Articles Posted in Whistleblower Rights

The False Claims Act protects whistleblowers in cases where the government has been defrauded, but what happens when fraud is committed against individual investors? The Dodd-Frank Wall Street Reform and Consumer Act is the answer. The SEC implemented the act in 2010 to protect investors and maintain a fair market. There is also a section that protects whistleblowers who seek to expose their employers unlawful conduct.

The Dodd-Frank Act

Hedge funds developed in response to a desire for investors to get a high return through high quality trading strategies. Investors contribute money and the manager takes a 1-2% management fee and 20% of the fund’s profits. Hedge funds in the United States were historically privately owned and run, and exempt from federal securities regulation giving them substantial freedom in their activities. These funds made careful calculations in their business models to ensure they could operate outside of these regulations. Many see these funds as an exclusive club for America’s wealthiest, and enables them to profit more than the average investor. There is also fear that hedge funds mislead their investors by guaranteeing easy monetary gain, and conduct fraudulent activity behind closed doors. The recent surge in hedge fund activity since the 1980s has caused the Securities Exchange Commission (SEC) to try to regulate them. There actions have been moderately successful.

Our healthcare system is charged with providing care to those in need of medical assistance – but far too often we find cases of healthcare administrators and doctors participating in widespread schemes to bilk money out of the federal government and the Medicare/Medicaid system. If you have information pertaining to any such scheme involving Medicare or Medicaid fraud, contact an attorney from Altman & Altman LLP right away to help you become a whistleblower, as it could mean a significant financial reward if your information leads to the uncovering of fraudulent behavior.

Medicare fraud can occur anywhere

As long as there exists a financial incentive for doctors and healthcare administrators to fraudulently charge for services they never rendered, or falsely inflate the cost of services to receive more money from the government, Medicare and Medicaid fraud will unfortunately continue to happen.

Recently, the U.S. Department of Justice announced that Laboratory Boston Heart Diagnostics Corporation of Framingham agreed to pay a settlement of nearly $27 million in response to allegations that they improperly billed the Medicare, Medicaid and TRICARE programs for lab tests. Those overbillings were then kicked back to doctors disguised as “investment returns,” per reports.

The report goes further, documenting a comprehensive scheme in which the company provided testing services to smaller hospitals from Texas on a pay-per-test basis, and then worked with those hospitals’ marketing agents to pay doctors who referred certain lab tests to be conducted. Essentially, the company allegedly and illicitly paid doctors to recommend specific tests, which the company could then bill the federal government for. The company also allegedly was involved in submitting outpatient claims on patients who were not hospital outpatients – which is known as false billing.

Boston Heart Diagnostics is not the only Massachusetts company to get caught in such a scheme. In 2010, the Woburn-based Calloway Laboratories Inc. was indicted on 42 counts of Medicaid fraud, which included sending kickbacks and accruing over $10 million in funds from the state Medicaid program MassHealth to obtain drug screening business for itself.

Whistleblowing is an essential tool to root out this corruption

Under the False Claims Act, whistleblowers can expose persons and companies that defraud the federal government – or federal programs run by the government, such as Medicare and Medicaid. This is called a qui tam action.

Whistleblowing – the act of alerting federal authorities to schemes in which individuals or companies are actively defrauding the government – is a protected act that can result in large financial rewards if a whistleblower’s report results in a successful case or settlement against the entity that is accused. According to the National Whistleblower Center:

“Under Section 3730(h) of the False Claims Act, any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the Act is entitled to all relief necessary to make the employee whole. Such relief may include:

  • Reinstatement
  • Double back pay
  • Compensation for any special damages including litigation costs and reasonable attorneys’ fees.”

In the case of the recent settlement with Boston Heart Diagnostics of Framingham, the whistleblowers who led to the uncovering of the illicit activity will receive approximately $4.36 million of that settlement money. Under the False Claims Act, successful whistleblowers are entitled to receive between 15 and 30 percent of the total money recovered. Continue reading

Being a whistleblower is a noble decision that also puts you at great personal risk. There is a possibility of being fired from your job or even threatened with violence if you make your intentions to blow the whistle on a criminal act known. Further, reporting illicit activity requires strong legal evidence, otherwise you may risk penalties for your efforts. No matter the case, consulting with an experienced white-collar criminal expert at the Cambridge firm of Altman & Altman LLP is essential to success.

What protections exist for whistleblowers?

