Whistleblower Blog

Lincoln’s Law and Whistleblower Claims

February 8, 2007
Michael Sullivan

Taxpayers every day lose money because of fraud against their government. Current examples include government contracting fraud in Iraq, procurement fraud regarding the efforts of the Federal Emergency Management Agency and Hurricane Katrina and numerous false claim schemes under both the Medicare and Medicaid programs. Those who are bent of fraud are usually clever and devious. This is the very reason why President Abraham Lincoln enacted the False Claims Act during the American Civil War in 1863.

During the Civil War, as today, there were
(more…)

Iraq Indictments:TheTip of the Iceberg

February 8, 2007
Michael Sullivan

As former federal prosecutors, it is always of interest to us to read about grand jury indictments involving fraud schemes. We have presented many such indictments to grand juries ourselves and know how the system works. On Tuesday of this week, a grand jury in Washington, D.C., returned an indictment against three Army Reserve Officers and two civilians based on allegations that they steered more than $8.6 million dollars in Iraqi reconstruction funds to a contractor in exchange for a variety of kickbacks and other
(more…)

New IRS Whistleblower Office Has First Director

February 2, 2007
Michael Sullivan

We saw more good news when the IRS announced the first director of the new IRS Whistleblower Office–Stephen A. Whitlock. Mr. Whitlock was formerly in charge of the Office of Professional Responsibility. He also had led anti-fraud and abuse programs at the Defense Department.

The IRS’s press release is reprinted here:

IRS Begins Work on Whistleblower Office; Whitlock Named First Director

IR-2007-25, Feb. 2, 2007
WASHINGTON – The Internal Revenue Service today named Stephen A. Whitlock as director of its new Whistleblower Office, where he will be responsible for administering the program designed to receive information that helps uncover tax cheating and to provide appropriate rewards to whistleblowers.

“This is an important new office at the IRS, and Steve brings a strong background in ethics and tax issues to help get this program off to a good start,” said IRS Commissioner Mark W. Everson. “Under Steve’s leadership, we will meet expectations from Sen. Grassley and other supporters to run a robust program.”
(more…)

State Enforcement Efforts Disappointing In Combatting Medicaid Fraud

February 2, 2007
Michael Sullivan

According to a recent report issued by the Inspector General of the Department of Health and Human Services, State enforcement results regarding Medicaid fraud cases have been disappointing. Virtually every state in the country has a State Medicaid Fraud Control Unit whose principle job is to uncover and detect fraud and to prosecute the offenders. Such units are also tasked with the responsibility of attempting to recover monies fraudulently obtained from the Medicaid program. Because Medicaid is approximately twenty (20%) percent of the total federal
(more…)

Latest IRAQ FRAUD Report by Special Inspector General for Iraq Reconstruction

February 2, 2007
Michael Sullivan

We saw yesterday’s quarterly audit report on Iraq fraud, published by the Special Inspector General for Iraq Reconstruction (SIGIR), Stuart Bowen Jr. The message is sobering:

“The security situation in Iraq continues to deteriorate, hindering progress in all reconstruction sectors and threatening the overall reconstruction effort,” in the words of the Inspector General.

We all have already seen reports of how the United States is being exploited by dishonest and incompetent contractors in Iraq. This IG Report discusses not only poor security, but also
(more…)

Government Joins Whistleblower Case Against Pharmaceutical Firm for Overcharging on Generic Drugs

February 1, 2007
Michael Sullivan

We saw another significant whistleblower case against a drug company hit the news wire this week.

The government announced that it was joining a qui tam lawsuit under the False Claims Act against the company Boehringer Ingelheim Roxane, Inc. The Complaint alleges overcharging on pharmaceutical products.

In joining this lawsuit, the United States has alleged that the drug company engaged in a “scheme to report fraudulent and inflated prices for several pharmaceutical products, knowing that federal health care programs established reimbursement rates based on those reported prices.”

We have reprinted the government’s announcement of why it is joining this qui tam whistleblower lawsuit below (from the U.S. Department of Justice press release):

+++++++++++++++++++++++++++++++++++++++++++++++++++++++
(more…)

Progress with the New IRS Rewards Program for Tax Whistleblower Cases

January 31, 2007
Michael Sullivan

We have been working with the IRS to bring information about large tax cheating to the IRS’s attention, so that clients can participate in the new IRS Whistleblower rewards. The IRS officials sound excited to have this new tool at their disposal, and we are happy to help our whistleblower clients obtain the new rewards. Our latest one deals with fraud in the Hurricane Katrina relief effort, where the public and government have been cheated out of what appears to be many millions of
(more…)

Hurricane Katrina Fraud: The Government’s Inspectors General Continue to Investigate Fraud and Whistleblower Reports

January 26, 2007
Michael Sullivan

We all remember how Hurricane Katrina and Hurricane Rita left the Gulf Coast devastated. As government agencies began to provide disaster relief with public dollars, dishonest contractors saw a huge opportunity for fraud against the government. Too many FEMA contracts have been the targets of dishonest contractors.

