Whistleblower Insider

Whistleblower Insider is written by the Constantine Cannon law firm team of experienced qui tam and whistleblower lawyers. It is updated daily to provide the latest whistleblower and fraud news and developments.
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April 26, 2017

Question of the Week — Will the White House’s Demands Cause the Federal Government to Shut Down?

By the C|C Whistleblower Lawyer Team

A standoff between Democrats and Republicans (and Republicans and Republicans) has put the U.S. on the cusp of a federal government shutdown. If a government spending bill is not passed by Friday, then the government will no longer be able to fund itself. While both parties seem to be in agreement that such a shutdown is a bad idea, it’s unclear if either side will budge before the deadline.

Fortunately, federal law enforcement and emergency work would continue even in the event of a shutdown. However, when a similar shutdown occurred in 2013, it led to a host of problems including federal workers being furloughed and others being asked to work without pay. Any federal shutdown is sure to be disastrous—health care, transportation, and education are only some of the basic services that will be affected. click here for more »

April 26, 2017

DOJ Secures $11.4 Million FCA Settlement

By the C|C Whistleblower Lawyer Team

Yesterday, the Department of Justice announced that as Pacific Pulmonary Services will pay $11.4 million to settle a False Claims lawsuit.  At issue in the case were allegedly false claims to Medicare and other federal healthcare programs for oxygen and related equipment supplied in violation of program rules, as well as claims for sleep therapy equipment tainted by a kickback scheme.

Pacific Pulmonary Services provides oxygen tanks—both station and mobile—and related supplies, as well as sleep-therapy equipment, to patients’ homes in California and other states.  The government alleged that, beginning in about 2004, Pacific Pulmonary Services began billing government healthcare programs for these services without obtaining a physician authorization, as required by the programs’ rules.  In addition, the government alleged that, starting in 2006, the company violated the Anti-Kickback Act by making patient referrals to sleep clinics in exchange for those clinics referring patients back to Pacific Pulmonary Services for sleep therapy equipment. click here for more »

April 26, 2017

Whistleblower News From The Inside — April 26, 2017

By the C|C Whistleblower Lawyer Team

SEC awards nearly $4M to whistleblower — The SEC announced the award yesterday, saying the whistleblower tipped the agency and assisted throughout the ensuing investigation. “Approximately $153 million has now been awarded to 43 whistleblowers who became eligible for an award after voluntarily providing the SEC with original and useful information that led to successful enforcement actions.” SEC

Jury awards $22.4M in whistleblower retaliation suit against Cardiovascular Systems, Inc — A jury in Los Angeles awarded $22.4M in punitive damages to Steven Babyak in his lawsuit against his former employer, a cardio device maker.  The lawsuit alleged Babyak was fired after repeatedly complaining about various issues including physician kickbacks and off-label medical uses. The jury returned its verdict yesterday, one day after awarding Babyak $2.7M in general damages. Business Wire

Trump to Sign VA Executive Order — “President Trump is expected to issue an executive order Thursday creating an office within the Department of Veterans Affairs to take charge of disciplining or firing incompetent employees and protecting whistleblowers.” The Washington Times

April 25, 2017

In Their Own Words — Sessions

— “We will enforce the law and not back down to powerful forces – but we will be fair – equal justice to poor and rich.”

Attorney General Jeff Sessions at the Ethics and Compliance Initiative Annual Conference. Read more.

April 25, 2017

Energy & Process Corp. Settles False Claims Act Whistleblower Charges

By the C|C Whistleblower Lawyer Team

Georgia-based Energy & Process Corporation agreed to pay $4.6 million to resolve charges it violated the False Claims Act by failing to perform required quality assurance procedures and supplying defective steel reinforcing bars under a Department of Energy (DOE) contract to construct a nuclear waste treatment facility. See DOJ Press Release.

