For one thing, a home office might not be quite as secure as a federal office building.

Iowa’s senior senator, Chuck Grassley (R), has disclosed a whistleblower’s allegation that the number one investigator for FDA’s criminal enforcement section, Terry Vermillion, has been acting beyond the safe scope of his employment. Besides the allegation of an unauthorized telecommute, Vermillion was also charged with specific instances of “alteration of internal agency reports,” and additional misconduct.

Vermillion announced his resignation over the 2010 Thanksgiving holidays (The Wall Street Journal, November 24, 2010). Vermillion, whose branch has been investigating allegations of doping in professional bicycle racing, reportedly refused any comment on the high-profile whistle blower’s anonymous allegations.

Grassley received the anonymous letter in September, but chose to begin an initially private investigation before pushing ahead with a more formal investigation. It was unclear as to whether additional data had been received from the anonymous whistle blower. Vermillion’s branch was large, even by Washington insider standards: Vermillion’s salary was $200,000 annually, and had grown to more than 200 employees with a $41 million budget.

Interestingly, in a pattern not uncommon among qui tam cases. The CI unit had been feeling heat for two years. In 2008, Senate and House Republicans criticized the unit for over-emphasizing drug cases, instead of corporate misconduct. And early in 2010, the GAO criticized the lack of “accountability” over Vermilion’s—a former secret service agent-- activities.

When it comes to whistleblowing, a fine art has emerged in the Nation’s Capitol. Some critics, however, are concerned the process is becoming more opera than openness.

" If the Secretary proceeds with any administrative or judicial action based upon information brought to the Secretary’s attention by an individual, the individual shall receive as an award at least 15 percent but not more than 30 percent of the collected proceeds (including penalties, interest, additions to tax, and additional amounts resulting from the action), or from any settlement in response to such action... ."

There are interesting limitations, however, on this apparent government largess. The good news was the large increase in IRS whistleblower awards, from 15 to a possible 30% maximum. There were some compromises, however. For example, the whistleblower award is predicated upon a claim against someone whose annual income exceeds $200,000, AND when the total amount in taxes, penalties, and interest owed is more than $2,000,000. In fact, revisions to the whistleblower statute suggest there may be more limits than many whistleblowers anticipate.

Courts have recently weighed in on saying how low can attorney fees in whistle blowing go. The answer is...quiet a tweet: the First US Circuit Court of Appeals lowered an attorney's contingency-based recovery from $292,000 to $50,000. The court noted that government officials did the bulk of the work, and that the attorney was able to 'piggy back' on their efforts. Most importantly, the court reasoned the rationale of whistleblower laws was to protect and serve the interests of the public...and to a large extent, the whistle blower's interests in an award are indistinguishable.

"The whole purpose of the discretionary award to whistleblowers under this statute is to create incentives for the whistleblower to take risks that may disadvantage the whistleblower in his relationship to his employer....The amount of the fee that will be siphoned off by the lawyer significantly affects the size of that award and the power of the incentive. The court in administering this statute is obligated to ensure his excessive legal fees will not diminish the statutory incentive." Judge Dyk, U.S. v. Hawthorn, entered 10/18/2010.

The importance of any potential limitations, or even reductions in anticipated awards, is that whistleblowers, without adequately motivated legal counsel, frequently have no means to deal with the costly and career debilitating efforts to maintain a whistleblower case. Since first introduced in 1863, qui tam laws have routinely allowed up to 30% awards.

At the end of the process, however, government may always reduce a Whistleblower award the good old fashioned way: by collecting taxes on it. Happily, the IRS allows legal fees to be deducted. (Campbell  v. Commissioner of Internal Revenue, January 21, 2010).

The first called foul against OSHA's whistleblower program came in August, 2010, when the Government Accounting Office (GAO) concluded OSHA functioned as though its field investigators were simply overwhelmed by the scope of their job. The GAO report was sweepingly negative: “OSHA could not provide assurance that complainants were protected as intended under the various whistleblower protection statutes.”

OSHA is responsible for maintaining the Office of Whistleblower Protection Programs (OWPP). The OWPP is critical in the field: OSHA is primarily responsible for investigating 19 first-line whistleblower laws.

