Tax Informant Dodged Prison, Now Seeks $22 Million Reward

Crossed_Gavels.svgA man caught in a money-laundering sting who later helped the U.S. prosecute a foreign business is now looking for millions from the government as a reward.

The Internal Revenue Service earlier denied the claim, but this week the U.S. Tax Court ruled in favor of the informant. According to Accounting Today:

The court’s opinion doesn’t identify the business or the informant, but the $74 million penalty and other details cited in the case match the allegations in the U.S. case against Wegelin & Co. Wegelin, formerly Switzerland’s oldest bank, pleaded guilty in 2013 to helping Americans hide $1.2 billion in assets from the IRS.

Details about the informant who is seeking the reward correspond with those in a separate case involving Stefan Seuss, a German living in Florida who was indicted in 2009 in Philadelphia after agreeing to help an undercover agent hide profits from a pirated-CD business. He pleaded guilty in 2010, and his indictment says he was “associated” with Wegelin.

Click here for the full story: http://www.accountingtoday.com/news/tax-practice/us-tax-informant-dodged-prison-now-seeks-22-million-reward-74818-1.html

*Disclaimer: The views and opinions on this blog are those of the author. Nothing contained in this weblog is intended as legal advice. This weblog was created to provide general information, opinions of the author and general musings. Accessing this website is not a consultation for legal advice or services and this weblog does not create an attorney-client relationship.

DaVita to Pay $495 Million to Settle Whistleblower Case

(RJ Sangosti, Denver Post file)

(RJ Sangosti, Denver Post file)

This is a very interesting case we wanted to share on the blog. DaVita HealthCare Partners last week agreed to pay up to $495 million to settle a whistleblower lawsuit claiming that the Denver company defrauded Medicare of millions. Though the company settled, it did not admit any wrongdoing.  This is DaVita’s third whistleblower lawsuit settlement in the last three years, with payouts reaching nearly $1 billion.

According to the Denver Post:

The civil suit, filed in Atlanta in 2011, revolves around a claim by Dr. Alon J. Vainer and nurse Daniel D. Barbir, who both worked for DaVita. They noticed that DaVita was throwing out good medicine that it then billed Medicare and Medicaid for, according to the lawsuit.

Vainer and Barbir, who could be paid up to $135 million as part of the settlement, said in court filings that they questioned DaVita about the waste and claimed the company submitted fraudulent claims for reimbursement between 2003 and 2010.

Read more here: http://www.denverpost.com/business/ci_28046592/davita-will-pay-495-million-settle-atlanta-whistleblower

*Disclaimer: The views and opinions on this blog are those of the author. Nothing contained in this weblog is intended as legal advice. This weblog was created to provide general information, opinions of the author and general musings. Accessing this website is not a consultation for legal advice or services and this weblog does not create an attorney-client relationship.

 

 

Whistleblower Awards Stuck in the SEC Pipeline

image003 (1)The Securities and Exchange Commission’s popular whistleblower program vows to move quickly when it comes to acting on tips from whistleblowers. Apparently, it’s not acting as swiftly on paying out. According to the Wall Street Journal:

Of the 297 whistleblowers who have applied for awards since 2011, about 247—or roughly 83%—haven’t received a decision from the SEC, according to data obtained by The Wall Street Journal in response to a public-records request. Some of the award claims have been delayed more than two years.

This could present a serious issue for the whistleblower program if would-be tipsters decide not to come forward because the whistleblower awards are taking too long to come through.

“These claims involve complex issues, many of which are being considered for the first time in the whistleblower program,” said the agency’s enforcement director Andrew Ceresney in a statement reported by the Wall Street Journal. “We remain committed to ensuring the correct result for each claim and processing them as quickly as possible.”

Read more here (subscription required): http://www.wsj.com/articles/sec-backlog-delays-whistleblower-awards-1430693284?KEYWORDS=whistleblower

*Disclaimer: The views and opinions on this blog are those of the author. Nothing contained in this weblog is intended as legal advice. This weblog was created to provide general information, opinions of the author and general musings. Accessing this website is not a consultation for legal advice or services and this weblog does not create an attorney-client relationship.

