Whistleblowing is a time commitment.  It requires gathering first-hand specific information about fraudulent activity, working with lawyers, spending time in negotiations or court, etc.  Many qui tam cases take years to settle.

Whistleblowing also requires money as hiring lawyers is necessary.  However, the money used to pay lawyers may be reimbursed to you after winning a case.  In our recent article on quitamteam.com, “Jury: College & Faculty Member Committed Fraud,” the whistleblower in the case, Dr. Daniel Feldman, is likely to be reimbursed.  Dr. Feldman filed the case in 2003, and it has taken 7 years for the final ruling to be issued.  Dr. Feldman’s fees and costs to his lawyers cost several hundred thousand dollars, which may be reimbursed to him in full!

Many think whistleblowing is a risky business.  But, contrary to popular belief, the risks are not very high as whistleblowers are protected by law.  For instance, many people think that whistleblowing involves the risk of losing your job, but under the False Claims Act (FCA), the Occupational Safety and Health Act (OSH Act), and other laws that protect whistleblowers, whistleblowers cannot be fired for whistleblowing.  According to the Department of Labor website, “Whistleblowers may not be transferred, denied a raise, have their hours reduced, or be fired or punished in any other way because they have exercised any right afforded to them under one of the laws that protect whistleblowers.”  So while whistleblowing may seem risky, the law is on the whistleblower’s side to protect him/her from any punishment as a result of whistleblowing.

So whistleblowing takes time, can take money, but is not very risky.  But still “why do it?”  “Is it worth it?” “What good will it bring you?”  The reward of being a whistleblower is not only self-satisfaction, but a heavy pay-off if you win the case.  In order to receive a reward for being a whistleblower, the government must recover at least $1 million in the case. Whistleblowers receive a mandatory minimum of 10 percent, to a maximum of 30 percent of what is recovered.  Therefore, if whistleblowers are awarded in cases recovering $1 million or more, a whistleblower will make between $100,000 and $300,000 at least.  For larger cases, a whistleblower must still receive at least 10 percent of the claim, and can make more than $100,000 to $300,000.  In the HCA case in 2003, the numerous whistleblowers received $151,591,500.  The largest Healthcare fraud settlement in U.S. history, against Pfizer Inc., paid six whistleblowers more than $102 million.  So while whistleblowing may take time, it is worth it. Overall, you can be reimbursed for payments to attorneys, you will not incur much risk, and you will make at least $100,000 if your case wins.

Dr. Feldman sums up why it’s worth being a whistleblower.  He stated that, “being a whistleblower is not something you undertake without tremendous sacrifice,” because of the time and risk involved.  However, he agreed that “In the end, prevailing certainty feels great and worth the cost to do the right thing” (Source: Salmanson Goldshaw).

Sources:
Henning, Peter J. “Come Blow Your Horn for the S.E.C.” The New York Times DealBook Blog. 26 July 2010. http://dealbook.blogs.nytimes.com/2010/07/26/come-blow-your-horn-to-the-s-e-c/.
Montopoli, Brian. “Obama Signs Sweeping Financial Reform Into Law.” CBSNews. 21 July 2010. http://www.cbsnews.com/8301-503544_162-20011201-503544.html Salmanson Goldshaw, P.C. as per PR Newswire. PR Newswire. “Federal Jury Finds Cornell University’s Medical College Committed Fraud.” 29 July 2010. http://www.prnewswire.com/news-releases/federal-jury-finds-cornell-universitys-medical-college-committed-fraud-99538899.html.
Savage, David. “Financial reform law includes big cash incentives for whistle-blowers.” Los Angeles Times. 23 July 2010.http://www.latimes.com/business/la-fi-reform-whistleblower-20100723,0,6099636.story.
United States Department of Health & Human Services. News Release. “Justice Department Announces Largest Health Care Fraud Settlement in its History.” 2 September 2009. http://www.hhs.gov/news/press/2009pres/09/20090902a.html.
United States Department of Justice. “Largest Health Care Fraud Case In U.S. History Settled HCA Investigation News Record Total of $1.7 Billion.” 26 June 2003. http://www.justice.gov/opa/pr/2003/June/03_civ_386.htm.
United States Department of Labor. “Whistleblower Protections.” http://www.dol.gov/compliance/laws/comp-whistleblower.htm.