The “watchdogs” of the federal government agencies–the various Inspectors General of the many agencies involved in Katrina relief–have combined their efforts and sent hundreds of auditors to the Gulf region to examine fraud and mismanagement of Katrina

(more…)

New IRS Whistleblower Rewards Statute

January 26, 2007
Michael Sullivan

We hear from many lawyers and clients that they are not aware of the new IRS Whistleblower Rewards Program. The new provisions took effect on December 20, 2006, and yet so far they are locate on the web.

We hope it is helpful to you to find the new IRS Whistleblower Rewards amendments here, in the amended version of the statute:

26 U.S.C. § 7623.

(a) In general.–The Secretary, under regulations prescribed by the Secretary, is authorized to pay such sums as he deems necessary for–

(1) detecting underpayments of tax, or
(2) detecting and bringing to trial and punishment persons guilty of violating the internal revenue laws or conniving at the same,

in cases where such expenses are not otherwise provided for by law. Any amount payable under the preceding sentence shall be paid from the proceeds of amounts collected by reason of the information provided, and any amount so collected shall be available for such payments.
(more…)

Why States Are Passing Their Own Qui Tam Whistleblower Laws

January 24, 2007
Michael Sullivan

I looked into the experiences that states have had with their own False Claims Acts, because almost every state is considering passing its own. I have tried to provide a brief summary that I hope is useful to you.

To encourage states to enact their own False Claims statutes with qui tam whistleblower provisions that are at least as effective as the federal Act, Congress created a large financial incentive when it passed the Deficit Reduction Act of 2005. States that have or enact such acts become eligible as of January 1, 2007, for a 10% increase in the state’s share of Medicaid fraud recoveries.

Many states, therefore, will consider whether to follow suit by enacting their own False Claims Act as early as 2007. Thus, it is important to consider other states’ experiences with their own state statutes governing false claims.

Most qui tam cases filed under the state statutes have been related to health care. Many are “global” Medicaid cases that were first developed in federal courts as Medicare and Medicaid fraud cases and that concerned a nationwide fraud which had been investigated by multiple federal and state jurisdictions.

Texas recovered $45.5 million in 2004 from pharmaceutical companies based on their allegedly overstating the price of prescription brand-name and generic-brand drugs. The Texas Attorney General stated that neither the lawsuit nor the settlement would have been possible had the state not enacted a qui tam provision.

(more…)

Search

Topics

Our Other Blog

Amendments to New IRS Whistleblower Law Considered

April 5, 2007
Michael Sullivan

We have had many calls this week from potential clients in our IRS Whistleblower practice, probably because msn.com featured an article about the IRS Whistleblower program on Monday that linked to our whistleblower lawyer blog.

As I have explained to many whistleblower clients, the new regulations for the IRS Whistleblower Rewards Program are in the works, but have not been issued. We have been pursuing IRS Whistleblower claims under the new program and have found the IRS agents to be excited about it.

Adding to the mix for those seeking a whistleblower attorney is that Congress is considering amendments to the law that established the new IRS Whistleblower Program in December 2006. Among the possible changes/additions are a provision opening up the Whistleblower Program to more claims by setting a different threshold for the amount of money in question, which could allow more whistleblowers to qualify for a reward.

Another provision would appropriate funds for the IRS Whistleblower Office, some of which might help defray expenses incurred by the whistleblower’s legal representative. Yet another provision addresses the confidentialty of whistleblowers in Tax Court proceedings.

These proposed changes are part of HB 2, the “minimum wage” bill, which passed the Senate in February.

We will continue to keep up with any developments affecting the IRS Whistleblower Program, which we believe promises to be a great success. If you have any questions about the IRS Whistleblower program, feel free to email me here.

The current section of the proposed HB 2 that applies to the IRS Whistleblower Program is below:
(more…)

Guilty Plea in Pharmaceutical Fraud Case

April 4, 2007
Michael Sullivan

A subsidiary of the drug manufacturer Pfizer has agreed to plead guilty in a kickback scheme and to pay a criminal fine of $19.68 million, according to the U.S. Attorney for the District of Massachusetts, Michael J. Sullivan (not to be confused with Michael A. Sullivan, one of the authors of this whistleblower lawyer blog).

The government’s announcement was that Pharmacia & Upjohn Company, Inc., a subsidiary of Pfizer, Inc., was charged with offering a kickback in connection with the administration and distribution
(more…)

New York Becomes Latest State to Agree to Enact a State False Claims Act

April 3, 2007
Michael Sullivan

The New York legislature has become the latest state to agree to the enactment of a State False Claims Act, when it approved passage of such a whistleblower law as part of approving the state budget. The Buffalo Times reported on this encouraging development.