Under the Dodd-Frank Act, whistleblowers who provide otherwise unknown, valuable information to the Securities Exchange Commission (SEC) that results in monetary sanctions exceeding $1 million are not only eligible for a percentage of that sanction as a reward, they are also given ironclad protection against retaliation by their employer or organization. Whistleblowers will even be granted a private cause of action if they are discharged or unfairly discriminated against by their employer as a result.

Due to a unanimous Supreme Court ruling in February of 2018, however, these whistleblower protections under the Dodd-Frank Act – which was passed after the financial crisis of 2008 and were finally implemented in 2011 – now only apply to individuals who report financially criminal issues to the United States SEC, and not if they only try to blow the whistle within the ranks of their own company or organization.

What this means is that a whistleblower will no longer be protected under Dodd-Frank unless they go through the process with the SEC’s program. Reporting through another federal agency, such as the IRS, will not net the same protections – although the IRS has its own rules regarding protection of whistleblowers, including potential payment for successful claims, they do not share similar protections as Dodd-Frank.

However, this does not mean whistleblowers are denied protections under the federal government entirely. An older law, the 2002 Sarbanes-Oxley Act, provides certain protections but also nets significantly less money than those pursuing whistleblowing under Dodd-Frank. While Sarbanes-Oxley protects whistleblowers of publicly-traded companies, its statute of limitations following the retaliation is 90 to 180 days – significantly less than the six years allotted to Dodd-Frank whistleblowers. Continue reading

A whistleblower is someone who exposes information about an illegal or unethical activity against the government or a private entity. When the activity is being committed against the U.S. government, the whistleblower may bring what is known as a qui tam lawsuit under the False Claims Act, which rewards whistleblowers when funds lost to fraud are recovered as a result of the information provided.

If you are aware of fraudulent activity against the government, you may be able to help stop the fraud and reap immense financial benefits. Fraud against the government doesn’t only hurt the government. For example, Medicare and Medicaid fraud has negative consequences for recipients of these programs, as well as taxpayers in general. A Boston whistleblower attorney can help you determine how to proceed if you are aware of fraudulent activities being committed against the U.S. government.

Personal and Professional Protections

In addition to being rewarded for their unique information, whistleblowers also receive protections under the False Claims Act. Not surprisingly, blowing the whistle on a large corporate entity can have personal and professional consequences, especially if that entity happens to be the whistleblower’s employer. Even so, it is a courageous, important act to expose fraud that could put the lives of patients, soldiers and the general public in grave danger. As such, whistleblowers are protected from retaliation, among other consequences.

Once you report the fraudulent or illegal activity, the government will begin an investigation of the allegations, from which point it will decide whether to intervene. If the government decides not to get involved with the case, you can continue with your qui tam case. However, such cases have a much better chance of success with the government’s involvement.

Whistleblower Awards May be in the Millions

If the individual or entity is found liable, they may have to pay up to three times the amount of funds lost to the fraudulent activity. The whistleblower is typically awarded between 15 and 25 percent of the recovered funds. Considering that recoveries are often in the tens-of-millions of dollars, 15 to 25 percent can be an extremely large sum of money.

In 2017, whistleblowers filed 669 qui tam suits, according to the Justice Department. Whistleblowers in the U.S. earned more than $392 million in 2017 by helping the government recover $3.4 billion in misappropriated or stolen funds. Below are some of the top whistleblower awards of 2017.

  • Mylan Inc. – $465M settlement
  • Shire Pharmaceuticals LLC – $350M settlement
  • Allied Home Mortgage – $268M verdict
  • eClinicalWorks – $155M settlement
  • Life Care Centers of America Inc. – $145M settlement
  • Bechtel Corp. / URS Energy and Construction Inc. – $125M settlement
  • Agility Public Warehousing Co. – $95M settlement
  • PHH Mortgage – $65M settlement
  • CA Inc. $45M – settlement
  • ADS Inc. $16M – settlement

A MA whistleblower lawyer can help you protect your rights if you are aware of fraudulent, illegal or unethical activity. Continue reading

When admission to a skilled nursing facility is medically necessary, Medicare covers at least a portion of the services, as long as certain requirements are met. For starters, admission to the facility must come on the heels of a covered inpatient hospital stay of at least three days. When a skilled nursing facility bills Medicare for medically unnecessary services, the facility may be guilty of Medicare fraud.