Critics of OSHA's investigative record argue that the concept is simple enough..if whistleblowers don't feel protected from being fired for what they know, then they are generally less willing to take a risk to share their knowledge. Even worse, OSHA's critical ability to gather safety information will be compromised, if it won't take the lead in whistleblower protection.

Less obvious in the GAO report was precisely how to remedy OSHA's glaring faults. A second and separate agency audit, this time from DOL's Office of Inspector General (OIG) ,was released in September, 2010, and used unusually blunt language against a sister agency. The GAO's stinging report alleges an array of inadequate whistleblower protections by OSHA. The GAO report, revealing the portrait of an agency with a potential bias against supporting whistleblowers, added fresh doubts to OSHA's field safety record. Among the enforcement errors, OSHA is alleged to fail to meet even its own internal whistleblower standards in a host of critical areas.

Among the leading complaints by the DOL/OIG:

• Almost 80% of the agency's whistleblower investigations failed at least one element of OSHA's own Whistleblower Investigations Manual.
• Critics believe OSHA's 2% merited case findings of retaliation complaints was likely too low.
• Final rulings, without conducting minimal face-to-face interviews, occurred in almost half of OSHA's whistleblower investigations.

Conclusion: Faulting OSHA's Internal Culture

Worrisome to many experts in the whistleblower field is wonder if OSHA may have simply developed a culture of disconcern toward internal reforms. Ironically, months before the scathing audits, an internal OSHA memo addressed this potential tone deafness.

Subsequent testimony before Congress detailed OSHA's apparently lax attitude toward whistleblower protections. Representatives of the Public Employees for Environmental Responsibility (PEER) have alleged OSHA's handling of industry whistleblowers was not isolated to a few cases. Instead, PEER believes OSHA's inattention to internal industry reports reflects OSHA's own attitudes toward its own potential whistleblowers”

“OSHA does not effectively protect workers who report health and safety hazards or other violations and dangers. Moreover, OSHA does not protect its own specialists from retaliation for raising health and safety issues or concerns about the consequences of OSHA’s own actions – or inaction.” March 4, 2010 “OSHA Listens” Stakeholder Session OSHA Docket # OSHA-2010-0004."

PEER has also staked out its position that OSHA can no longer be trusted to watch after whistleblowers. Instead, the group now advocates removing whistleblower investigations from the department altogether.

Sources:
"Complainants DId Not Always Receive Appropriate Investigations Under the Whistleblower Protection Program." http://www.oig.dol.gov/public/reports/oa/2010/02-10-202-10-105.pdf
"OSHA Must Address Crippling Weaknesses in Whistleblower Protection" http://peer.org/docs/osha/3_4_10_PEER_OSHA_Listens_testimony.pdf
"Whistleblower Protection Program: Better Data and Improved Oversight Would Help Ensure Program Quality and Consistency" http://www.gao.gov/products/GAO-09-106

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Scott is a Republican candidate running for Governor of Florida. A native of Illinois with no former experience in the government, Scott joined the gubernatorial race on April 9. The primary election for the Republican candidate for governor will take place on August 24. Scott is running against Bill McCollum, Attorney General of Florida, and Florida Senator Paula Dockery for the Republican candidacy. Due to Scott’s personal commitment of $4.7 million to his own campaign (more than McCollum has raised in a year), he has been able to buy advertising slots. Thanks to his ads, he is becoming increasingly popular as reflected in polls. Scott, in his few months in the race, only trails McCollum by 14 percentage points. The most recent Mason-Dixon poll, places McCollum at 38 percent and Scott at 24 percent. However, this 14 percent lead is not a good sign for McCollum according to Brad Coker, a Mason-Dixon pollster. He stated, “’McCollum’s 38-24 lead over Scott doesn’t look impressive given his long tenure and high visibility as a Republican office holder.’” McCollum’s place as the front-runner is not secure as Scott’s campaign gains more momentum and support.

Despite the fact that the author of this article has droned on about the race, the question remains, “why would this entry characterize Grasso of the NYSE, Hurd of HP, and new-to-the-political scene Scott, as similar to one another?” The key: the past will always be questioned in the future, and fraud will follow you in future endeavors. While Grasso and Hurd have left their respective companies, they have not decided to run for office. Scott, fraudulent company CEO on one hand, and self-proclaimed honest-politician on the other, is running. The largest Health Care Fraud case in U.S. History took place against Columbia/Hospital Corporation of America (HCA). Rick Scott was CEO of Columbia/HCA when the company committed fraud and during the time of the investigations.