We have written before about why states are passing their own whistleblower laws to protect taxpayer money. Congress has created significant financial incentives for states that pass their own state false claims acts, with whistleblower provisions that are at
(more…)

New Medicaid Whistleblower Law Passes House in Georgia

March 27, 2007
Michael Sullivan

We have been writing about why states are passing their own whistleblower laws, with qui tam provisions that are at least as effective as the federal False Claims Act. Georgia’s legislature took a giant step forward when its House of Representatives today passed the State False Medicaid Claims Act–by an overwhelming margin of 164-2!

As we have mentioned before on this whistleblower lawyer blog, when the House Judiciary Committee met to discuss and approve the new whistleblower statute, two witnesses were invited
(more…)

Whistleblower Laws of Two More States–Hawaii and Virginia–Are Approved by Feds

March 21, 2007
Michael Sullivan

States are figuring out how to pass whistleblower laws with effective “qui tam” provisions, so that they qualify to receive more money from Medicaid fraud settlements. The Office of Inspector General of the Department of Health and Human Services has announced that, unlike 7 of the 10 state whistleblower laws that OIG had previously reviewed, the whistleblower laws of Hawaii and Virginia pass muster under the Deficit Reduction Act of 2005.

We have previously discussed why states are passing or improving their own
(more…)

Whistleblower Law Sponsor Testifies About Iraq Contractor Fraud

March 20, 2007
Michael Sullivan

Whistleblowers and whistleblower attorneys may consider Senator Charles Grassley of Iowa as the “patron saint” of protecting taxpayer money from fraud against the government. Sen. Grassley continues his great work as he testifies today before the Senate Judiciary Committee about Iraq contractor profiteering and fraud.

The Senator already claimed another recent victory by spearheading passage of the new IRS Whistleblower Rewards Program. Sen. Grassley saw how cost-effective the False Claims Act has been in recovering more than $20 billion for the government–largely because of the
(more…)

New State Qui Tam Whistleblower Law Is Approved by House Judiciary Committee in Georgia

March 15, 2007
Michael Sullivan

This afternoon I had the privilege of joining the Inspector General of Georgia’s Department of Community Health, Doug Colburn, in serving as the two invited witnesses who were asked to explain how the new “State False Medicaid Claims Act” would work, in testimony before the full Judiciary Committee of the Georgia House of Representatives.

The new whistleblower law was approved unanimously by the Judiciary Committee, and is gaining steam toward passage.

Chairman Wendell Willard expressed his strong support for encouraging whistleblowers to report wrongdoing. The
(more…)

IRS Whistleblower Rewards Featured in Smart Money Magazine

March 15, 2007
Michael Sullivan

The new IRS Whistleblower Rewards Program that we have been discussing is featured in the March 13 issue of Smart Money Magazine–and Smart Money cites our Whistleblower blog and quotes one of our authors.

The Smart Money reporter, Lisa Scherzer, contacted our firm, Finch McCranie, LLP, to discuss the IRS Whistleblower Rewards program and our experiences in representing clients in the IRS Whistleblower program. We commented that most potential whistleblowers who have contacted us are ethical, conscientious persons who are troubled
(more…)

New “Whistleblower Protection Enhancement Act” Passes U.S. House

March 14, 2007
Michael Sullivan

We were excited to see that the U.S. House of Representatives today passed an important new whistleblower protection law, the Whistleblower Protection Enhancement Act.

We have discussed this new whistleblower bill previously, as an encouraging development for whistleblowers and whistleblower lawyers. The new whistleblower law would protect federal employees and, now, also federal contractors, who report evidence of fraud, waste, abuse, gross mismanagement, or “substantial and specific danger to public health or safety.”

Rep. Henry Waxman sponsored the new whistleblower protection bill, but Rep. Bruce Braley of Iowa also spoke eloquently today about why American taxpayers–and the American public’s security–demand that honest citizens must be able to bring to light evidence of fraud, waste, and abuse that affects government dollars (which are taxpayer dollars).

Home with a bug today, I was able to watch the debate on C-Span. The bill passed the House by a vote of 331-94, with 8 members not voting. Let’s hope the Senate also acts responsibly by approving the bill.

Rep. Braley was inspiring in his remarks about the courage and contributions of important whistleblowers such as former FBI Agent Colleen M. Rowley, whose comments in speaking out after 9/11 are worth remembering and repeating below:

* * * * * * * * * * * *
(more…)

New State False Medicaid Claims Act (with Qui Tam Whistleblower Provisions) Is Approved by Georgia Legislative Subcommittee

March 13, 2007
Michael Sullivan

Whistleblowerlawyerblog Author Testifies In Support of Georgia Department of Community Health’s “State False Medicaid Claims Act”

This morning, a new state False Claims Act cleared a hurdle as it was approved by a Georgia legislative subcommittee.

Georgia’s new “State False Medicaid Claims Act,” which has qui tam whistleblower provisions similar to the federal False Claims Act, received unanimous support among members of the subcommittee of the House Judiciary Committee chaired by Rep. Edward Lindsey of Atlanta.

Testifying in support of the new
(more…)