Tuesday, September 25, 2012

Rewards to offset the risks of blowing the whistle

Despite the draw of large whistleblower rewards distributed by the government recently, like the $104 million awarded to Brad Birkenfeld for exposing secrets about Swiss banking to the IRS, a recent New York Times article warns potential whistleblowers to seriously consider the burdens that accompany blowing the whistle before they proceed.

“It’s a life-changing experience,” said John R. Phillips, founder of the law firm Phillips & Cohen and the man credited with devising the amendments that strengthened the government antifraud law, the False Claims Act, in 1986. “If you look at the field of whistle-blowers, you see a high degree of bankruptcies. You may find yourself unemployable. Home foreclosures, divorce, suicide and depression all go with this territory.”

The personal and professional risks that whistleblowers take are a big reason Congress created programs that reward whistleblowers. Under the False Claims Act and the Dodd-Frank law, whistleblowers who file “qui tam” cases or file claims with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) not only receive monetary rewards if there is a recovery but also job protection.  

Friday, September 21, 2012

Sodexo settlement paved the way for Compass Group USA's $18 million settlement

Foodservice management company Compass Group USA has paid $18 million to the state of New York to settle charges that it cheated New York schools for more than seven years by pocketing rebates from food vendors rather than passing those credits on to New York schools. 

The investigation by the New York Attorney General’s office and subsequent settlement with Compass Group USA is due in large part to a “qui tam” lawsuit against foodservice management giant Sodexo, filed by Phillips & Cohen LLP on behalf of whistleblowers under the New York False Claims Act.

Sodexo, like Compass Group USA, was charged with illegally pocketing vendor discounts, or “off-invoice rebates,” and in July 2010 agreed to pay $20 million to settle charges. After the Sodexo settlement, the New York Attorney General’s office launched an investigation into rebate practices by Compass Group USA and other foodservice companies. The Sodexo settlement remains the largest non-Medicaid settlement under the New York False Claims Act.  

Thursday, September 20, 2012

Erika Kelton named "Whistleblower Lawyer of the Year"

Whistleblower attorney Erika Kelton, of Phillips & Cohen LLP, was named the 2012 “Whistleblower Lawyer of the Year” by a leading national whistleblower organization last week.

Kelton was awarded the honor by Taxpayers Against Fraud (TAF) for representing two whistleblowers in a qui tam lawsuit against GlaxoSmithKline, a case that contributed significantly to GlaxoSmithKline’s record-setting $3 billion settlement with the U.S. government in July.  

Kelton has represented whistleblowers in two of the largest health care fraud settlements in U.S. history: the Glaxo settlement, and Pfizer’s $2.3 billion settlement in 2009, which covered civil and criminal charges for the “off-label” marketing of the drug Bextra. 

In addition to her work on these monumental whistleblower cases, TAF also lauded Kelton’s work in helping to create and set up whistleblower reward programs at the Commodity Futures Trading Commission, the Securities and Exchange Commission and the Internal Revenue Service

Thursday, September 06, 2012

Retaliation against whistleblowers rising

Retaliation against whistleblowers is on the rise, according to a report by the Ethics Resource Center.  “Retaliation: When Whistleblowers Become Victims” notes dramatic increases in various forms of reprisal against those who report unethical behavior, including physical violence, job retaliation, and assaults on whistleblowers’ physical property. 

The report attributes the rise in retaliation to heightened stress levels in the work place due to mergers, layoffs, and a struggling economy.

The report didn’t discuss the various government programs that protect and reward whistleblowers: Qui tam cases under the False Claims Act for individuals who report fraud against the government, and whistleblower programs at the Securities and Exchange Commission, the Internal Revenue Service and the Commodity Futures Trading Commission. For more details about whistleblower job protection and rewards under those programs, see www.phillipsandcohen.com.