Scott helped to found the Columbia Hospital Corporation in 1987, which merged with HCA in 1989. During Scott’s time as CEO, Columbia/HCA committed fraud against the government by improperly billing Medicare, Medicaid, and Tricare. The cases included evidence that Columbia/HCA overbilled, paid kickbacks, billed for treatments and drugs that weren’t covered and billed for hospitality costs not related to healthcare costs (sports tickets, country club dues, etc.) Scott resigned in 1997 after it was proven that the company kept two books: one that was shown to the government, and one that had listed the actual truthful expenses of the company. Columbia/HCA paid $1.7 billion to settle the case. According to the “Rick Scott for Governor” website when Scott left Columbia/HCA it was revered as “one of the most admired companies in America.” It is unknown how much the average American buys this statement, but then again, the website says nothing about the fraud committed.

Despite Scott’s position as CEO of a fraudulent company, he left with $10 million in severance, $300 million in stock options, spent $5 million to oppose President Obama’s healthcare plan, and it looks as through he will spend $25 in the governor’s race, according to Caputo. Scott was not charged or interviewed in the investigation of Columbia/HCA and claims that he “’denies the chain committed any criminal acts that he was aware of.” To be fair, it is possible that Scott did not know of the fraud committed when he was CEO. However, he has made it known that, “Mistakes were made at the company, and as CEO I have to accept responsibility for those mistakes.’”

So thirteen years after his resignation, Scott returns to the limelight, this time as an “honest-politician” instead of a “fraudulent company’s CEO.” However, Scott’s return certainly has not been easy, as his opponents (McCollum and Democratic frontrunner Alex Sink) have used the lawsuit against Columbia/HCA against him in attack ads. McCollum’s campaign stated that, “’The fact that Rick Scott is running for Governor as a ‘reformer’ would be funny if it wasn’t so outrageous…Rick Scott not only oversaw fraud, Rick Scott is fraud.’” However, when McCollum was in Congress during the investigation of Columbia/HCA, he noted that the crackdown on health care providers was overzealous, and sponsored the Health Care Claims Guidance Act, which tried to cut back on the investigations.

The company’s fraudulent activity aside, Scott thinks that his background prepares him for governor. While he may have a prestigious business background and be quite the entrepreneur, the fraud committed by Columbia/HCA will draw negative attention to his campaign. When asked why he’s running for governor when never holding a political position before, Scott answered, “‘I’m an outsider, I’m a business person, I know how to create private sector jobs, I know how to balance a budget.’” To Scott’s credit, he did create jobs as CEO of Columbia/HCA by employing 285,000 workers, making it the seventh largest employer in the U.S. at the time. But Scott’s budget-balancing skills may be in question when looking at Columbia/HCA’s budget under his watch. Scott responded further to the initial question stating, “‘I know how to get results by holding people accountable.’” This was probably not his best choice of words, considering those who hold him accountable for defrauding Medicare.

The most ironic part of the former-CEO-turned-politician’s campaign must be the type of fraud committed by Columbia/HCA with respect to the state that Scott is running in. William March of the Tampa Tribune was likely half serious, half joking, when he questioned, “Can the man who ran the company that committed the biggest Medicare fraud in history get elected governor in a state full of retirees?” This is an ironic possibility.

NOTE: This blog is meant to inform viewers of fraudulent activity and qui tam laws and lawsuits. The Qui Tam Team has no personal or professional feelings on Rick Scott’s campaign, nor the outcome of the election. This entry was written with the intention to educate, not to state an opinion.

Sources:
Appleby, Julie. “HCA to settle more allegations for $631M.” USA Today. 18 December 2002. http://www.usatoday.com/money/industries/health/2002-12-18-hca-settlement-_x.htm.
Caputo, Marc. “Poll: Former healthcare exec Rick Scott trails Bill McCollum in GOP primary.” The Miami Herald. 5 August 2010. http://www.miamiherald.com/2010/05/08/1620055/poll-former-healthcare-exec-rick.html.
March, William. “Rick Scott criticized for heading company that committed fraud.” The Tampa Tribune. 28 May 2010. http://www2.tbo.com/content/2010/may/28/281228/gop-candidate-scott-criticized-heading-company-com/news-politics/.
“Meet Rick.” Republican Rick Scott For Governor. 2010. http://www.rickscottforflorida.com/home/meet-rick/.