RUG Upcoding

Fraud in skilled nursing facilities most commonly involves something called a Resource Utilization Group (RUG) code. Every patient is assigned a code, which is used to evaluate the patient’s needs. These codes are weighted, and directly impact the per diem paid to the facility by Medicare. When the wrong code is purposely used to obtain higher payment, this is known as RUG upcoding, and it occurs with shocking frequency. Patients are categorized into seven main categories. These are:

  • Behavior problems
  • Clinically complex
  • Extensive services
  • Impaired cognition
  • Reduced physical function
  • Rehabilitation
  • Special care

Each of the above categories is further divided into specific RUG codes. A MA whistleblower attorney can help you determine how to proceed if you have information about RUG upcoding at a skilled nursing facility.

Skilled Care vs. Custodial Care

Care that occurs in a skilled nursing facility “requires the involvement of skilled nursing or rehabilitative staff in order to be given safely and effectively.” Custodial care, on the other hand, is non-medical care, such as assistance with bathing and eating. Skilled care involves physical therapy, intravenous injections, and the like. If the facility bills for skilled care when the patient only needs custodial care, this is Medicare fraud. It can also be fraud if a patient who previously needed skilled care gets better, but the facility continues to provide unnecessary skilled services. If a whistleblower provides information about this type of fraud to the government, the skilled nursing facility may be required to pay back every cent obtained in this manner.

What is a Whistleblower?

A whistleblower is someone who reports illegal or fraudulent activities committed against the U.S. government. To incentivize people to report such activity, whistleblower rewards are often substantial. Take the following scenario, for example. Gretchen works for a skilled nursing facility. She notices that patients are being given RUG codes that are inconsistent with their actual needs. Gretchen reports this activity, and the resulting investigation uncovers millions in Medicare payments received based on fraudulent charges. When those funds are repaid by the facility, Gretchen may receive a reward of up to 25 percent of the total recovered.

The reality is, blowing the whistle can be extremely lucrative. Rewards may be in the hundreds of thousands or millions of dollars. In addition to helping the government agency in question, whistleblowers often protect innocent people. In many cases, fraudulent or illegal activity uses tax payer dollars, and can even harm the safety, health, or well-being of the general public. Whistleblowers are often reticent to report fraud and illegal activity for fear of retaliation. Fortunately, multiple legal protections exist to prevent this type of backlash.

In order to report skilled nursing facility fraud, you must hire an attorney. That attorney will file something known as a False Claims Act qui tam action against the facility. You will then be asked to identify specific examples of Medicare fraud that you witnessed. A Boston whistleblower attorney can help you determine if the information you have warrants a qui tam lawsuit. Continue reading

When all the money and legitimate influence in the world can’t get what you want, some of the world’s less scrupulous – and wealthier – individuals will resort to one tried and true, illegal method that has been ongoing as long as humans have had money: bribery.

Foreign bribery schemes can involve any different type of organization – from construction firms bribing real estate companies to earn building rights to a new development, to medical device companies bribing pharmaceutical companies to sell their products and not their competitors. When these illicit money exchanges change hands across international borders, it becomes a much more serious matter.

These bribery schemes can become massive, such as a global construction bribery network that involved shuffling around $788 million in illegal bribes to executives and foreign diplomats around the world in order to illegally gain an advantage and win business deals. The companies involved are on the hook for about $3.5 billion in penalties.

All acts of foreign bribery are illegal under the Foreign Corrupt Practices Act (FCPA), enforced by the United States Department of Justice.

“Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.”

The Securities Exchange Commission (SEC) may also become involved when any United States business or individual engages in an illegal payment to a foreign official, foreign political party or candidate for political office for the purpose of gaining influence or securing some type of advantage they wouldn’t have without the bribe.

As with other acts of illegal misconduct, foreign bribery whistleblowing programs exist to facilitate the identification and prosecution of criminals who attempt to utilize bribery, and reward the individuals who take the risk to shine a spotlight on their illegal activity.

The SEC may offer as much as a 30 percent award to a whistleblower, through its Whistleblower Act, for actions that lead to the unveiling of a foreign bribery scheme. In the case of a large bribery scandal, like the one mentioned above, this reward could be astronomical for a whistleblower or team of whistleblowers. Continue reading

The Customs and Border Protection Agency (CBP) is stepping up its efforts to identify violations of customs laws, such as anti-dumping and trade tariff evasion. The agency will receive $300 million for the hiring of additional staff, and whistleblowers are being incentivized to come forward with information about fraud and other violations. Considering that whistleblowers can receive up to 30 percent of recovered funds, and that these recoveries can be in the tens of millions, you may stand to receive a substantial payout if you have unique information about such violations.