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.

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.

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.

The case is

United States ex rel. Kaplan v. Metropolitan Ambulance & First-Aid Corp. et al., Civil Action No. 00-3010 (E.D.N.Y.).

According to allegations in a qui tam suit by the former CFO of one of the companies, Metropolitan Ambulance & First Aid Corp. (now known as SEZ Metro Corp.), Metro North Ambulance Corp. (now known as SEZ North Corp.) and Big Apple Ambulance Service Inc. (formerly known as United Ambulance), and the president of the companies, Steve Zakheim, used falsified records to appeal a Medicare refund demand. The situation is a bit convoluted, but what the companies were doing essentially consisted of the old health-care fraud standby: taking patients on unnecessary and expensive ambulance trips, and billing Medicare for the services. The government determined that these trips were in fact unnecessary and demanded a refund of the tens of millions of (tax payer) dollars that had been paid out. As is customary, an extensive appeals process was available.

However, Zakheim and his ambulance armada apparently didn't have the required proof to back-up their case on appeal, so they allegedly doubled their fun/fraud by submitting hundreds of forged letters verifying that the ambulance trips were medically necessary! The ROI was not so good here: Zakheim and the companies must pay $2.5 million in settlement money, not to mention the millions of dollars to be refunded. Vigilant whistleblower Larry Kaplan will pocket $618,450.

One has to ask: was it really worth it to engage in the fraud in the first place? This is yet another case in which the business logic behind some of the decisions seems to have been seriously lacking. The next time you see an ambulance speeding along (possibly with a bunch of cash flying out the windows) keep in mind that it might be following the  road to 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.

According to the Florida AG's office, here is the activity in which Office Depot engaged, prompting the investigation:

Bait and switch overcharging of state and local agencies by setting low fixed price for core items and then publishing catalog and website information that leads purchasing agents from low cost items to much higher priced alternative items.

Just as we rely on our defense contractors to provide the F-22s our tax dollars pay for, so de we rely on office supply companies to provide the staplers we contract for at the agreed price. It takes the efforts of both law enforcement as well as citizens to hold fraudsters accountable. For example, a former Lockheed  employee filed a lawsuit against his former employer alleging that it knowingly used defective materials in constructing the F-22's skin.

The point of all this is that fraud can occur whether you're talking the mundane (staplers) or the extraordinary (radar-evading jets). Fraud is 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.

Investigators with Senate Finance Committee under  Senator Chuck Grassley have been investigating Medtronic's relationship with several orthopaedic surgeons for years. In 2006, Medtronic agreed to pay the government $40 million to settle allegations that the company paid kickbacks to surgeons to get them to buy Medtronic products. The DOJ described Medtronic's relationships with doctors as “sham consulting agreements, sham royalty agreements and lavish trips to desirable locations” which the company offered to doctors between 1998 to 2003.

Medtronic makes big money off of the products it allegedly pays doctors to endorse. For example, Medtronic made $815 million in 2007 alone off of Infuse, a spinal product, which was the subject of a whistleblower lawsuit. With such enormous profits at stake, it is not surprising that device manufacturers like Medtronic pay fees to doctors and sponsor junkets.

Once again, all of this goes back to the ever-increasing role drug and medical device companies play in our lives. Health care is such a big business (emphasis on business) that the major players like Medtronic will keep shelling out what seems like big bucks for serious ROI. As more Americans become insured under the new health care bill and a whole new market opens for drugs and devices, the pecuniary carrot will be all the more enticing to these companies.

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.

In the first case, a subcontractor of Sikorsky agreed to pay $1.2 million to settle a FCA claim. Ceradyne, Inc., of Costa Mesa, CA, allegedly failed to ballistically test armor plating it installed near the pilot and copilot in Black Hawk helicopters.  The Black Hawk is used by the Army, Navy, Air Force, and Marines. Ceradyne allegedly failed to conduct the tests between 1992 and 2006, so there is potentially  a whole generation of Black Hawks out there that is not providing adequate protection for its crew members.