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

[u]nprecedented government spending, recent amendments to the FCA, increased fraud enforcement budgets and priorities, skyrocketing FCA recoveries, state legislative and enforcement activities, and the sheer volume of ongoing government investigations and pending qui tam actions suggest that the FCA will remain the fastest growing area of federal litigation.

One of the most important factors contributing to FCA mania is lawmakers' obsession with tweaking the Act. The FCA has already been amended twice in the first six months of 2010, and Congress is hankering to amend the FCA once again.

Congress passed the Fraud Enforcement Recovery Act ("FERA'') in May 2009. FERA made some of the most significant amendments to the FCA in 20 years.  FERA already expanded protections for agents or contractors who blow the whistle. The latest version of the Financial Reform Bill would expand the scope of protected whistleblower conduct to include not only "efforts to stop 1 or more violations"  but also lawful behavior "in furtherance of an action'' under the FCA.

Massive outlays of federal dollars combined with Congress's FCA infatuation guarantee that these types of cases will stay hot. 2010 may well be the year of titanic clashes over the FCA, so grab a front row seat as the dollars fly!

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Manning leaked his information to the WikiLeaks site, and the video from the helicopter incident in particular set off a storm of controversy.  In terms of the hundreds of thousands of diplomatic cables that Manning claimed to have leaked, only one appeared on WikiLeaks--a cable which summarized the U.S.  Embassy's discussions with Iceland regarding the strange nation's debt problems (one cause of which apparently was Icelanders' superiority complex, which convinced many life-long fisherman that they were professional investors).

The big question now is whether Manning did a public service by leaking these documents and videos or just got carried away in his quest for attention. Manning had drifted from job to job, and at one point found himself  homeless. In introducing himself to Lamo, Manning wrote that he was facing discharge for an ''adjustment disorder." Manning also assaulted a fellow soldier, and wrote that he had been ignored by his fellow soldiers to the point that he felt like all had left were his laptop, some books, and ''a hell of a story.''

Manning's leaked video has been compared to The Pentagon Papers, which detailed the U.S. government's activities in Vietnam and revealed that four presidential administrations had misled the public regarding their intentions in the area. The Pentagon Papers were leaked to The New York Times by Daniel Ellsberg in 1971.

Bradley Manning is a different breed of whistleblower from those typically involved in exposing fraud against the government, and his case will continue to generate controversy. On the one hand, he exploited his access to sensitive information, violated the trust the military put in him, and potentially put U.S. soldiers and diplomatic relations at risk. On the other hand, he exposed the ugly side of war, one from which most Americans are shielded.

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

HEAT is a coordinated effort between DOJ and HHS, and it has a Medicare Fraud Strike Force that has been going around various cities busting health care fraud perps. It's operating in various locations, including South Florida, but no, you are not likely to see Attorney General Holder wearing a Miami Vice suit and driving a go-fast boat into a medical center.

In recent testimony given before the House Ways and Means Subcommittee on Health and Oversight, Edward Siskel, the Associate Deputy Attorney General, stated that since May 2009, the Strike Force has been putting fear in the hearts of health care fraudsters. Strike Force prosecutors have filed over 120 cases charging more than 290 defendants and have obtained 16 convictions. The Strike Force also appears to have had a deterrent effect. In the twelve months since the Strike Force was announced, the Miami area has seen an almost $2 billion reduction in durable medical equipment submissions compared to the preceding 12 month period.

Deputy AG Siskel also notes in his testimony statistics all too familiar to qui tamers: the bulk of the DOJ's civil case load comprises suits against drug and medical device makers. Qui tam suits have proved to be an important weapon in the DOJ's fraud-fighting arsenal, and have helped the government to recover $24 billion since 1986. This goes to show that the civil justice system is just as important as the swaggering Task Force in the fight against health care fraud.