Multiple customs tariff whistleblower lawsuits have been filed in the past two years. These cases typically involve companies that are attempting to evade duties on imports from other countries. For example, Univar, a global distribution company, was caught masking the origin of saccharine imports from China to avoid high anti-dumping duties. To do so, the company had the product re-packaged and labeled in Taiwan before shipping to its final destination in the U.S.

In other cases, companies may attempt to misrepresent the type of goods to declare them under a classification with a lower duty. A MA whistleblower attorney can help you determine how to move forward if you have information about customs tariff evasion, or similar illegal activity.

Customs Border Patrol Agents Need Help

Whistleblowers actually play a significant role in preventing fraud and evasion of import and export duties. Massive ships with hundreds of shipping containers on board come into the United States every day. Customs agents conduct inspections, but they can’t inspect every container on every ship, train, and truck. Even less so now that a major portion of their time is dedicated to fighting drug trafficking and terrorism. In fact, Customs and Border Patrol agents are expected to inspect less than two percent of the more than 20,000 containers slated for entry into the U.S. this year alone.

Federal False Claims Act Protections

The federal False Claims Act protects whistleblowers and encourages these “original sources” to report fraud and other illegal activity by filing a claim. These claims are also referred to as qui tam lawsuits. The Whistleblower Protection Program ensures that people who disclose allegations of certain activities are protected from retaliation. According to the Act, whistleblowers who report the following violations are protected:

  • Violations of laws, rules, or regulations
  • Any type of mismanagement
  • The wasting of funds
  • The abuse of authority
  • A serious danger to public safety or health

The Importance of Whistleblowers

Thanks to whistleblowers, the federal government has been made aware of countless activities that could have a negative impact on the safety and health of the general public. Whistleblowers can be financially rewarded for reporting illegal activity in many industries, including pharmaceutical sales, defense, education, and finance, among others. A Boston whistleblower lawyer can help you file a qui tam lawsuit if you are aware of fraudulent or illegal activity in any of these industries. Continue reading

Whistleblowing protections are cut and dry. If you see something illegal occurring and you report it to any type of authority – whether it’s to local law enforcement or a federal anti-fraud organization – and you are threatened, reprimanded, fired or punished in any way by your employer as a result, then you have been wronged, and are eligible to file suit against the offending party.

Protections exist for whistleblowers because, were they not in place, those who witness or are aware of criminal behavior would have no incentive to report these actions, and would have no protection from retaliation against them if they chose to do the right thing anyways.

Any individual can blow the whistle on any type of illegal behavior, whether it’s on a massive scale or a micro scale. No matter how big the crime, or the number of victims, the same protections apply.

The United States’ biggest whistleblowing protection agencies are housed within the Internal Revenue Service (IRS), and the Securities Exchange Commission (SEC). The IRS provides protection for those who blow the whistle on crimes involving tax fraud, while the SEC protects whistleblowers who report acts of fraudulent securities practices, such as insider stock trading and malicious stock practices.

Not only is it the right thing to do…

Providing information that leads to a successful investigation and, in most cases, criminals winding up in custody, is not only the right thing to do morally – it can also be incredibly lucrative for the whistleblower.

Since 2007, the IRS Whistleblower Office has helped the IRS collect $3.4 billion in may otherwise have been totally lost revenue due to tax fraud and other illicit tax activity. In turn, the IRS has awarded over $465 million in rewards to whistleblowers who helped them collect this revenue. Similarly, the SEC has awarded over $111 million in whistleblowing rewards since their program began in 2011.

To be rewarded for whistleblowing, you simply have to provide credible, accurate information that aids investigators in rooting out a criminal activity. There are stipulations and conditions for each the IRS and the SEC whistleblowing programs, which you can learn more about HERE and HERE.

Providing protections helps ensure whistleblowers are comfortable reporting illicit actions, but providing monetary awards actually incentivizes whistleblowers to speak up when they have proof of criminal activity. Continue reading

Addiction to opioid pain killers has reached epidemic proportions in recent years. Many blame the problem on pharmaceutical companies and doctors who are too quick to prescribe these highly-addictive drugs. Recent news may uphold this belief.

On Thursday, Attorney General Jeff Sessions announced that more than 400 individuals are facing criminal charges for their involvement in fraud and opioid scams totaling $1.3 billion. Sessions called it the “largest health care fraud takedown operation in American history.” He went on to say that this level of fraud shows that certain healthcare professionals “have chosen to violate their oaths and put greed ahead of their patients.”