 

Real Housewives’ Jim Marchese Lands Another Whistleblower Settlement

Photo: Bill Denver for The Wall Street Journal

Photo: Bill Denver for The Wall Street Journal

Most people know Jim Marchese from his role in the reality show “Real Housewives of New Jersey.” But in legal circuits, he’s also known as a corporate whistleblower who has scored big settlements — twice. According to the Wall Street Journal:

The small mortgage firm Mr. Marchese owns in Shrewsbury, N.J., most recently collected $8.5 million for helping kindle the Justice Department’s record $16.65 billion settlement last summer with Bank of America Corp., which was accused of selling shoddy mortgage investments in the run-up to the financial crisis.

Before that, in 2007, Mr. Marchese received $1.6 million after reporting his former employer, a Seattle pharmaceuticals firm now called CTI BioPharma Corp., for allegedly defrauding Medicare.

“I’m trained as an attorney, I’m Sicilian, and I’m from New Jersey,” said Mr. Marchese, 45 years old. “If I see you kick a puppy, I’m going to say something. It’s not within me to not say something.”

Read the full article here (subscription required): http://www.wsj.com/articles/whistleblower-jim-marchese-scores-millions-in-payoutagain-1429695001

*Disclaimer: The views and opinions on this blog are those of the author. Nothing contained in this weblog is intended as legal advice. This weblog was created to provide general information, opinions of the author and general musings. Accessing this website is not a consultation for legal advice or services and this weblog does not create an attorney-client relationship.

 

Whistleblowers to Take Aim at Tech?

Noted whistleblower Eric Snowden. Getty Images.

Noted whistleblower Eric Snowden. Getty Images.

The San Francisco Chronicle is reporting that prominent whistleblower and “qui tam” lawyer Eric Havian is turning his attention to an industry that has not traditionally been targeted by whistleblowers: Silicon Valley.

Armed with new federal laws (plus an old one) and a track record as one of the country’s best whistleblower lawyers, Havian has his sights set on tech, an industry that has long enjoyed a relatively squeaky-clean reputation when it comes to corruption.

But just because Google adopted “don’t be evil” as its motto doesn’t mean people inside the search giant are not capable of ethical or legal lapses in judgment because … well, they’re people. And people love money.

“You just put your finger on what could be the next big wave,” said Havian, a former federal prosecutor who was recently tapped by Constantine Cannon law firm to launch its office in San Francisco. “We haven’t seen many whistleblower claims involving technology firms. But now we’re seeing more government contracts are going to technology companies.”

Havian has a history of big whistleblower settlements against corporations. Will a notable tech firm be next?

Read more here: http://www.sfgate.com/business/article/Prominent-whistle-blower-lawyer-takes-aim-at-6214602.php

*Disclaimer: The views and opinions on this blog are those of the author. Nothing contained in this weblog is intended as legal advice. This weblog was created to provide general information, opinions of the author and general musings. Accessing this website is not a consultation for legal advice or services and this weblog does not create an attorney-client relationship.

Nearly $50 Million In Whistleblower Settlements

Another sensational whistleblower story caught our attention this week.

The Federal government and the District of South Carolina announced that two diagnostic laboratories–Health Diagnostic Laboratory, Inc., of Richmond, Virginia, and Singulex, Inc., of Alameda, California–have agreed on a combined settlement of nearly $50 million to resolve three whistleblower lawsuits.

Scarlett Lutz and Kayla Webster, R.N., two South Carolina residents, brought about this lawsuit while working for a referring physician.

According to the press release at falseclaimsact.com:

The whistleblowers alleged that the companies had used bogus blood draw fees and/or sham process and handling arrangements to induce physicians to refer their patients for expensive tests, which the companies marketed as detectors of cardiovascular disease, diabetes, and other chronic conditions.

Read the full report here: http://falseclaimsact.com/wp-content/uploads/2015/04/DOCS-2834271-v5-Singulex-Press-Release.pdf

*Disclaimer: The views and opinions on this blog are those of the author. Nothing contained in this weblog is intended as legal advice. This weblog was created to provide general information, opinions of the author and general musings. Accessing this website is not a consultation for legal advice or services and this weblog does not create an attorney-client relationship.