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Pequignot was claiming $500 per violation, and considering the vast number of Solo lids in existence--21,757,893,672 (you may even be slobbering all over one right now)--the fines would have produced an award for the United States of $5.4 trillion—enough to pay 42% of the national debt. Where Solo would have gotten its hands on this kind of cash is anyone's guess. What Pequignot would have done with his trillions is also unknown. He could have purchased several muncipalities, or even a few states, and started his own patent-ocracy.

The court found that Pequignot failed to prove that Solo intended to deceive the public with its expired patent mark. Intent can be very difficult to prove in lawsuits generally, and it doesn't help that a lot of products are stamped with expired patents simply because the manufacturer is too lazy or cheap to change the molds or machining.

In Solo's case, it appears that the company did not change its molds based on cost-saving. A Solo cup mold produces a lid every four to six seconds, and goes on doing this for 20 years or more. Based on advice from an attorney, Solo instituted a policy whereby replacement molds would not include the expired patent number. However, the molds were only to be replaced when the old mold became damaged or wore out. This helps to explain why there were/are so many Solo lids floating around out there with the expired patent marking.

The general consensus is that the U.S. Court of Appeals for the Federal Circuit's ruling will put a damper on future suits aimed at getting big money for false marking. But with the number of old molds constantly stamping away out there, we'll see.

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Criticism continues to be heaped on the federal agency responsible for ''regulating'' off-shore drilling, the Minerals Management Service (MMS), and rightly so. A new report, also in the New York Times, finds yet another maddening instance of MMS' appalling failure to fulfill its mandate. A device known as a blind shear ram was in place at the Deepwater Horizon well, and was supposed to be the last line of defense in preventing a blow-out. Of course, it failed. What is particularly infuriating is that MMS ignored its own experts as to how the risk of blind shear ram failure could be minimized.

There have been some major changes at MMS, so hopefully it won't be business as usual once the country forgets about off-shore drilling again. The new director of MMS is Michael R. Bromwich, who used to be an inspector general over at DOJ (the same guys will intervene in your qui tam case, if you're lucky!). The new agency will have a quick-response, SWAT team-like unit that will supposedly be able to respond with alacrity to allegations of crooked officials or misbehaving companies. The new investigative unit will have its work cut out for it. The old MMS could not be described by any stretch of the imagination as ''ethical.'' Doing crystal meth and then going out to do inspections? Why not? Going huntin' and fishin with on the oil company's dime? Yup. Inspecting drilling platforms of the oil company with which you're simultaneously negotiating for a job? Why the heck not? (Don't forget the crystal meth!).

This is all to say that the level of corruption in this agency is absurdly hilarious, and it will likely be very difficult both to root it out and prevent it from re-occurring, fungus-like, in the future.

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Campbell filed a complaint with the Labor Department alleging that he was fired for his role in the federal investigation as well as for safety complaints he made to mine management.  Federal administrative law Judge L. Zane Gill agreed with Campbell, stating that there was "substantial evidence to support a reasonable cause to believe" that Campbell's complaints led to his firing.  The administrative law judge ordered Massey to temporarily reinstate Campbell, and the ball is now in the Labor Department's court to file a complaint seeking permanent reinstatement.

The harsh world of mining seems to lend itself to a wide array of egregious violations. If you're still fired up about mines, here's a shameless plug for the film North Country, which is the semi-fictionalized story of a group of women who had the guts to stand up to a mining corporation and bring a sex discrimination lawsuit despite outrageous threats and harassment. The lawsuit at the center of the film is based on Jenson v. Eveleth Taconite Co. The case was filed in 1988 on behalf of Lois Jensen and other female workers at EVTAC mine in Eveleth, Minnesota. Jensen began working at the mine in 1975 and endured outrageous sexual harassment. She quit working at the mine in 1992, and was diagnosed with post-traumatic stress disorder shortly thereafter. It wasn't until 1998, when another trial was set to begin following years of protracted litigation, that the company settled with 15 female plaintiffs for $3.5 million.

Both the Massey mine situation as well as the Eveleth sexual harassment suit illustrate that even in harsh, remote environments such as mines, concerned individuals can make a difference by letting their voices be heard. No matter how far underground you may be, there is always a path to the courtroom.

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.