Whistleblower Protection Blog

Whistleblower Protection Blog

Advocating Whistleblower Rights for over Twenty Years

SEC Whistleblower program has historic year

Posted in Corporate Whistleblowers

On November 17, 2014, the U.S. Securities and Exchange Commission’s Office of the Whistleblower released its 2014 Annual Report to Congress. According to the report, 2014 was a historic year for the SEC Whistleblower program in terms of both the number and dollar amount of whistleblower awards. The SEC issued whistleblower awards to more individuals in 2014 than in all previous years combined.

The SEC whistleblower award program was created to encourage whistleblowers to report securities violations committed by publicly traded companies.  When a whistleblower tip is filed with the SEC and leads to successful enforcement action netting penalties of at least US$1 million the whistleblower who filed the tip can be awarded between 10 per cent and 30 per cent of money collected by the SEC.

The SEC’s report also revealed that, under its whistleblower award program, it had made payouts to nine people in 2013-14. Continue Reading

Employees Are Very Reluctant to Report Fraud to Federal Law Enforcement

Posted in False Claims / Qui Tam

The Chamber of Commerce has commenced a well-financed and aggressive lobbying campaign to undermine America’s most effective whistleblower law, the False Claims Act. To justify its anti-whistleblower campaign the Chamber published a report entitled, “Fixing the False Claims Act: the Case For Compliance-Focused Reforms.” The purpose of this blog series is to combat the Chamber’s misinformation, and explain why the False Claims Act must be protected.

Whistleblowers and their supporters are strongly urged to read this blog series and share it with friends. In addition, an Action Alert has been issued by the National Whistleblower Center so members of the public inform their representatives that the False Claims Act should not be “reformed” as proposed by the Chamber.

Fact Number 4:

Below are the actual reporting characteristics of all employees’ reporting behavior in the U.S.

Initial Behavior of Employees Who Report Fraud

* Based on the statistics reported in “Inside the Mind of a Whistleblower” Report by the Ethics Resource Center (2012).  Continue Reading

Tax Whistleblowers Alert: Protecting Tax Whistleblower Rights If You Get a Denial Letter

Posted in Tax Whistleblowers

The National Whistleblower Center’s (NWC) Senior Policy Advisor – Dean Zerbe and his law firm ZFF&J – were recently in Tax Court as the first lawyers to litigate in a hearing whether a whistleblower meets the three-part test of the IRS whistleblower award program. In brief, the three-part test is: 1) the whistleblower provided information to the government; 2) the IRS acted on that information; and, 3) the IRS action resulted in collected proceeds.

While the case remains under seal, the whistleblower was able to show that the IRS denial letter was issued in error and that the whistleblower met the three-part test – in spades. Finally having their day in Tax Court to have the facts brought forward was in of itself a victory for the whistleblower. Continue Reading

Whistleblowers Are Key to the DOJ’s Ability to Protect the Taxpayers from Fraud

Posted in False Claims / Qui Tam

The Chamber of Commerce has commenced a well-financed and aggressive lobbying campaign to undermine America’s most effective whistleblower law, the False Claims Act. To justify its anti-whistleblower campaign the Chamber published a report entitled, “Fixing the False Claims Act: the Case For Compliance-Focused Reforms.” The purpose of this blog series is to combat the Chamber’s misinformation, and explain why the False Claims Act must be protected.

Whistleblowers and their supporters are strongly urged to read this blog series and share it with friends. In addition, an Action Alert has been issued by the National Whistleblower Center so members of the public inform their representatives that the False Claims Act should not be “reformed” as proposed by the Chamber.

Fact Number 3:

The need to protect the False Claims Act from hostile “reforms” was best stated in a bipartisan report issued on September 25, 2008, by the U.S. Senate Committee on the Judiciary.  After studying the FCA, the Judiciary Committee endorsed none of the “reforms” urged by the Chamber of Commerce.  Instead, the Committee recommended expanding its scope.  Continue Reading

Supreme Court Hears Arguments in TSA Whistleblower Case

Posted in Government Whistleblowers, National Security
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Yesterday the Supreme Court heard oral arguments in Department of Homeland Security v. MacLean.  This case arises under the Whistleblower Protection Act. The Whistleblower Protection Act prohibits individuals in positions of authority from taking a “personnel action” against a government employee when the employee makes a disclosure, which the employee reasonable believes to evidence a “substantial and specific danger to public health and safety, if such disclosure is not specifically prohibited by law.”  The issue before the Court is when a federal statute bars whistleblower from making disclosures that are “specifically prohibited by law,” does this bar also apply to disclosures prohibited by agency regulations?

