Archive for July, 2013

Media Coverage of James Hoyer’s Defense Contractor Whistleblower Settlement

wtsp-elaine-ferner1Media outlets across the country reported the news of James Hoyer’s nearly $6 million settlement against defense contractor Science Applications International Corporation (SAIC). James Hoyer Partner Elaine Stromgren is pictured here being interviewed by Tampa CBS affiliate WTSP.

This is a rare case of an active duty military officer blowing the whistle on an improper deal condoned by his superiors. Whistleblower Lieutenant Colonel Timothy Ferner bucked the chain of command putting his career on the line to expose the fraud, waste and abuse.

WTSP Investigative Reporter Mike Deeson talked to Lt Col Ferner, who now lives on an alpaca farm in News Zealand, via Skype.  Watch his report below or click here to read the online version of WTSP’s story.

More coverage:

The Las Vegas Review Journal’s story is here.

The Las Vegas Review Journal did an in-depth follow-up report taking a look at Ferner’s case. Click here to Keith Rogers’s story “Coalition and Irregular Warfare Center shows little for $42 million effort.”

The Tampa Bay Times story on the SAIC settlement can be read here.

Click here for a report in the Federal Times.

Lt Col Ferner’s hometown newspaper, the Wilkes Barre Times Leader,  filed this report in which his father calls him “a real hero.”

Here’s the story from the Washington Post.

Click here for the story from Alabama Media Group Newspapers– The Huntsville Times, The Birmingham News & Mobile Press-Register.



James Hoyer Announces Settlement of Qui Tam Case Involving Military Relator

First Lady Laura Bush & Air Force Lt Col Timothy Ferner

First Lady Laura Bush & Air Force Lt Col Timothy Ferner

James, Hoyer, Newcomer & Smiljanich, P.A. is proud to announce the $5.75 million settlement of a qui tam case against Science Applications International Corporation (SAIC), a government defense contractor.  James Hoyer had the privilege of representing Air Force Lt. Col. Timothy Ferner in this whistleblower case, which was filed in 2010.

Click here to read the James Hoyer press release for complete information about the settlement and Lt. Col. Ferner’s role in the case.

Military relators can be whistleblowers, but may face unique challenges in bringing their cases.  To learn more about members of the military acting as relators in qui tam cases,  click here for a blog post by lead attorney and James Hoyer partner Elaine Stromgren.


James Hoyer Firm Announces $5.75 Million Settlement in Military Whistleblower Case

PhotoTimothy Ferner and Laura Bush

First Lady Laura Bush & Lt Col Timothy Ferner

Major defense contractor Science Applications International Corporation (SAIC ) agreed to pay the U.S. government nearly $6 million to settle allegations that it circumvented the bidding process and induced the Air Force to award the company lucrative contracts.  The settlement is the result of a rare case of an active duty military officer blowing the whistle on an improper deal condoned by his superiors.   Air Force Lieutenant Colonel Timothy Ferner, a career military man who is represented by the James Hoyer Law Firm, filed the whistleblower suit in 2010.

“This was a case of fraud, waste and abuse involving taxpayer money that one military officer refused to accept. It’s been a frustrating and life changing ordeal for Lt Col Ferner, but we salute his effort to expose wrongdoing, even though it put his career on the line by bucking the chain of command,” said James Hoyer Partner Elaine Stromgren. “We’re hopeful that shining a light on these issues will help to deter this from continuing to happen in the future.”

Rare Case of Military Officer Blowing the Whistle

Lt Col Ferner was Chief of Staff for the Coalition and Irregular Warfare Center at Nellis Air Force Base in Las Vegas when SAIC was awarded a multi-million dollar contract in 2007 to help CIWC develop enhanced warfare capabilities in the fight against terrorism.  Lt Col Ferner became suspicious that normal contract procedures were bypassed and was alarmed that his military supervisors condoned and wanted to cover up the violation.

Misrepresentations centered on a middleman based in Tampa, Florida, used by SAIC to arrange and manage the CIWC contract.  The broker agent claimed to be a high ranking government official who had authority to bypass the bidding process, none of which was true.  As a result, SAIC inappropriately obtained the contract, submitted more than 360 invoices, and received millions of dollars in improper government funding.

In addition, Lt Col Ferner continued to witness waste and abuse by SAIC in executing the contract.  “We were basically paying guys to sit around at computers and play games,” he said.  “The more contractors that came in, the less work that got done.  And the more that that occurred, the angrier I got, because we were not being good stewards of the taxpayers’ money.  It was wrong. It was illegal and it was immoral.”

