settlement announced on February 9, 2012 by the United States Attorney’s Office for the Eastern District of New York has been unsealed. The suit charges the bank with fraud violations under the Home Affordable Modification Program (“HAMP”).
Gregory Mackler, a former contractor with the servicing outsourcerUrban Lending Solutions, filed the lawsuit in July. The lawsuit charges BofA with developing procedures that kept trainees like Mackler from researching or resolving any HAMP inquiries or complaints in order to avoid millions of dollars in losses while benefitting from the financial incentives of the program. The Treasury Department paid $1.8 billion in HAMP servicer incentives through December, according to the special inspector general of the Troubled Asset Relief Program.
In February, a whistleblower complaint was unsealed from Kyle Lagow, a former employee in a Countrywide appraisal unit which detailed allegations of Countrywide’s “corrupt underwriting and appraisal process. Final settlement documents have yet to be filed in the BoA settlement, which the U.S. Attorney’s Office said was the largest ever False Claims Act payout related to mortgage fraud.
If you have knowledge of Corporate Fraud, including Mortgage 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.
The Department of Justice has until March 16 to decide whether to intervene in the Mackler and Lagow cases.
Tags: bank whistleblower, False Claims Act, FERA, mortgage whistleblower, Qui Tam
Posted in Bank Fraud, bank whistleblower, corporate fraud, False Claims Act, FHA fraud, HUD fraud, mortgage fraud, Recent News | Comments Off
Attorney General Warns: More Corporate Crime Charges Coming
Tuesday, March 13th, 2012
Those individuals involved in corporate fraud may soon find themselves in the crosshairs of the Department of Justice. According to Attorney General Eric Holder, the DOJ plans to take action against individuals responsible for corporate fraud, adding that fines against corporations are not a deterrent.
“It can’t simply be that you make billions of dollars and then you pay hundreds of millions of dollars in penalties. That’s not a disincentive,” Holder said. According to the Attorney General, “there have been far too many repeat offenders.”
Recently, the DOJ has been the target of strong criticism over its failure to bring actions against individual employees responsible for corporate fraud. In the past, the DOJ has generally brought cases against corporations.
With this new approach, the DOJ hopes to counter its critics.
“We’re gonna make some news with regard to holding individuals responsible for things we tend to think of as corporate crimes,” Holder said at a meeting of state attorneys general in Washington.
If you have knowledge of Corporate 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: corporate fraud, False claims, False Claims Act, whistleblower
Posted in False Claims Act | Comments Off