According to the government, the DOE paid E&P a premium to supply reinforcing bars that met stringent regulatory standards for the Mixed Oxide Fuel Fabrication and Reactor Irradiation Services facility in the DOE’s Savannah River site in South Carolina. However, the company allegedly failed to perform most of the necessary quality assurance measures even though it certified those requirements had been met. The government further claimed that one-third of the bars E&P used in the construction under the contract were defective.

click here for more »

April 25, 2017

Whistleblower News From The Inside — April 25, 2017

By the C|C Whistleblower Lawyer Team

Why we need a whistleblower in US Customs and Border Protection — “We know that CBP has a long history of racial profiling, excessive use of force, and mass surveillance. . . . But what we do not know about CBP is in many ways more frightening.” The Nation

Attorney General Sessions says FCPA enforcement is a top priority — “We will continue to strongly enforce the FCPA and other anti-corruption laws. Companies should succeed because they provide superior products and services, not because they have paid off the right people.” DOJ

Critics fear Trump will tap auto exec for NHTSA — “Car-safety advocates are worried that President Donald Trump might turn over the keys to the agency charged with regulating the safety of the nation’s automobiles to someone from within the industry’s ranks.” Detroit News

April 24, 2017

In Their Own Words — Hanna-Attisha

— “We right now have the perfect milieu for more Flints to come, in regard to the denial of science . . .The regulations that were on the books to make Flint not happen — the lead and copper rule, public health regulations, water regulations, air regulations — those are all being threatened right now.”  

Dr. Mona Hanna-Attisha, one of the Flint whistleblowers, commenting on the potential for more situations like the water crisis in Flint if science is threatened.

April 24, 2017

Trump Order Raises Significant FCA Compliance Concerns

By the C|C Whistleblower Lawyer Team

On April 18th, President Trump signed an executive order related to Buy American and Hire American laws. In light of the order, new compliance concerns have been raised regarding the False Claims Act’s “Buy American” provisions for government contractors. The executive order calls for agencies to more closely monitor compliance with “Buy American” provisions and limit the use of waivers.

Some argue that the new executive order will burden government contractors particularly in light of the Escobar decision. The two primary expressed concerns are that 1) “Buy American” and “Hire American” are going to be considered material provisions of some government contracts and will fall under the Escobar precedent and 2) the government itself may take a more active role in initiating and conducting investigations that may lessen the reliance on whistleblowers. The vast majority of False Claims Act qui tam suits are brought by whistleblowers but with agencies on notice that rigorous enforcement of “Buy American” provisions is expected, whistleblowers face of the risk of having a lesser role in these types of cases. click here for more »

April 24, 2017

Whistleblower News From The Inside — April 24, 2017

By the C|C Whistleblower Lawyer Team

Feds Say KBR Wants Too Much Discovery In $150M FCA Spat — Kellogg Brown & Root Services again went too far with discovery requests in defending a $150 million False Claims Act suit, according to the federal government, which told an Illinois federal judge Thursday the company’s data requests only serve to burden the government. Federal prosecutors claim that the requests, and a motion to compel production filed earlier this month, ignore previous rulings in the case that found KBR’s discovery demands excessive. Law360

SEC Cracking Down on Ponzi Schemes — On April 14, 2017, a federal judge granted a bid by the SEC to force former head fund manager Francisco Illarramendi to pay nearly $27 million for his role in a Ponzi scheme. According to the court’s order, Illarramendi was the mastermind behind an elaborate five-year scheme to cover up a $5 million investment loss. Rather than disclosing this loss to investors, Illarramendi tried to “raise as much money as possible to be able to make it so that the gains from . . . the additional money would eventually cover the loss.” Illarramendi’s sheme was unsuccessfully and only served to increase the amount of mismanagement between assets and liabilities to approximately $30 million. National Law Review

At Science March, Flint Whistleblower Warns More Crises to Come if Trump Gets His Way — Dr. Mona Hanna-Attisha, the pediatrician who blew the whistle on the lead crisis in Flint, Michigan, was among the thousands who converged on Washington, D.C. on Saturday to rally in support of science and against what many see as an attack on the scientific community by the Trump administration.

In an interview with The Huffington Post at the March For Science, Hanna-Attisha warned that the direction the Trump administration is taking the country will likely come with serious consequences. Huffington Post

April 21, 2017

In Their Own Words — Obama

—  “[A]cts of courage and patriotism [by whistleblowers], which can sometimes save lives and often save taxpayer dollars, should be encouraged rather than stifled.”

Barack Obama