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New York Whistleblower And Commercial Litigation Blog

CFTC reports high whistleblower activity, dramatic payouts

Calling it a "transformative year" for its whistleblower program, the Commodity Futures Trading Commission (CFTC) announced recently that it has awarded whistleblowers more than $45 million in rewards for identifying illegal activity. This is a dramatic increase over prior years.

"Whistleblowers have added significant value to our enforcement program by enabling the commission to swiftly identify misconduct and hold wrongdoers accountable," the agency's enforcement director said in a statement. "I expect this trend to continue as the Commission continues to receive increasing numbers of high-quality whistleblower tips."

Settlement: Whistleblower reveals defective bulletproof vests

It was recently reported that a former employee of Second Chance Body Armor, Inc., blew the whistle on that company's sales of defective Zylon bulletproof vests to federal, state, local and tribal law enforcement agencies through the Justice Department's Bulletproof Vest Partnership program and contracts with the General Services Administration. Unfortunately, according to the DOJ, these vests lost their ballistic capability when they were exposed to heat and humidity.

According to the government, Second Chance received $6 million from Toyobo Co., Ltd., the manufacturer of Zylon fiber, which was meant to help correct the degradation issue. Instead of using the money for that purpose, however, the owners of Second Chance allegedly pocketed the money and began meeting with investment bankers in an effort to sell the company.

Self-referrals, lack of documentation lead to $14.7 million case

It was recently reported, that, after four different employees blew the whistle on false and inflated claims to Medicare and Medicaid, two healthcare concerns have admitted responsibility and agreed to pay a $14.7 million settlement. One was Health Quest Systems, Inc., a New York-based family of hospitals and healthcare providers delivering medical, surgical and home healthcare services. The other was Putnam Health Center (PHC), a Health Quest subsidiary based in Carmel Hamlet, New York.

One of the whistleblowers will receive $1,893,092 as a reward. Another will receive at least $875,546, and the other two will share in a reward of $56,266. The four whistleblowers filed three False Claims Act lawsuits which the government later joined. When such lawsuits are successful, the private citizens who initiated them can receive a substantial percentage of the overall recovery.

Veterans Affairs whistleblowers subject to retaliation

When an employee sees something amiss at work, there shouldn't be a reason to stop them from doing something to resolve the issue. Fear of losing work or facing ridicule and mistreatment prevents some employees from speaking up even though they should expect protection for doing so.

Despite federal legal protections for workplace whistleblowers, a new report finds one government agency has a history of retaliating against whistleblowers at alarming rates.

Virtue of patience is vital for whistleblowers

As a concept, whistleblowing is a two-edged sword. Sometimes, both edges are positive. This is perhaps most clear on a field of play under the control of referees. On one hand, when an official blows the whistle, one side or the other faces penalties for breaking the rules. On the other, the whistle stops the action, preventing unnecessary injury to players.

Off the playing field, whistleblowing tends to have positive-negative effects. While acknowledged as essential for fighting fraud and corruption in government and private business, being tagged with the label can prove a burden. As evidence, look up synonyms for whistleblower. The list includes, informer, snitch, mole and tattletale.

Broader appeal routes open for federal whistleblower claimants

Sports teams put a lot of stock in the concept of the home-field advantage. One can argue whether there is any truth to it. Many observers suggest that any edge provided is mainly psychological. Regardless, the topic seems to be a significant point of any contest conversation

This all comes to mind in light of an act recently signed into law. Proponents of the All Circuit Review Act say the intention is to ensure that federal workers who blow the whistle on potential fraud have greater choice of venue if they have to appeal a denial of a claim of employer retaliation.

Company settles major False Claims Act case for $14.4 million

In 2009, the National Energy and Technology Laboratory (NETL) awarded a $14-million cooperative agreement to a company called North American Power Group Ltd. (NAPG) to collect and analyze carbon data and to design and implement carbon sequestration wells in Wyoming. NAPG's owner, Michael Ruffatto, represented the company and authorized its invoices. Between 2009 and 2012, he billed NETL some $5.7 million for project-related costs.

Those claimed costs were fraudulent. Instead of project-related costs, Ruffatto billed for his legal fees, jewelry, car payments, international travel and other personal expenses.

Whistleblower's act brings $550,000 patient dumping settlement

Officials from Los Angeles County recently announced a settlement with Silver Lake Medical Center, a psychiatric hospital in that city, over allegations that the hospital improperly discharged homeless psychiatric patients to avoid the cost of treating them.

"The hospital's blatant disregard for the law and its patients' well-being cannot be ignored or go unpunished," said the LA District Attorney. "Our homeless community deserves to be treated with the same humanity, dignity and respect that any of us would expect, especially from those tasked with our care and protection."

Whistleblower to receive $1,402,500 in False Claims Act case

"When hospices increase their bottom lines by billing taxpayers for unneeded services, they are diverting money from vulnerable, terminally-ill individuals," said a spokesperson for the U.S. Department of Health and Human Services Office of the Inspector General. "Worse yet, these patients may not be receiving care for medical needs that would otherwise be covered in a non-hospice setting."

According to the Department of Justice, a for-profit hospice chain called Caris Healthcare set aggressive admissions and census targets, which are known to be a risk for fraud. In order to meet those targets, the government alleges, Caris admitted and often recertified patients for hospice care even though their medical records did not support the terminal prognosis required for Medicare's hospice benefit.

Hospital to pay $784,000 to resolve False Claims Act allegations

Livingston Regional Hospital, LLC, of Tennessee has agreed to settle a False Claims Act case brought against it in federal court. It will resolve the allegations for $784,000. The hospital is owned by LifePoint Health, Inc., which operates hospitals across the U.S.

According to the U.S. Attorney for the Middle District of Tennessee, two former employees filed suit against Livingston Regional Hospital under the qui tam provision of the False Claims Act. Their lawsuit was later joined by the government.

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