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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March 21, 2017

UBS to Face French Tax Trial After Settlement Talks Fail

By the C|C Whistleblower Lawyer Team

UBS AG, the Swiss bank, will stand trial in France for allegedly helping wealthy clients evade taxes by hiding funds overseas. UBS had been in settlement negotiations with French authorities, but the parties had been unable to agree on the size of the fine.

UBS reportedly rejected a settlement proposed by French prosecutors that included a fine of $1.1 billion euros (about $1.2 billion). UBS was seeking to resolve the claims for less than 300 million euros, which is what the bank paid to resolve similar allegations with the German tax authority in 2014. UBS also settled similar claims with US authorities for $780 million in 2009 and is currently facing a similar inquiry in Belgium.

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March 21, 2017

Whistleblower News From The Inside — March 21, 2017

By the C|C Whistleblower Lawyer Team

China Medical Technologies Executives Charged in U.S. Fraud Case – Xiaodong Wu and Tak Yung Samson Tsang, the founder and a former executive of China Medical Technologies Inc., were charged in the U.S. with stealing more than $400 million from investors in the bankrupt maker of medical diagnostic tests as part of a seven-year scheme. Bloomberg

Bill Making Some Whistleblower Deals Public Gets Panel OK – A New Jersey bill that would make public whistleblower settlements involving state, county or town authorities was unanimously approved by the state’s assembly judiciary committee. The bill was inspired by former Hunterdon County assistant prosecutor Bennett Barlyn who claimed he was fired after he alleged the state dismissed an indictment involving Christie supporters. U.S. News

Maine woman sues California security firm, alleging violation of whistleblower protection law – A Maine woman has filed suit in federal court against Vescom, a California security services firm, alleging the company retaliated against her when she complained about allegedly illegal acts being committed by one of its executives. Portland Press Herald

March 20, 2017

Gorsuch Supreme Court Confirmation Hearings Begin

By the C|C Whistleblower Lawyer Team

This morning the Supreme Court confirmation hearing of Judge Neil Gorsuch before the Senate Judiciary Committee began. In his opening statement, Senator Charles Grassley praised Judge Gorsuch as a nominee “whose grasp on the separation of powers, including judicial independence, enlivens his body of work.” Senator Dianne Feinstein, the top Democrat on the committee, referenced back to the failed nomination of Judge Merrick Garland who did not receive a confirmation last year after being nominated by former President Obama.

The start of the hearing presents a conundrum for Colorado Senator Michael Bennet. Senator Bennet faces pressure from his party to reject Gorsuch’s nomination while simultaneously balancing his relationship with Gorsuch as a fellow Coloradan and the mutual ties between Gorsuch and Bennet to Colorado billionaire Philip Anschutz. Prior to the start of the confirmation hearings, Judge Gorsuch met with 72 senators according to his team. click here for more »

March 20, 2017

Whistleblower News From The Inside — March 20, 2017

By the C|C Whistleblower Lawyer Team

After SCOTUS’ ‘Escobar’ Decision, Courts Increasingly Sink Implied-Certification FCA Suits – Since the June 2016 Supreme Court decision in Escobar, several federal courts have strictly interpreted the viability of implied-certification suits. A recent example in US ex rel. McBride v. Haliburton in the United States Court of Appeals for the DC Circuit demonstrates this new focus. Forbes

Jury Awards Whistle-Blower $2 Million in SF Sewer-Fraud Case –  A jury ruled Friday that San Francisco must award a former deputy city attorney more than $2 million in damages in a lawsuit that said she was fired for exposing a long-running illegal payment scheme between municipal officials and plumbing companies. A unanimous jury decision in San Francisco Superior Court found the city violated statutes under both the California Whistleblower Protection Act and False Claims Act in the firing of Joanne Hoeper. SF Chronicle

UBS ‘Very Pessimistic’ About Settling Tax Fraud Case in France – UBS Group AG is “very pessimistic” about reaching an agreement with French authorities to settle a case of alleged tax fraud that forced the bank to post a 1.1 billion-euro ($1.2 billion) bond to cover any potential penalties three years ago, Journal du Dimanche reported. France’s financial prosecutor is seeking a 1.1 billion-euro fine from UBS to settle the case with no admission of guilt from the lender, the French newspaper said Sunday, citing unidentified sources. Bloomberg

March 17, 2017

In Their Own Words — Vestager

–“If people are concerned by business practices that they think are wrong, they can help put things right…Information can contribute to the success of our investigations quickly and more efficiently to the benefit of consumers and the EU’s economy as a whole”

EU Competition Commissioner Margrethe Vestager commenting on the EU’s new anonymous whistleblower tool to report antitrust violations.  Click here for more.

March 17, 2017

Fraudster Of The Week — Ben Johnson, Maker of “Drinkable Sunscreen”

By the C|C Whistleblower Lawyer Team

On Tuesday, the Iowa Attorney General’s Office filed suit against Osmosis LLC and Harmonized Water LLC, two Colorado-based companies that have been hawking a “drinkable sunscreen” product to consumers.  The lawsuit alleges that the companies, both of which are owned by Benjamin Taylor Johnson, deceived Iowans by advertising water with properties it did not have.   The “sunscreen” water sells for at least $30-a-pop.