DaVita HealthCare Partners Inc. CFO Resigns Amid Another Federal Inspection

Crossed_Gavels.svgFor those who have been following the troubles of DaVita since it settled for $55 million in 2012 after a whistleblower claimed the company had overused a drug in dialysis patients, here is the latest from Bidness ETC:

DaVita HealthCare Partners Inc. (NYSE:DVA) announced Friday the resignation of Garry E. Menzel, CFO since November 2013, as the company grapples with another federal inquiry. Mr. Menzel is expected to stay with the company until a smooth transition of the position takes place to chief accounting officer, James Hilger, on a temporary basis. The changeover will be effective from Monday.

The Denver-based company has been involved in several high-profile federal civil and criminal investigation cases since the past few years. The tarnished corporate image resulting from these involvements is believed to be a one of the reasons for Mr. Menzel’s resignation from the company.

Read the full article here: http://www.bidnessetc.com/38255-davita-healthcare-partners-inc-dva-cfo-resigns-amid-another-federal-inspect/

*Disclaimer: The views and opinions on this blog are those of the author. Nothing contained in this weblog is intended as legal advice. This weblog was created to provide general information, opinions of the author and general musings. Accessing this website is not a consultation for legal advice or services and this weblog does not create an attorney-client relationship.

SeaWorld Whistleblower Appears on Daily Show

Screen Shot 2015-03-30 at 2.11.32 PMWe’ve been seeing a good deal of media coverage about SeaWorld whistleblower John Hargrove who, after more than a decade working in the industry, went public with what he claims are inhumane practices at SeaWorld facilities. We applaud Mr. Hargrove for being brave enough to come forward with this information.

EcoWatch covered his appearance last week on the Daily Show with Jon Stewart:

‘As I became higher-ranked, I saw the devastating effects of captivity on these whales and it just really became a moral and ethical issue,’ Hargrove tells NPR in an interview about the book. ‘When you first start to see it, you first try to say, ‘OK, well, I love these animals; I’m going to take care of them.’ … You think, ‘I can change things.’ And then all these things, of course, never improve and then you start … seeing mothers separated from their calves; you start seeing trainers being killed, and then they blame [the trainers] for their own deaths.’

*Disclaimer: The views and opinions on this blog are those of the author. Nothing contained in this weblog is intended as legal advice. This weblog was created to provide general information, opinions of the author and general musings. Accessing this website is not a consultation for legal advice or services and this weblog does not create an attorney-client relationship.

Source: BNY Mellon nears $700-plus million forex cases settlement

Credit: Reuters

Credit: Reuters

In a stunning admission of corporate fraud, Reuters reports that Bank of New York Mellon Corp. agreed to pay a hefty $714 million to settle overcharging allegations. In addition, the company fired its head of products management and a number of other executives.

“The bank repeatedly deceived its customers and is paying a heavy penalty for it,” Manhattan U.S. Attorney Preet Bharara said in a statement.

This case launched in 2009 when a whistleblower filed a complaint claiming that BNY Mellon made $2 billion over a decade through the alleged overcharging.

Read more here: http://www.reuters.com/article/2015/03/19/us-bny-melln-forex-settlement-idUSKBN0MF1WH20150319

*Disclaimer: The views and opinions on this blog are those of the author. Nothing contained in this weblog is intended as legal advice. This weblog was created to provide general information, opinions of the author and general musings. Accessing this website is not a consultation for legal advice or services and this weblog does not create an attorney-client relationship.

WSJ’s Big Whistleblower Predictions for 2015

Image Credit: Wall Street Journal

Image Credit: Wall Street Journal

Though this piece is behind a Wall Street Journal subscriber firewall, we’d like to share it assuming that some readers might have a subscription. The Journal has some interesting predictions here for employment contracts, whistleblower retaliation, foreign whistleblowers and False Claims Act recoveries.

The free portion of the article begins:

About a year ago, we ran a post positing that 2014 would be huge for corporate whistleblowers on a number of fronts. The experts with whom we spoke then hit the nail on the head: every prediction came true. Here what some whistleblower experts think may happen in the year ahead.

Read more here: http://blogs.wsj.com/riskandcompliance/2015/01/23/the-big-whistleblower-predictions-for-2015/

*Disclaimer: The views and opinions on this blog are those of the author. Nothing contained in this weblog is intended as legal advice. This weblog was created to provide general information, opinions of the author and general musings. Accessing this website is not a consultation for legal advice or services and this weblog does not create an attorney-client relationship.