The second case also involves helicopters. This time, Bell Helicopter Textron realized that it (oops) overcharged the government for helicopters and services. Bell already paid more than $12.8 million in 2006 to settle its billing mistakes. Now, Bell must pay an additional $3.7 million to settle any claims the U.S. may have against the subsidiary Bell Helicopter Textron Canada Limited as a result of intra-company charges that led to more overbilling. This case comes under the umbrella of the National Procurement Fraud initiative, which is designed to identify this type of fraud early on. Unfortunately, military contractors are good at staying one step ahead of the government.

In the third leg of the military contractor fraud triumvirate is a case involving M24o and M249 machine guns.  A former employee of defense contractor Northside Machine Company accused his employer of ordering him to approve gun parts that didn't meet quality standards for troops and then (surprise!) firing him for blowing the whistle. Northside provides trigger assemblies and other parts for M240s and M249s, which are widely used by the military. A federally funded research group found that 30% of troops surveyed reported that the M249 had simply stopped firing during combat, which is probably not the best thing when some insurgent is trying to take you out!

UPDATE: Maybe this should actually be called a quadumvirate! The Army has announced that it is recalling 44,000 advanced combat helmets manufactured by Hebron, OH-based ArmorSource LLC. Apparently the helmets (already issued to soldiers worldwide) do not meet military specs. So now, it looks like tax dollars are being spent to send soldiers out in helicopters with inadequate armor to fight with guns that don't shoot while wearing helmets that may not offer enough protection!

This article is brought to you by The Qui Tam Team, 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.

In looking at the top 27 FCA cases, 93% of them have to do with some type of healthcare fraud. In fact, among the top 5 FCA cases, each one is related in some way to the healthcare industry.

At the top of the list is drug-making mastodon Pfizer. In the fall of 2009, Pfizer agreed to pay $2.3 billion to settle claims, including claims brought under the FCA. $1.3 billion of the settlement constituted criminal penalties. This penalty sounds like it would be the final straw for Pfizer, but when you consider Pfizer's 3rd quarter 2009 profit alone was $2.88 billion, you have to wonder whether even an enormous fine like this is enough to deter a drug company from potentially engaging in fraud.  Pfizer was sued for allegedly marketing certain popular drugs like Bextra and Lipitor for unapproved uses. The company made huge profits off of these drugs, and legal experts are not convinced that fines will prevent drug makers from going down the same road in the future.

The FCA keeps drug companies on their toes, but it remains to be seen whether fraud will be completely eliminated.  Our society does love its drugs--prescription drugs are so ubiquitous that they are even showing up in trace amounts in public drinking water supplies--and as long as profits outweigh fines, the temptation to engage in fraud to increase those profits will probably endure.

This article is brought to you by The Qui Tam Team, 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.

The NEJM study examined the experiences of 42 pharmaceutical whistleblowers, and an interesting profile of the whistleblowers emerged.  All but six of the relators in the study did not specifically intend to use the qui tam mechanism when they decided to seek legal redress for the frauds they observed. Rather than being motivated by collecting a monetary reward, the main motivations of the whistleblowers were integrity, altruism  or public safety, justice, and self-preservation.

The whistleblowers shared certain common experiences in bringing frauds to light. Most of the whistleblowers became active participants in the investigation, such as by wearing a wire.  The whistleblowers also reported spending inordinate amounts of time working on the investigation, sometimes meeting with FBI agents in risky locations or being forced to devise hasty covers for agents visiting the whistleblower's workplace on short notice. Many relators were frustrated with the government at various points during the investigation.

Another common theme among the relators was the personal toll of becoming a whistleblower. Most of the whistleblowers reported experiencing financial difficulties. Some experienced divorce or other family problems. In addition, whistleblowing took a physical toll, with several whistleblowers reporting health problems ranging from asthma to migraines.

When it was all over, most of the relators felt that what they did was important for ethical or psychological reasons, despite dissatisfaction with the financial reward. Notably, the advice offered to potential whistleblowers by some of these seasoned, war-weary whistleblowers? Hire an experienced attorney!

This article was sponsored by The Qui Tam Team, 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.