The U.S. Government Accountability Office (GAO) released a report yesterday criticizing the Department of Defense Office of the Inspector General’s (DOD OIG) process for investigating whistleblower-retaliation complaints brought by DOD civilian and contractor employees. The GAO report found that DOD OIG routinely missed timeliness targets and often failed to follow its own internal processes for ensuring the independence and thoroughness of its investigations. click here for more
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.
As reported in Bloomberg, the New York Times and other news outlets
The industrial scandal engulfing Kobe Steel began to reverberate overseas as Japan’s third-biggest steelmaker said its staff falsified data about the strength and durability of some aluminum and copper products used in planes, trains and potentially a space rocket.
Companies ranging from the automakers Toyota Motor and Honda Motor to aircraft companies like Boeing and Mitsubishi Heavy Industry said they were investigating the use of rolled aluminum and other materials from Kobe in their products. They also said they were trying to determine if substandard materials had been used in their products, and if so, whether they presented safety hazards. click here for more
— “We should not continue to permit retaliation against those who would warn us by speaking their conscience.”
Jesselyn Radack and William Neuheisel’s op-ed discussing the lack of whistleblower protections available to NSA members. Read more here.
Congress must take action to protect whistleblowers from the NSA — At the end of this year, Section 702 of the FISA Amendments Act is due to expire unless it is renewed by Congress. The provision is known for authorizing mass surveillance programs operated by the National Security Agency. If Congress renews the program, it should ensure strong whistleblower protections are in place to guard against abuse. Unfortunately, whistleblowers in national security and intelligence agencies today are specifically excluded from the protections applicable to employees and contractors of other federal agencies. The Hill
Former Valley Mills employees sue city under state Whistleblower Act — Two former city of Valley Mills employees filed a lawsuit alleging the city administrator stole their deer feeders and then fired them for reporting it to law enforcement. City Administrator William Linn was served Friday and the city has three weeks to file an answer before the lawsuit moves forward, said John Cullar, an attorney with Cullar & McLeod LLP, of Waco. Waco Tribune
Parsippany: Whistleblower trial nearing its end — The trial considering a retired Parsippany police captain’s whistleblower lawsuit against the township has offered a rare glimpse into internal department tensions. Testimony on former Capt. James Carifi’s lawsuit started Sept. 12 — the same day that township attorney John Inglesino vilified Carifi and his lawsuit settlement demand of $4.2 million at a public meeting. The jury heard from Carifi that he allegedly was wrongly bypassed for promotion to deputy chief and was targeted for retaliatory internal affairs investigations between 2009 and 2011 after he blew the whistle on perceived wrongdoings by others in the department. Daily Record
This week the Dr. Chris Kirkpatrick Whistleblower Protection Act of 2017 moves to the House of Representatives after being passed by the Senate in May. The House Committee on Rules will meet on Tuesday October 10th to discuss the bill. The bill creates further protections for certain federal government whistleblowers. President Trump first took action in this area in with an Executive Order on whistleblowers working at the Department of Veterans Affairs. This action was later codified in a bill signed by the President in June. The new bill is not extremely extensive, but it addresses some issues pertinent to government whistleblowers. click here for more
— “The conduct alleged in our lawsuit is nothing short of evil.”
New Jersey Attorney General Christopher S. Porrino discussing the lawsuit brought by NJ against drug maker Insys
Contractor gets 3-year sentence for Iraq fraud that cost U.S. millions – A former government contractor who helped scam the State Department out of millions of dollars was sentenced Friday to three years in prison. Jose Rivera, 57, of Potomac, Md., worked with two others to trick the contractor DynCorp into paying a grossly inflated rent for a training camp in Iraq, according to prosecutors. The State Department ultimately footed the bill for the property, which came out to over $5.3 million. Judge Leonie M. Brinkema said a serious sentence was required to “make sure other people involved in government contracting know that if they commit fraud, even over there, there will be consequences.” Washington Post
IBM Can’t Exit FCA Suit Over Emergency Response Program – An Illinois federal judge ruled Friday that IBM Corp. can’t escape a whistleblower suit over $50 million in allegedly false claims for federal grant funds meant for an emergency response project, saying there is enough evidence for a jury to ponder the majority of the suit’s charges. In his ruling on IBM’s motion for summary judgment, U.S. District Judge Thomas Durkin largely rejected the company’s efforts to dodge relator Michael McGee’s False Claims Act suit over a Cook County, Illinois, program to install mobile telecommunications platforms in emergency responders’ vehicles. The judge said McGee has presented enough evidence to keep alive his Illinois False Claims Act claims and one federal FCA claim accusing the company of knowingly making false statements to back up its allegedly fraudulent requests for payment. Law360
Attorney General Porrino Announces State Lawsuit Alleging Greed-Driven Scheme to Boost Sales by Fentanyl Drug Maker Insys – Attorney General Christopher S. Porrino announced today that New Jersey has filed a four-count lawsuit against Insys Therapeutics, Inc. charging that the company engaged in a greed-driven campaign of consumer fraud and submission of false claims to health insurers to increase the market share for its powerful opioid-fentanyl drug Subsys. NJ AG Office
Four NCAA assistant coaches, among others, faced federal indictments last week in a fraud and corruption scheme alleging a history of bribes to recruit amateur athletes. The coaches stand accused of accepting cash bribes in exchange for influencing college players to retain the services of various advisors paying the bribes. The FBI’s investigation, which has been ongoing since 2015, also implicates Adidas, whose employees allegedly paid high school players to encourage them to sign with schools sponsored by the athletic apparel company. Nike is also under federal scrutiny. click here for more
The SEC charged a Westchester, New York-based investment adviser with fraud stemming from lies to retail investors about the value of their investments in a Ponzi-like scheme.
The SEC alleges that, starting in approximately 2010, Michael Scronic began to raise money from at least 42 friends and acquaintances, many of whom were from his suburban community, in order to invest in a risky options trading strategy. He allegedly lured investors by informing them that he had a long and impressive track record of proven returns. He also allegedly lied to investors about the liquidity of investments, telling one investor that “what’s cool about my fund is that i’m [sic] only in publicly traded options and cash so any redemptions are met within 2 business days so if you do need to withdraw for your business needs it will be quick and painless.” click here for more
— “It was a really difficult decision. I felt strongly about serving in the civil service, and it’s really hard to leave, but Secretary (Ryan) Zinke is really acting against all of the issues that are important to the health and safety of Americans and natural resources.”
Joel Clement, the Interior Department climate change whistleblower, discussing his resignation. Click here for more.