Tax Court Sheds Light on Whistleblower’s Denied Award

July 26, 2013

What can whistleblowers do when the IRS Whistleblower Office denies them an award for helping the government to recover money from a suspected tax cheat?

They can do what Albert G. Hill, III, did — challenge the denial in tax court.

But such challenges are difficult without access to information that the IRS used to deny the award in its often-opaque decision process. In Mr. Hill’s case, the IRS took a common — yet extreme — position on taxpayer confidentiality, refusing to allow Mr. Hill to review documents from the administrative file of the taxpayer he had targeted.

This week the U.S. Tax Court ordered the IRS to hand over the documents under strict conditions — and, in doing so, provided a sensible model for how such appeals should be handled.

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Tax Court Blasts IRS for ‘Obfuscation’ in Whistleblower Case

May 13, 2013

In an unusually blunt opinion, the U.S. Tax Court rebuked the Internal Revenue Service for continuing to fight award claims made by two anonymous whistleblowers — even as the agency was reopening the same claims in a related investigation.

In a dismissal order issued on May 10, 2013, Judge Maurice Foley slammed the IRS for providing “incomplete, misleading, and possibly inaccurate information” in the case.

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After Blowing Whistle on Itself, Utah Hospital Chain Agrees to Pay $25.5 Million

May 07, 2013

Utah’s Intermountain Healthcare Inc. will pay $25.5 million to settle claims that it violated federal laws, including the Stark Law against profit-driven referrals by doctors.

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Tech Supplier Pays $5.66 Million to Settle Claims of Overbilling, Trade Violations

April 17, 2013

A big technology distributor will pay $5.66 million to settle a whistleblower’s claims that it overbilled and underpaid the U.S. government — and also sold it Chinese-made products, in violation of federal trade law.

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University of California Pays $1.2 Million to Settle Medicare Fraud Claims

April 17, 2013

The University of California will pay $1.2 million to settle a whistleblower’s claims that one of its teaching hospitals submitted false Medicare and Medicaid claims.

Dennis O’Connor, a former professor and anesthesiologist at U.C. Irvine (UCI), will receive $120,000 for his role in the case; the remainder goes to the U.S. government. In his lawsuit, Dr. O’Connor alleged that UCI routinely gave patients anesthesia without a doctor being present, in violation of federal requirements.

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Arizona Hospice Will Pay $12 Million to Settle Claims It Treated Ineligible Medicare Patients

April 16, 2013

An Arizona hospice company will pay $12 million to settle charges that it bilked Medicare by inflating bills and admitting patients who weren’t ready for end-of-life care.

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Obama’s Budget Plan: Protect IRS Whistleblowers from Retaliation

April 16, 2013

President Obama’s proposed budget for fiscal 2014 includes good news for whistleblowers: Under his plan, the law finally would protect people who report tax cheats to the U.S. Internal Revenue Service (IRS).

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Supreme Court Confirms Lower Hurdle for Investor Fraud Suits

April 15, 2013

The U.S. Supreme Court made it easier for investors to gain class-action status when suing companies for securities fraud, making such lawsuits more likely in the future.

In Amgen v. Connecticut Retirement Plans and Trust Funds, the Court allowed class certification to be granted on a “fraud on the market” theory without any proof that a company made a “material misrepresentation” in its public statements; plaintiffs may merely assert the fraud.

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First False Claims Act Tax Recovery in New York; Whistleblower Awarded $1.1 Million

April 15, 2013

A well-known New York City tailor pled guilty to tax-evasion charges and separately agreed to pay $5.5 million to settle a related whistleblower case brought under New York State’s False Claims Act (FCA).

The whistleblower, Vijay Tharwani, a former employee of the tailor, will receive $1.1 million of the settlement.

The case marked the first time the state’s recently strengthened FCA has been used successfully in a tax case; in 2010, New York became the first state to authorize citizens to sue tax cheats on its behalf.

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Fairfax Nursing Center Pays $700,000 Settlement for Submitting False Claims for Medicare Reimbursement

February 22, 2013

Fairfax Nursing Center (FNC), a skilled nursing facility in Fairfax, Virginia, and its owner have agreed to pay $700,000 to settle allegations of submitting false claims to Medicare for non-reimbursable rehabilitation therapy services. The False Claims Act lawsuit was filed in the U.S. District Court for the Eastern District of Virginia by two former FNC therapists and one former contract therapist.

The lawsuit alleges that between January 2007 and December 2010, in order to capture higher reimbursements from Medicare, FNC provided excessive, medically unnecessary, or otherwise non-reimbursable physical, occupational, and speech therapy to thirty-seven Medicare patients. Furthermore, the services that were rendered were unreasonable and completely unnecessary for the treatment of the patients’ conditions.

Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice, stated:

“Today’s settlement is another example of the Department’s efforts to hold skilled nursing facilities accountable for the rehabilitation therapy services they deliver to some of the most vulnerable in our society… The provision of excessive and medically unnecessary therapy services will not be tolerated.”

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.