Strips Clubs for Prescriptions

In one particular scam, six Michigan doctors allegedly wrote unnecessary prescriptions for opioids. If that isn’t disturbing enough, a rehab facility in Florida is accused of using gift cards, casino trips and visits to strip clubs to entice addicts to move to Palm Beach, resulting in about $58 million in fraudulent treatments. A Boston whistleblower attorney can help you determine how to proceed if you have unique information about healthcare fraud.

Of the 400 charged, at least 120 were involved in the illegal prescription and distribution of opioids – the same opioids that killed more than 52,000 Americans in 2015. And fatalities continue to rise. “In some cases, we had addicts packed into standing-room-only waiting rooms waiting for these prescriptions,” said Andrew McCabe, acting FBI director. “They are a death sentence, plain and simple.”

Those charged are facing criminal penalties stemming from allegations that they illegally billed Medicare and Medicaid for drugs that, in some cases, were never even purchased. In other cases, drugs were given to patients unnecessarily so that doctors and clinics could benefit financially. “They seem oblivious to the disastrous consequences of their greed. Their actions not only enrich themselves, often at the expense of taxpayers, but also feed addictions and cause addictions to start,” said Sessions. And the attorney general believes many more cases will come out of this.

United States Leads the World in Opioid Prescriptions

According to Chuck Rosenberg, acting administrator of the Drug Enforcement Administration, four out of five new heroin addicts started with opioids. The United States prescribes more opioids than any other country, by a long shot. “In West Virginia, one firefighter revived the same young lady three times in one day. That’s a system that is failing that individual,” said Health and Human Services Secretary Tom Price. States with high rates of addiction cases, however, fear that healthcare legislation to combat this problem would result in Medicaid cuts, worsening the problem for addicts who are covered by the program.

Blow the Whistle

A whistleblower is someone who exposes illegal, unethical, or fraudulent activity within an organization, company, or government entity. The federal government encourages whistleblowers to come forward with this information. So much so, in fact, that whistleblowers may receive up to 30 percent of funds recovered through such a process. Considering that recoveries are often in the tens of millions, whistleblower payouts can be quite substantial. The federal government also protects whistleblowers from retaliation through the Whistleblower Protection Act. A MA whistleblower attorney can help you understand your rights and options if you have unique information about healthcare fraud. Continue reading

The Customs and Border Protection Agency (CBP) is stepping up its efforts to identify violations of customs laws, such as anti-dumping and trade tariff evasion. The agency will receive $300 million for the hiring of additional staff, and whistleblowers are being incentivized to come forward with information about fraud and other violations. Considering that whistleblowers can receive up to 30 percent of recovered funds, and that these recoveries can be in the tens of millions, you may stand to receive a substantial payout if you have unique information about such violations.

Multiple customs tariff whistleblower lawsuits have been filed in the past two years. These cases typically involve companies that are attempting to evade duties on imports from other countries. For example, Univar, a global distribution company, was caught masking the origin of saccharine imports from China to avoid high anti-dumping duties. To do so, the company had the product re-packaged and labeled in Taiwan before shipping to its final destination in the U.S.

In other cases, companies may attempt to misrepresent the type of goods to declare them under a classification with a lower duty. A MA whistleblower attorney can help you determine how to move forward if you have information about customs tariff evasion, or similar illegal activity.

Customs Border Patrol Agents Need Help

Whistleblowers actually play a significant role in preventing fraud and evasion of import and export duties. Massive ships with hundreds of shipping containers on board come into the United States every day. Customs agents conduct inspections, but they can’t inspect every container on every ship, train, and truck. Even less so now that a major portion of their time is dedicated to fighting drug trafficking and terrorism. In fact, Customs and Border Patrol agents are expected to inspect less than two percent of the more than 20,000 containers slated for entry into the U.S. this year alone.

Federal False Claims Act Protections

The federal False Claims Act protects whistleblowers and encourages these “original sources” to report fraud and other illegal activity by filing a claim. These claims are also referred to as qui tam lawsuits. The Whistleblower Protection Program ensures that people who disclose allegations of certain activities are protected from retaliation. According to the Act, whistleblowers who report the following violations are protected:

  • Violations of laws, rules, or regulations
  • Any type of mismanagement
  • The wasting of funds
  • The abuse of authority
  • A serious danger to public safety or health

The Importance of Whistleblowers

Thanks to whistleblowers, the federal government has been made aware of countless activities that could have a negative impact on the safety and health of the general public. Whistleblowers can be financially rewarded for reporting illegal activity in many industries, including pharmaceutical sales, defense, education, and finance, among others. A Boston whistleblower lawyer can help you file a qui tam lawsuit if you are aware of fraudulent or illegal activity in any of these industries. Continue reading

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