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Qui Tam (Whistleblower) Litigation

False Claims Act

Our attorneys are nationally recognized for their work with whistleblowers in cases filed under the federal and state False Claims Acts. We have recovered approximately a half-billion dollars in qui tam cases, making our track-record unparalleled locally and nationwide, where our cases consistently rank at the top of their class.

Under the federal False Claims Act (31 U.S.C. §§ 3729 et seq), any individual or entity who submits, or causes another person or entity to submit, false claims for payment of government funds is liable for three times the amount of damages sustained by the government, plus civil penalties of $5,500 to $11,000 per claim. Many states throughout the country have similar statutes.

The federal False Claims Act contains whistleblower or “qui tam” provisions, which allow a private individual (a “Relator”) with knowledge of past or present fraud on public monies to sue on behalf of the government to recover damages and penalties. If the lawsuit is successful, it not only stops the fraudulent conduct, but also deters similar conduct by others. A successful Relator may receive a substantial share of the government’s recovery – as much as 30 percent of the total amount recovered.

Though much of the fraud takes place in government programs in the healthcare sector, such as Medicare and Medicaid, fraud is not exclusive to healthcare. Numerous other government programs, such as transportation, housing, defense, and education, are also affected by fraud. When in doubt as to whether conduct is actionable under the FCA or a similar statute, a person with suspicion or knowledge of fraud should consult us.

Examples of the type of conduct that is considered “fraudulent” under the False Claim Act include:

  • A small business falsely certifying that it is a “minority-owned” or “service disabled” small business in order to receive government contracts, when in fact is it not owned or operated by a minority or service disabled veteran.
  • A physician billing Medicare or Medicaid for medical procedures that were not performed.
  • A physician or lab billing for services that are not medically necessary.
  • Bundling arrangements where a pharmaceutical or medical device company conditions discounts for one product on the purchase of another product, but fails to report the bundle to appropriate entities.
  • A pharmaceutical or medical device company failing to disclose adverse events in applications with the FDA.
  • Securing referrals for services or products reimbursed by government programs through the payment of kickbacks (in cash or in kind).
  • A physician referring services to companies in which that physician has a financial interest.
  • A government contractor stating that it has complied with certain government-imposed safety mandates or specifications when supplying machinery for military or other government use, when in fact it has not;
  • A pharmaceutical company engaging in “off-label” marketing by encouraging physicians to prescribe drugs for usages which have not been approved by the Food and Drug Administration.
  • Under-serving patients in managed care programs while receiving funds to properly serve.
  • Under-serving people with disabilities while receiving funds to properly serve.
  • Waiving deductibles or co-pays as a means to steer patients
  • Sham joint ventures which disguise payments for referrals.

In sum, fraud against government programs can take many forms. When in doubt as to whether conduct constitutes actionable fraud, a confidential consultation with our attorneys is highly recommended.

SEC and CFTC

The federal government has promulgated numerous regulations to protect our market economy and ensure that securities and commodities are traded in a fair and open manner. Enforcement of these regulations is very important to protect a free market. Unfortunately, some entities violate these regulations with the hope of gaining an unfair advantage in the marketplace. For these reasons, the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) has been fighting market manipulation since its inception.

Through the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"), the SEC and CFTC have enlisted the assistance of private sector whistleblowers in their enforcement efforts. Dodd Frank established the SEC and CFTC whistleblower programs that went into effect on August 12 and 15, 2011, respectively.

Through Dodd-Frank, an individual with inside knowledge of securities or commodities fraud is incentivized to report it to the SEC and/or CFTC. After reporting the fraud, the SEC and/or CFTC investigate the allegations, and, if that inquiry results in a recovery for the government, then the SEC and/or CFTC pay a monetary award to that whistleblower. In addition, Dodd-Frank provides protection to eligible whistleblowers from retaliation by their employer for reporting the fraud to these enforcement agencies.

Actionable violations can include, but are not limited to:

  • Insider trading
  • Market manipulation
  • Fraud in connection with public offerings/takeovers
  • Fraud in connection with dealings with customers
  • Accounting fraud
  • Foreign bribery
  • Fraud and manipulation in connection with swaps or contracts of sale of commodities.
  • Fraud and manipulation in connection with swaps or contracts for future delivery of commodities..

Financial fraud in the securities and commodities markets can take many forms. When in doubt as to whether conduct constitutes actionable fraud, a confidential consultation with our attorneys is highly recommended.

IRS

Everyone knows that taxes must be paid. However, some entities avoid those obligations by making misrepresentations or lying to the IRS.

The Internal Revenue Service (IRS) has been fighting tax avoidance and tax frauds since the passage of the Tax Code. Recently, it has enlisted the private sector whistleblowers in its enforcement efforts.

The IRS Whistleblower Office, which was established by the Tax Relief and Health Care Act of 2006, has a whistleblower rewards program to incentivize the public to get involved in the fight against tax fraud. Under that program, an individual with knowledge that an entity is committing tax fraud has the ability to file a whistleblower claim to bring the fraud to the attention of IRS investigators. The IRS then confidentially investigates the fraud. If the IRS recovers fraudulently withheld taxes, the IRS is then required to provide the whistleblower with a monetary reward between 15 and 30 percent of the total proceeds collected by the IRS.

In addition, various state tax departments provide similar incentives for fraud under state tax codes.

Tax fraud includes, but is not limited to:

  • Tax Shelters that violate the Sham Transaction Doctrine, the Economic Substance Doctrine and/or the Business Purpose Doctrine.
  • Hiding or omitting taxable income.
  • Misidentifying personal expenses as business costs.
  • Misrepresenting the size of deductions, such as charitable donations.

Tax fraud can take many forms. When in doubt as to whether conduct constitutes actionable fraud, a confidential consultation with our attorneys is highly recommended.


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