Osmosis, which has been selling its “UV Neutralizer” for several years, advertises the product as the “world’s first drinkable sunscreen.”  The company claims that the water contains a “form of radio frequencies called scalar waves.”  When ingested, these waves purportedly “vibrate above the skin to neutralize UVA and UVB, creating protection comparable to an SPF 30.”  The company also sells a water-based mosquito repellent that similarly purports to create an anti-bug “vibrating shield,” called Harmonized H2O Mosquito. click here for more »

March 17, 2017

EU Seeks to Encourage Whistleblowers in Fight Against Cartels

By the C|C Whistleblower Lawyer Team

EU antitrust regulators unveiled plans to help individuals blow the whistle on cartels while protecting their identity — a move which may lead to more cases of wrongdoing being uncovered in the future.

The European Commission, which currently relies on a leniency program in which companies alert them to cartels in exchange for no sanction, said the scheme is aimed at employees who want to do the right thing by stopping illegal price fixing.  The scheme protects whistleblowers’ anonymity through an encrypted messaging system where whistleblowers can contact the Commission without forwarding any of the usual metadata that would identify the person. click here for more »

March 17, 2017

Whistleblower News From The Inside — March 17, 2016

By the C|C Whistleblower Lawyer Team

Ninth Circuit Holds Dodd-Frank Protects Internal Whistleblowing — The U.S. Court of Appeals for the Ninth Circuit recently joined the Second Circuit in holding in Somers v. Digital Realty Trust that whistleblowers are protected under the Dodd-Frank Act if they report securities-law violations internally and not to the Securities and Exchange Commission. By contrast, the Fifth Circuit, the only other federal circuit to weigh in, held that only those who report to the SEC are protected as “whistleblowers” under Dodd-Frank. National Law Review

Airbus Probed by French Authorities as U.K. Fraud Case Widens — French authorities joined the U.K. in a corruption probe of Airbus Group SE centered on allegations of fraudulent practices related to selling planes and arranging aircraft financing.  The probe by the Parquet National Financier follows steps by the U.K.’s Serious Fraud Office in August to look into possible bribery and corruption in Airbus’s civil aviation business related to third-party consultants. Bloomberg

Spokane Area Cardiologist, Dr. Romeo Pavlic, to Pay $300,000 Resolving Alleged False Health Care Claim — The United States Attorney’s Office for the Eastern District of Washington announced a settlement agreement with Dr. Romeo Pavlic to resolve allegations that for years Dr. Pavlic falsely billed Medicare and Medicaid by repeatedly and falsely claiming to have provided services and tests to vulnerable patients when in fact he had not. DOJ

March 16, 2017

Kushner Cos Stands to Gain Millions from EB-5 Investors

By the C|C Whistleblower Lawyer Team

Given the Trump administration’s stance on immigration—both legal and unauthorized—and the President’s professed wariness of the People’s Republic, it comes as some surprise that Trump son-in-law and senior advisor Jared Kushner stands to gain millions from an anticipated partnership with Chinese company Anbang Insurance Group. Still more surprising is the related refinancing deal, which relies on $850 million in investment from wealthy Chinese citizens who, through an oft-criticized federal program, hope to trade millions in private investment for green cards.

Although Jared Kushner reportedly sold his interest in the property, Kushner Companies, in which he retains an interest, may soon receive $400 million from Anbang as part of an investment deal related to a Manhattan office tower at 666 Fifth Avenue. In addition to the $400 million payout, the total planned transaction, worth approximately $4 billion, would make Kushner Companies and Anbang business partners, and would slash an existing mortgage owed by the Kushners to about a fifth of its current amount. It’s a great deal for Kushner Cos, which has seen the investment property struggle financially—and indeed teeter on the edge of insolvency—since acquiring it in 2007 for $1.8 billion.

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March 16, 2017

Whistleblower News From The Inside — March 16, 2017

By the C|C Whistleblower Lawyer Team

EU sets up messaging system for cartel whistleblowers – The EU’s antitrust enforcement commission has set up a system for whistleblowers to report cartel activity or price fixing. The platform strips identifying metadata from whistleblower submissions including messages and documents, and will allow whistleblowers to engage in ongoing anonymous communication with Brussels. ABC

Kansas files FCA suit over fake lottery tickets – Kansas prosecutors alleged three individuals scored $44K in fraudulent multi-state lottery wins with numbers obtained through number-generating software. One of the accused is a former computer-security official with the Multi-State Lottery Association. Kansas Attorney General

Heinz security guard charged with insider trading – A former home security guard for Heinz board member Todd Alpert was charged with insider trading related to Warren Buffet’s 2013 takeover of the company. Alpert allegedly learned of the deal by reading emails in an account he monitored as part of his job, held the Heinz stock in question for 52 minutes, and profited almost $44k. Wall Street Journal