Lt Col Ferner reported his concerns up the chain of command, but his efforts to expose the wrongdoing were rebuffed.  He was told to keep quiet.  When he wouldn’t, he eventually faced retaliation. His superiors threatened to deploy him to Afghanistan while he was undergoing cancer treatment.  Ultimately, Ferner was fired from his job and relegated to a menial position with little to no responsibility.

“There was no honesty and integrity in the whole process that I was observing.  I didn’t know if I was going to die when I had cancer, but I wasn’t going to allow my name to be tarnished and potentially associated with this fraud.” Ferner said.

Revolving Door from Military to Defense Contractors

Lt Col Ferner says he believes the revolving door between military leaders and government contractors contributed to the atmosphere that made this waste and abuse possible. “If you keep your mouth shut, you can set yourself up for a high paying job at one of these, giant, defense, contracting companies– especially when you’re close to retirement.  We call them ‘ROADY’S,’ he explained. “Retired on Active Duty.  Don’t make any waves.  Just coast until you retire and you’re all set.”

The whistleblower suit, U.S. ex rel. Ferner v. SAIC, et al., was filed in U.S. District Court in the Middle District of Florida and was joined by the Department of Justice.  As a reward under the False Claims Act for exposing fraud against the government, Lt Col Ferner received a portion of the nearly   $6 million SAIC paid back to the government.

“Lt Col Ferner chose to reject silence and do the right thing and his actions have made a difference.  As a result of this, the government has made changes to prevent this from happening again,” said Attorney Stromgren.

Lt Col Ferner retired early from the Air Force in 2010 and moved to New Zealand, his wife’s native country.  Today, he lives on a 25 acre alpaca farm and is taking classes at a local university there.

UPDATE: September, 11, 2013— The U.S. government has announced a settlement with the middleman at the center of a wide-ranging scheme to obtain defense contracts by circumventing the bidding process.  Steven Stallings acted as a broker agent inappropriately securing government contracts for major defense contractor SAIC without going through required contract procedures.  Stallings, who worked for the New Mexico Institute of Mining and Technology at the time, but was based in Valrico, Florida, has agreed to pay the government $105,000 for his role in the fraud.  Stallings settlement comes on the heels of a larger settlement for nearly $6 million with SAIC.

Click here to read more about the Stallings settlement.


Federal Contractor and Subcontractor Employees Now Protected from Retaliation

As of July 1, 2013, a new series of protections came into effect to protect federal contractor or subcontractor employees from being retaliated against for blowing the whistle on fraud, waste or abuse.  In the past, a loophole existed in the retaliation protections such that a contractor or subcontractor employee could blow the whistle on fraud, waste or abuse and could simply be fired for their reporting without any avenues for relief.  The employee was only protected if he or she actually went to a government office with a complaint, which may have meant circumventing the employee’s chain of command.

As part of the National Defense Authorization Act for Fiscal Year 2013, laws are now in place that protect federal contractor or subcontractor employees from termination or harassment after reporting fraud, waste or abuse within his or her company.

With approximately $1.9 trillion tied up in government contracts, grants and reimbursements annually, the importance of providing a safe avenue of reporting for contractor employees cannot be underestimated.   The purpose behind this new protection is to encourage more of the 12 million federal contractor employees to come forward with their concerns without a fear of retribution.  In 2011 Senate hearings, Maggie Garrison, Dept. of Defense’s deputy inspector general for administrative investigations, acknowledged that the number of complaints is small, but was already beginning to rise, noting “[W]e had about 16 in 2006 and by last year we had 65.”  The number is expected to significantly increase with these new protections in place.

If the Office of Inspector General or an appropriate court finds that a whistleblower faced retaliation and is entitled to relief, the employee is entitled to be made whole – meaning to receive he or she could receive uncapped compensatory damages.

It is very important for potential whistleblowers to recognize that the NDAA 2013 protections are not absolutes.  For examples, tf a person makes complaints are determined to be unfounded, the person may not be considered a whistleblower and therefore would not be protected from negative employment actions.  This is intended to encourage individuals to come forward with actual evidence of fraud, rather than merely using this as a shield in simple employment disputes.  Additionally, there are exclusions in the law for the intelligence community that may be complicated and should be discussed with legal counsel for a complete assessment.

It is also important for whistleblowers to remember that the protections are in effect for contracts or task orders that are signed after July 1, 2013 – not for whistleblowing on existing contracts after the effective date.  Thus, if a contractor or subcontractor employee makes a report regarding a contract existing prior to July 1, 2013 (and that was not modified to include this new clause), the new protections will not be in effect.

