d hargrove slides (sbot - advanced employment law cle jan. 2013)

Update on Whistleblowers in the Age of Stimulus

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Dan HargroveDan Hargrove

1. 2007 – 2011 (a sea change in the law)

1. Update on the False Claims Act

1. Update on the SEC Whistleblower Program

1. Update on the IRS Whistleblower Program

2. What’s new

1. What’s coming

Overview

Qui Tam actions by whistleblowers

Bounty Claims for whistleblowers

Protections for Whistleblowers

2007 – 2011 A SEA CHANGE IN WHISTLEBLOWER

LAW

1. IRS Whistleblower Program created

1. False Claims Act strengthened

1. SEC Whistleblower Program created

1. CFTC Whistleblower Program created

1. Other laws (Dodd-Frank; PPACA; Federal Acquisition Regulation)

2. The Texas Medicaid Fraud Prevention Act strengthened

2007 – 2011

Step 1: The FALSE CLAIMS ACT

Qui Tam

Update on The False Claims Act

What is a Qui Tam Action?

Spotting Qui Tam Cases

Mischarge case:

Doctor bills Medicare for services not actually provided

Spotting Qui Tam Cases

False negotiation:

Contractor bribes government contracting officer to obtain contract

Note: pecuniary harm to the Government is not necessary

Spotting Qui Tam Cases

Fraud Enforcement and Recovery Act of 2009 substantially strengthened the False Claims Act

PPACA loosened the standard who can act as a qui tam relator

Changes to the False Claims Act

2012 WAS A BANNER YEAR FOR THE FCA

BUT THERE ARE STORM CLOUDS ON THE FCA HORIZON

Pattern of federal judges denying DoJ motions to extend the seal period

United States v. Caronia, No. 09-5006 (2d Cir. Dec. 3, 2012) (holding by 2-1 that truthful, non-misleading off-label promotion is constitutionally protected commercial speech)

Update on The Bounty Laws

The IRS Whistleblower Program (Bounty)

Bradley Birkenfeld, a whistle-blower in the tax evasion case against Swiss bank UBS AG, holds a news conference outside the Schuylkill County Federal Correctional Institution in Minersville, Pa., Friday, Jan. 8, 2010, before reporting to the federal prison.

PROPOSED CHANGES TO THE IRS WHISTLEBLOWER PROGRAM

Fed. Reg. Vo. 77, No. 243 (Dec. 18, 2012)

Comments due Feb. 19, 2013

Amended regs would provide guidance:

on submitting claims;factors on payment of awards;the processing of whistleblower claims; andwould authorize the IRS to share tax

information with the whistleblower.

The SEC Whistleblower Incentive Program (Bounty & Whistleblower Protections)

RESULTS OF THE SEC WHISTLEBLOWER PROGRAM

The SEC paid its first bounty claim ($50,000)

The SEC posted 143 Notices of Covered Action in FY 2012

The SEC received 3,011 Tips and Complaints FY 2012

Another Whistleblower Law Enacted

Whistleblower Protection Enforcement Act(amends the WPA)

Expands protection for Government whistleblowers

Protects government scientists who challenge censorship

Provides all-Circuit review (two-year experiment)

Establishes explicit whistleblower protections for TSA employees

Provides compensatory damages for prevailing whistleblowers who prevail after an admin hearing

Makes it easier for OSC to discipline retaliators

What’s on the Horizon

CRIMINAL ANTITRUST ANTI-RETALIATION ACT (CAARA)

Would amend THE ANTITRUST CRIMINAL PENALTY ENHANCEMENT AND REPORT ACT

Would extend whistleblower protection to employees of companies engaged in criminal antitrust conduct

Would protect an employee who reports to the U.S. DoJ Antitrust Division a violation of the antitrust laws (reasonable belief)

CRIMINAL ANTITRUST ANTI-RETALIATION ACT (CAARA)

Would protect a whistleblower who reported other violations committed either in conjunction with an antitrust violation, or during an investigation by the Antitrust Division

Actionable retaliatory action would include discharge, demotion, suspension, threatening, harassing or discriminating in any other manner in the terms of employment

Employees involved in an antitrust or related violation are not protected

If you have questions . . .If you have questions . . .

Dan L. Hargrove, J.D., LL.M.

Waters & Kraus, LLP

(210) 349-0515dhargrove@waterskraus.com

www.govtfraudlawyer.com