Continue Reading

“Monetary Incentives Work” without “Negative Side Effects”

Posted in False Claims / Qui Tam

The Chamber of Commerce has commenced a well-financed and aggressive lobbying campaign to undermine America’s most effective whistleblower law, the False Claims Act. To justify its anti-whistleblower campaign the Chamber published a report entitled, “Fixing the False Claims Act: the Case For Compliance-Focused Reforms.” The purpose of this blog series is to combat the Chamber’s misinformation, and explain why the False Claims Act must be protected.

Whistleblowers and their supporters are strongly urged to read this blog series and share it with friends. In addition, an Action Alert has been issued by the National Whistleblower Center so members of the public inform their representatives that the False Claims Act should not be “reformed” as proposed by the Chamber.

Fact Number 2:

The University of Chicago Booth School of Economics conducted the most comprehensive and objective study of whether the False Claims Act works.  Their study was designed to “identify the most effective mechanisms for detecting corporate fraud” and was based on an “in- depth” study of “all reported fraud cases in large U.S. companies between 1996 and 2004.”  Continue Reading

Senators advise IRS to be more receptive to whistleblowers

Posted in Tax Whistleblowers

In an editorial published yesterday in Politico Magazine, Senators Ron Wyden and Chuck Grassley criticize the IRS whistleblower program. The editorial, “Will the IRS Ever Listen?” states that the backlog on cases is too long and that the IRS needs to better manage its relationships with whistleblowers.  They point out that 799 whistleblower claims made prior to 2007 remain open.

The Senators made reference to IRS Commissioner John Koskinen’s August 2014 Policy statement, stating they hope his “message is just the beginning of real reforms in the way whistleblowers are treated.” But state that while there has been some success with the IRS whistleblower program that they routinely hear complaints from whistleblowers about how the IRS handles their cases. Continue Reading

The False Claims Act Works

Posted in False Claims / Qui Tam

The Chamber of Commerce has commenced a well-financed and aggressive lobbying campaign to undermine America’s most effective whistleblower law, the False Claims Act. To justify its anti-whistleblower campaign the Chamber published a report entitled, “Fixing the False Claims Act: the Case For Compliance-Focused Reforms.” This is the first posts in a series the purpose of which is to combat the Chamber’s misinformation, and explain why the False Claims Act must be protected.

Whistleblowers and their supporters are strongly urged to read this blog series and share it with friends. In addition, an Action Alert has been issued by the National Whistleblower Center so members of the public inform their representatives that the False Claims Act should not be “reformed” as proposed by the Chamber.

Fact Number 1:

As demonstrated in the graph below, the FCA’s reward provisions have worked, causing even the Chamber of Commerce to concede that the FCA is the “most important tool to uncover and punish fraud against the United States.” In the graph (source), the qui tam recoveries (represented in orange) are those exclusively derived from whistleblower FCA disclosures.  The recoveries obtained by the government that are not directly and explicitly tied to whistleblowers are represented in blue, (i.e. the “Non-Qui Tam” recoveries).  As can be seen, the amount of actual recoveries obtained on behalf of the taxpayers from dishonest government contractors has grown significantly over the years, as employees have become aware of the FCA and utilized its qui tam procedures.  Continue Reading

September/October SEC Whistleblower Award List

Posted in News

The SEC Office of the Whistleblower post Notices of Covered Action where a final judgment or order, by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in monetary sanctions exceeding $1 million.Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award.Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list below:  Continue Reading

Whistleblowers Recover $398 Million For U.S. Taxpayers

Posted in False Claims / Qui Tam

The False Claims Act is widely acknowledged as the most important tool for uncovering fraud.  The majority of fraud cases filed by the government are triggered by whistleblower disclosures.  Recent press releases from the Department of Justice report that whistleblowers in five separate cases recovered a total of more than $398 million for U.S. Taxpayers.  These cases were originally brought under the qui tam, or whistleblower, provisions of the False Claims Act. The settlements are listed below:

DaVita to Pay $350 Million to Resolve Allegations of Illegal Kickbacks

DaVita Healthcare Partners, Inc., one of the leading providers of dialysis services in the United States, has agreed to pay $350 million to resolve claims that it violated the False Claims Act by paying kickbacks to induce the referral of patients to its dialysis clinics, the Justice Department announced today. DaVita is headquartered in Denver, Colorado and has dialysis clinics in 46 states and the District of Columbia.

Florida Home Health Care Company and its Owners Agree to Resolve False Claims Act Allegations for $1.65 Million

 A Plus Home Health Care Inc. and its owners, Tracy Nemerofsky and her father, Stephen Nemerofsky, have agreed to pay $1.65 million to the United States to settle allegations that A Plus paid spouses of referring physicians for sham marketing positions in order to induce patient referrals, the Justice Department announced today.  A Plus is a home health care company located in Fort Lauderdale, Florida.  Continue Reading