Articles Tagged with fraud

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whistle  A whistleblower is a person who reports fraud, corruption or other wrongdoing, usually, but not always, at their place of work.  Most states have laws that protect whistleblowers and prohibit employers from firing, demoting or retaliating against whistleblowers.

When a whistleblower sees fraud committed against the government, he or she has the opportunity to become a qui tam whistleblower under the False Claims Act, which is a federal law that encourages whistleblowers to report fraud and thereby receive a reward for their efforts.

We often get the question, “How do I become a whistleblower?”

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A study done by the National Contract Management Association revealed that in 2014, at close to three billion dollars, the Department of Defense accounted for two-thirds of the nation’s corporate contract spending.  This vast amount of money, however, provides ample incentive for dishonest contractors to bilk the government and taxpayers, and potentially put the lives of U.S. military members at risk.  One defense against these unscrupulous fraudsters is the False Claims Act.

During the Civil War, dishonest contractors sold the Union Army decrepit horses, faulty weapons, and rancid food. In response, Congress passed the False Claims Act on March 2, 1863. Abraham Lincoln was President when the False Claims Act was passed and it is sometimes referred to as the “Lincoln Law.”

The False Claims Act permits private individuals to bring lawsuits on behalf of the government for the fraudulent conduct.  The qui tam provision of the False Claims Act provides that the whistleblower who brings the action may share in any recovery by the government.

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On November 8, 2016, the United States Attorney’s Office for the Southern District Florida announced the conviction and sentencing of two defendants in a Medicare Part D fraud case.

What is Medicare Part D?

As most people know, Medicare is a federally funded program that provides free or below-cost healthcare benefits to certain individuals, primarily the elderly, blind, and disabled.  Medicare offers different types of benefits through program “parts.” Part D of Medicare, known as the Medicare Part D program, subsidizes the costs of prescription drugs for Medicare beneficiaries in the United States.

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Book Review: Grisham’s “The Whistler” by Florida Business Attorney Adam Rabin

downloadThe hype is upon us with the release of John Grisham’s new legal thriller, “The Whistler.”   While it feels like yesterday when I was a law student and could not stop turning the pages of “The Firm,” I am particularly excited for Grisham’s new release in a different way.  First, this Grisham novel is set in Florida.  Second, Grisham focuses on one of my firm’s areas of practice: whistleblower law.  Here is how Amazon has summarized the book:

This book may be the “most electrifying novel of the year, a high-stakes thrill ride through the darkest corners of the Sunshine State.”  The book speaks to how our judges are expected to be honest and wise and that their integrity and impartiality are the keys to our judicial system.  The judicial system, however, is shaken when a judge takes a bribe.

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How do you know if you have a Qui Tam Case?

Under the False Claims Act, persons who know about fraud against the federal government can receive a reward for reporting that fraud and helping the Government recover money from the wrongdoer.    We receive many calls from potential whistleblowers who wish to report serious fraud against Government.  Unfortunately, we cannot take every case where fraud exists.   Here is a list of sample questions to help you determine whether you might have a potential False Claims Act qui tam case.

  1. Does your employer do business with the federal or state government?  This would include Government vendors or contractors as well as healthcare companies that receive payment from Medicare or Medicaid.
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If you are considering blowing-the-whistle on government fraud, you are probably wondering what happens once you file a qui tam lawsuit under the False Claims Act. The False Claims Act, 31 U.S.C. § 3729 et seq., contains a very detailed process for bringing a whistleblower case.

Steps involved in a qui tam case

Before the qui tam complaint is filed, the whistleblower (also called the “relator”) must make a “pre-filing disclosure” to the government through his or her attorney.  The pre-filing disclosure contains substantially all of the evidence that is known to the relator about the fraud.  The pre-filing disclosure is not filed with any court and is not available to the defendant.

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The United States is currently at war with the People’s Republic of China – a trade war.  The False Claims Act has an important role to play in this battle.

Every year foreign countries, but most particularly China, engage in a practice of “dumping” goods into the U.S. market.  Generally, this occurs when a foreign country exports goods into the U.S. at a sales price below the producer’s own cost of production.  Often, this takes place because the foreign manufacturer is receiving an unfair subsidy from its own country that makes the U.S. sales price extremely low.   The bottom line is that Chinese manufacturers can sell goods at prices so cheap that it creates an unfair advantage and materially harms U.S. producers of the same goods.

When the government determines that U.S. domestic industries are being materially injured by this type of “dumping,” the government can impose anti-dumping duties or countervailing duties to offset the unfair advantage enjoyed by the foreign manufacturer.  In plain language, this means the importer of these foreign goods must pay an extra fee in order to bring these cheap goods into the United States.   The extra fee is designed to make the foreign goods more expensive so that U.S. industry can remain competitive.

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What is a Violation of the False Claims Act?

Any fraud on a federal government agency could potentially be a violation of the federal False Claims Act.  Not every government fraud involves millions of dollars.  Take, for example, a recent settlement announced by the Department of Justice’s Office of the Inspector General.

According to the DOJ’s press release, Douglas daCosta of Livermore California, a former federal law enforcement agent in the San Francisco field office of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), has agreed to settle allegations that he submitted false claims to the federal government for paid sick leave when he wasn’t sick. Wait. What? An employee got in trouble with the federal government for playing hooky from work?  Yes.

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If you are not part of a low-income family with small children, you may not have heard of the Child Care and Development Fund (CCDF).  Similar to the Medicaid program, CCDF is a joint program between the federal government and the states that provides child care subsidies to eligible low-income families so the parent(s) or legal guardian can work or attend school.

In 2015, under the CCDF program, the federal government paid $5.4 billion and the states contributed a combined $2.2 billion to provide child care to 1.5 million children per month.  Of those monies, Florida received nearly $274 million in federal funding and provided child care subsidies to 213,000 eligible children.

As with any government program, there is a potential for fraud.  A report recently issued by the Department of Health and Human Services, Office of Inspector General estimates that in 2015, $311 million in false claims were submitted to the CCDF program.   The potential for fraud includes false claims made by both clients receiving the subsidies and child care providers.

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Ralph Nader is often credited with coining the modern term “whistleblower” to refer to an employee who reports illegal, unethical or wrongful conduct at his or her place of employment.   At our firm, we have had the privilege to represent many courageous whistleblowers who have had the integrity to stand up and report fraud and abuse against government programs when no one else at their workplaces would do so.  Here are a few of many reasons our country needs more such whistleblowers:

 1.     Fraud is Everywhere.

Politicians often differ on the amount of money that the government should spend.  But regardless of whether you believe in “big government” or “small government,” we all agree the government should not spend money on fraudulent goods and services.  The government loses billions each year to fraud and abuse against federal spending programs such as Medicare, Medicaid and defense contracting.  This hurts everyone (except for the fraudsters of course).