If you are an employee of a federal contractor or subcontractor who has made a report of fraud, waste or abuse to your superiors, or if you are considering making such a report and would like to discuss the protections available to you, please contact the James Hoyer law firm for an evaluation of your case.  Click here for more information about the firm and to submit your information electronically, or you may contact our office at 813-397-2300.

Written by Jillian Estes


James Hoyer Investigator Speaks at Investigative Reporters & Editors Conference


2013 IRE Panel on Whistleblowers
From left: Angie Moreschi, David Corn, Pia Malbran

James Hoyer Investigator and Communications Director Angie Moreschi was a speaker at this year’s 2013 Investigative Reporters and Editors’ Conference in San Antonio, Texas.  IRE is a grassroots, non-profit organization dedicated to improving the quality of investigative reporting.  Many of the country’s best investigative reporters are members.

Moreschi was on a panel about whistleblowers and protecting sources with Mother Jones Magazine’s Washington Bureau Chief David Corn and CBS News Investigative Producer Pia Malbran.  Moreschi was an award winning,  investigative reporter for 20 years at TV stations around the country prior to joining the James Hoyer Law Firm.

Corporate Whistleblowers

Moreschi’s presentation at IRE focused on corporate whistleblowers and how they’ve become such an important tool in fighting fraud against the government.   Last year alone, the Department of Justice recovered nearly $5 billion in taxpayer money with the help of whistleblower lawsuits– $3 billion of that came from healthcare fraud. Cases range from hospitals over-billing Medicaid/Medicare to pharmaceutical companies promoting drugs for off-label uses.

Moreschi also discussed how whistleblower lawsuits work and the history of the False Claims Act.

The 47% Video

David Corn of Mother Jones is the journalist who broke the story on the Mitt Romney 47-percent video, which came out during the 2012 presidential campaign.  The now infamous video includes Romney’s remarks talking about the 47 percent of Americans he characterized as “victims.”

“All right, there are 47 percent who are with him (President Obama), who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them…These are people who pay no income tax.”

When originally reporting the story, Corn did not reveal the source of the recording, honoring a pledge to protect the person’s identity.  During his IRE presentation, Corn described how he got the exclusive and the evolution of the source’s decision to reveal himself.

Protecting Sources

CBS News Investigative Producer Pia Malbran discussed the importance of protecting sources.  Malbran said it takes a very unique person to come forward and put their livelihood on the line to expose wrongdoing.  She stressed the need to be extra sensitive to their difficult situation when reporting on their stories.



How the False Claims Act is Benefiting All Taxpayers

“Vigorous enforcement of the False Claims Act not only protects taxpayer dollars; it also protects the integrity of important government programs on which so many of us rely.” — Acting Associate Attorney General Tony West, Department of Justice

When the Government is defrauded, the taxpayers are defrauded.  President Lincoln recognized this when he signed the False Claims Act in 1863 to fight the businesses that were selling fraudulent goods to the Union army. Over time, the “Lincoln Law”—as it came to be known—was watered down and became nearly obsolete until Senator Charles Grassley of Iowa and Representative Henry L. Berman of California revived the law in 1986. Since that bi-partisan achievement, the False Claims Act (”FCA”) has become our most effective and aggressive weapon in battling fraud against the taxpayers.

Now, the FCA is even helping us manage our nation’s budget, by punishing fraudsters and recovering the tax dollars they stole from the public.  Not only does enforcement of our whistleblower programs result in the taxpayers being reimbursed, it also deters any future cheating of government programs. The Justice Department secured $4.9 billion in settlements and judgments in civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2012—the most successful year in the FCA’s history.  Much of the recent recoveries has been in the area of health care fraud, where business continue to fraudulently bill Medicare, Medicaid, and other government healthcare programs. During the past four years, the government has recovered a total of $14.9 billion in Medicare fraud money, due in large part to the 2010 amendments to the FCA—all to the benefit of the taxpayers. In fact, the Department of Health and Human Services Secretary Kathleen Sebelius recently credited the FCA as part of the reason Medicare solvency has been extended by two years in the annual trustees report.

Having a strong and effective False Claims Act is essential to policing those who wish to raid the public fisc.  As Congress continues to encourage our citizens to expose fraud against the government, either through the FCA or by creating Whistleblower Offices within the Securities and Exchange Commission or Internal Revenue Service, it won’t just be whistleblowers who will benefit—all taxpayers will benefit.

If you believe you have information regarding fraud against the government and are considering bringing a False Claims Act case, please contact James Hoyer for an evaluation of your claims.  Click here for more information about the firm and to submit your information electronically, or you may contact our office at 813-397-2300.

Written by Sean P. Keefe