Monthly Roundup -- June 2014
Here is our look-back at the key whistleblower and fraud developments we have written about over the past month:
Featured Posts and Commentary
Late last week, Circuit Judge Robert Wilkins gave the government and whistleblower Floyd Landis a green light to proceed with their False Claims Act lawsuit against famed cyclist Lance Armstrong and others. At stake is over $100 million in claimed damages and penalties for an alleged doping scheme involving the U.S. cycling team. Click here for more.
A new study conducted by the US Government Accountability Office (“GAO”) shows that the Medicaid managed care program is vulnerable to serious health care fraud. The study found that the weakness is primarily due to the Centers for Medicare and Medicaid Services (“CMS”) delegating managed care oversight to the states – but without providing them with clear guidance and resources to combat fraud. Click here for more.
The good news is the United Kingdom has spoken loud and clear on the critical role whistleblowers must play in rooting out fraud and misconduct in the workplace. The bad news is it continues to believe whistleblower rewards is a bad idea. This comes out of the response released yesterday by the UK Department for Business Innovation & Skills to the “Call for Evidence” it put out last year soliciting comments on how to improve the country’s burgeoning whistleblower system. Click here for more.
The Supreme Court ruled unanimously that public employees cannot be fired or retaliated against for testifying as concerned citizens about corruption. The case involved a community college employee, Edward Lane, who was fired after testifying during a 2006 federal corruption trial that a state legislator was on the college’s payroll, despite doing no work. Even though the legislator was convicted, the community college laid Lane off from his position as counselor to at-risk youth. Lane sued the college president, alleging that the layoff was in retaliation for testifying in the federal case. Click here for more.
The Securities and Exchange Commission announced another ground-breaking development for its whistleblower program earlier this week, releasing details on its first whistleblower retaliation case filed under the Dodd-Frank Act. In doing so, the SEC sent an unambiguous message: They are just getting started in going after companies that retaliate against whistleblowers. Click here for more.
The US healthcare system is the most expensive in the world. Yet, it continues to rank poorly when compared to the healthcare systems of other developed countries. In fact, when compared to the most developed countries around the globe, the state of our overall healthcare system comes in dead last. At least that is the finding of the report issued this week by The Commonwealth Fund titled Mirror, Mirror on the Wall – How the Performance of the US Healthcare System Compares Internationally. Click here for more.
Last Friday, the Court of Appeals for the Third Circuit held that it would join three other circuit courts in rejecting a more restrictive view of what qui tam relators must allege in order to survive challenges to their False Claims Act complaints. In doing so, the Third Circuit’s decision in Foglia, ex rel. U.S. v. Renal Ventures Management, LLC has deepened the split forming among the circuit courts, with four circuit courts taking a more restrictive view on the minimum facts whistleblowers must state in their complaints. Click here for more.
As part of its ongoing crusade to shine a light on Medicare reimbursement, the Wall Street Journal has uncovered some disturbing details on how certain doctors appear to be gaming the system. This comes from the Journal’s rummaging through the Medicare data the Center for Medicare and Medicaid Services (CMS) released in April — the first time ever — on nearly a million healthcare providers. What the Journal found shows despite the government’s noble efforts to clean up the program, it has a long way to go in even making a dent in the estimated $60 billion annual tab for Medicare fraud and abuse. Click here for more.
International whistleblower support group the Courage Foundation launched a “Stand with Snowden” campaign in Berlin last night to garner support for Snowden as the end date for his temporary asylum fast approaches. The campaign asks Snowden supporters to upload photographs of themselves (or their friends, family and colleagues) holding a sign saying where you are from and that you “Stand with Snowden.” Click here for more.
For those of us who drink inexpensive or modestly priced wine, wine fraud is not much of a problem. But for the collector or wealthy connoisseur, wine fraud is a growing concern. Most documented cases of wine fraud tend to involve the most famous and costly vintages, particularly Bordeaux wines from excellent vintages, which can go for tens of thousands of dollars. The extravagant prices of these bottles make them ripe targets for counterfeiters. Click here for more.
The Second Circuit Court of Appeals has overturned a decision that many had hailed as one of the first to really hold Wall Street accountable for its behavior in the years leading up to the Great Recession. The opinion, issued yesterday, found that New York District Court Judge Jed Rakoff abused his discretion in rejecting a deal brokered between the Securities and Exchange Commission and Citigroup, Inc. regarding allegations of mortgage-bond fraud. Click here for more.
Last summer, the Fifth Circuit in Asadi v. GE Energy ruled the whistleblower retaliation protections of the Dodd-Frank Act apply only to those who actually provide information to the government (through the SEC or CFTC). If a whistleblower merely reports within the company, to a supervisor or through an internal compliance program, the Fifth Circuit ruled there is no coverage under the Act. For now, it remains the only appellate court to speak to this issue with a definitive split among the district courts as to whether the Fifth Circuit got it right. Add two more district court decisions to the line of cases finding the Fifth Circuit got it wrong. Click here for more.
Questions of the Week
- Has your opinion of Edward Snowden changed (either for better or worse) since he gave his television interview? 60% of respondents said Yes.
- Do you think the NCAA should drop its ban on paying college athletes? Polls still open. 58% of respondents said No.
DOJ Fraud Settlements
The DOJ settled False Claims Act and other fraud allegations with BNP Paribas, US Bank, Omnicare, Nestor’s Health Services, GE Capital, SunTrust, Quality Egg, and ArthroCare, among others, for a combined recovery this month of roughly $10.4 billion. Many of these matters were initiated by whistleblowers under the qui tam provisions of the False Claims Act. Click here for more.