Archive for March, 2015

Bharara Says Whistleblower Awards May Aid Corruption Fight

Wednesday, March 18th, 2015

Speaking at a Fordham University School of Law event on Friday, March 6, U.S. Attorney for the Southern District of New York, Preet Bharara said that whistleblower bounties and leniency agreements could be useful tools for uncovering public corruption. Bharara is the latest law enforcer to endorse the benefits of rewarding tipsters who come forward with information about misconduct.

Bharara noted that other federal statutes, including the False Claims Act and the Dodd-Frank Act, already offer payments to whistleblowers, and the U.S. Department of Justice’s antitrust division runs a “first-in-the-door” leniency program for individuals and companies who are first to approach the government with a confession of participating in criminal antitrust violations. Bharara also noted that the law allows prosecutors some discretion to seek leniency for those who cooperate in other investigations. “If there is some proposal that would not unduly let blameworthy people off the hook but would simultaneously help to bring more blameworthy people in the system, that’s obviously something people should look at carefully because it has worked in other contexts.

Bharara’s comments were not part of any formal proposal, but they echo other calls to ramp up the government’s ability to offer incentives to recruit individuals to come forward with evidence of wrongdoing that might otherwise not makes its way into the government.

On Feb.26, New York Attorney General Eric Schneiderman announced plans for legislation to create a whistleblower rewards and protection program, a program modeled after the U.S. Securities and Exchange Commission program instituted following the Dodd-Frank Act.

In September of last year, U.S. Attorney General Eric Holder called for increasing the rewards available for whistleblower tips made pursuant to the Financial Institutions Reform, Recovery and Enforcement Act. As it stands, the law caps these awards at $1.6 million, markedly smaller than the multibillion-dollar penalties that government has imposed upon big financial institutions under FIRREA.

Whistleblower Protection Caucus Created by Bipartisan Group of Senators

Tuesday, March 17th, 2015

The official founding of a Senate Whistleblower Protection Caucus was announced on February 25, 2015 by Senator Charles Grassley (R-IA). This is a cross-party group of senators created by Senators Chuck Grassley (chairman), Ron Wyden (D-OR) (vice-chairman), Ron Johnson (R-WI), Mark Kirk (R-IL), Deb Fischer (R-NE), Thom Tillis (R-NC), Barbara Boxer (D-CA), Claire McCaskill (D-MO), Tammy Baldwin (D-WI), and Ed Markey (D-MA).

The National Whistleblower Center released a report on just how whistleblowers are essential to protecting the United States from fraud. The report is titled, “Utilizing Whistleblowers in the Fight Against Waste, Fraud and Abuse.” The Executive Director of the National Whistleblower Center, Stephen M. Kohn, stated, “This is an example of bipartisanship which makes our system work.” Furthermore, Kohn said, “The National Whistleblower Center looks forward to working with the Senate Whistleblower Protection Caucus to ensure all whistleblowers obtain meaningful protection.”

2014 Whistleblower Recoveries

Tuesday, March 10th, 2015

In 2014, the total whistleblower recoveries amounted to just shy of $3 billion, $2.2 billion (73 percent) of which were in the health care arena.

When the Department of Justice announces a False Claims Act recovery, they put the total recovery into the headline (the total amount that the fraudster is paying as a result of the FCA action), this includes state Medicaid recoveries and Criminal penalties triggered by FCA investigations.  However, when the DoJ announces their recoveries at the end of the year they leave the state and criminal recoveries off the table.

An example may be seen in the Johnson & Johnson matter announced in November 2013.  The Department of Justice initial press release states that $2.2 billion was recovered in this matter, but nearly $500 million of the $2.2 billion was a criminal penalty and over $500 million went to states.  Half of the total recovered is actually counted in the federal FCA statistics.

Ultimately, there is no evidence that the total fraud recoveries in the health care arena are going down.  FCA actions were very high in 2014, almost entirely due to non-qui tam banking cased that are listed in the non-HHD and non-DOD part of the report.  The total FCA number jumped from $422 million (FY 2013) to $3.3 billion (FY 2014), of which $2.6 billion was brought in from non-qui tam cases.

Whistleblower Protection Caucus Created by Bipartisan Group of Senators

Monday, March 2nd, 2015

The official founding of a Senate Whistleblower Protection Caucus was announced on February 25, 2015 by Senator Charles Grassley (R-IA). This is a cross-party group of senators created by Senators Chuck Grassley (chairman), Ron Wyden (D-OR) (vice-chairman), Ron Johnson (R-WI), Mark Kirk (R-IL), Deb Fischer (R-NE), Thom Tillis (R-NC), Barbara Boxer (D-CA), Claire McCaskill (D-MO), Tammy Baldwin (D-WI), and Ed Markey (D-MA).

The National Whistleblower Center released a report on just how whistleblowers are essential to protecting the United States from fraud. The report is titled, “Utilizing Whistleblowers in the Fight Against Waste, Fraud and Abuse.” The Executive Director of the National Whistleblower Center, Stephen M. Kohn, stated, “This is an example of bipartisanship which makes our system work.” Furthermore, Kohn said, “The National Whistleblower Center looks forward to working with the Senate Whistleblower Protection Caucus to ensure all whistleblowers obtain meaningful protection.”