Archive for 2016

DOJ: $4.7 Billion In Recoveries From 2016 Whistleblower Cases

DOJ Whistleblower Attorneys

DOJ Whistleblower AttorneysThe United States released data last week showing that the Department of Justice (DOJ) recovered more than $4.7 billion in 2016 from settlements and judgments in whistleblower cases involving fraud or false claims against the government. This is the third largest annual recovery in the history of the modern False Claims Act (FCA), which dates back thirty years to 1986. Read More…

 

New Study Proclaims the Value of Whistleblowers

Whistleblowers are getting a pat on the back from a new study by a University of Iowa assistant professor of accounting.  The research by Jaron Wilde shows that these insiders, often former or current employees of a target company, have an impact in getting the companies to change their bad behavior.

New York Times reporter Gretchen Morgenson recently wrote about the study and interviewed Wilde. Here is an excerpt of her article:

For those who doubt that whistle-blowers are a force for good in corporate America — and yes, such skeptics exist — a new study out of the University of Iowa could not be more important. It demonstrates for the first time that financial shenanigans at companies decrease markedly in the years after truth tellers come forward with information about wrongdoing inside their operations.

Federal and state whistle-blower programs that award bounties to individuals providing tips about corporate fraud have grown in recent years. They are increasingly seen as a way to help understaffed regulators enhance their oversight of sprawling and complex corporations.

But the costs to whistle-blowers are high; they often face retaliation from their employers and are unable to find work because they are blackballed in their industry. These very real perils underscore the significance of the new research by Jaron H. Wilde, an assistant professor of accounting at the University of Iowa’s Tippie College of Business; he found a sharp and lasting drop in financial wrongdoing at companies that were subject to whistle-blower investigations.

The incidence of such tips appears to be rocketing. The whistle-blower program at the Securities and Exchange Commission, for example, heard from 4,218 tipsters in fiscal 2016, up 40 percent from the number who came forward in 2012.

Click here to read the rest of Morgenson’s article in the New York Times.

 

Whistleblowers Earn Unanimous Supreme Court Win On Seal Violation Issue

Whistleblower CaseLast week, the Supreme Court issued an 8-0 decision in State Farm Fire and Casualty Co. v. United States ex rel. Rigsby, finding in favor of the whistleblowers a little more than a month after holding oral arguments. As we wrote in November, this decade-old case originates from a property insurance claim made in the wake of Hurricane Katrina. The whistleblowers alleged that although their home was damaged by the hurricane, State Farm intentionally misclassified the damages as flooding in order to hoist the burden of payment on the United States. Read More…

 

SEC Whistleblower Program reports that 2016 was a record-breaking year

SEC Whistleblower Award

SEC Whistleblower AwardOn the eve of Thanksgiving, one thing we can be thankful for is the great year that the SEC Whistleblower Program had protecting the United States markets from fraud. In its annual report to Congress, the SEC detailed several encouraging trends that it experienced in the fiscal year ending on September 30, 2016. Read More…

 

James Hoyer Partner Interviewed about Miami Whistleblower Ruling

Sean P. Keefe - James Hoyer Partner

Sean P. Keefe – James Hoyer Partner

James Hoyer Partner Sean Keefe, an expert on SEC whistleblower cases, lauded a recent Miami appeals court ruling that helps to protect whistleblowers. Florida’s Third District Court of Appeals rejected a lower court ruling that whistlebower protections do not apply to employees who are supposed to report fraud as part of their job description.

Keefe told the legal publication LAW360 that this is good news for whistleblowers.  Here is an excerpt from the article:

The case made waves in the whistleblower community when the trial court’s decision was first handed down, according to James & Hoyer PA attorney Sean Keefe, who said any decision that cuts into the teeth of the False Claims Act, whether at the state or federal level, gets notice among attorneys.

Keefe said the trial court’s ruling, had it stood, “could have created a blueprint” for employers to protect themselves against the reach of the whistleblower statute.

Instead, the Third District handed whistleblowers another tool to fight retaliation that Keefe said could be referenced even in cases dealing with private-sector employees, which are not explicitly covered in the statute.

“It’s good for private citizens too,” Keefe said. “They might have been harmed by this decision had the Third District not ruled this way.”

The case under appeal involved a city of Miami independent general auditor who reported securities violations by the city to the U.S. Securities and Exchange Commission and then aided in the investigation.  Victor Igwe’s contract was not renewed after he reported $38 million in improper transfers intended to improve the city’s bond rating.

Click here to read more in the LAW360 article.

 

 

 

Another “Managed Repair” Homeowners Insurance Nightmare

ABC News in Tampa interviews Morales family about managed repair problems.

ABC News in Tampa interviews Katie and Chris Morales about managed repair problems.

ABC Action News in Tampa told the story of another “managed repair” nightmare for homeowners in Florida. Katie and Chris Morales of Tampa have been battling their home insurance company, Florida Peninsula, ever since problems developed following repairs made to their home due to a water leak. Click here to see the ABC News story.

Florida Peninsula invoked a little known clause in its contract called “managed repair,” which gives the company the ability to take over repair of a homeowner’s property. Many homeowners throughout the state of Florida have found themselves subjected to this, with the repair of their greatest asset essentially hijacked by the insurance company. Insurers use their “preferred providers” to save money and homeowners have little to no say over who repairs their home.

How to Get Help

The James Hoyer Firm, along with attorneys from the Stockham Law Group in Tampa, are teaming up to alert and help homeowners being subjected to this burdensome practice.  It’s important for you to know we believe you should not have to pay any out-of-pocket costs when an insurance company invokes its “right to repair.” That includes your deductible.  Click here to learn more.

Chris and Katie Morales

Chris and Katie Morales

The Morales’ Fight Back

In the Morales’ case, just two months after repair work was completed newly laid wooden floors buckled and a potentially dangerous mold problem developed in the home. Florida Peninsula is denying its contractor’s work caused the problems, but the Moraleses never had problems with mold or moisture before.

Now, the Morales’ have been forced to sue Florida Peninsula to try and get an acceptable resolution to fix the problem. Luckily, Florida law gives homeowners the ability to sue their home insurance company over a claim with no out of pocket costs. These cases are done on a contingency basis, so if you lose, you pay nothing. If you win, the insurance company must pay the homeowner’s attorney’s fees, on top of any damages paid.

If you’ve had a problem with “managed repair,” click here for a confidential case evaluation.

 

Supreme Court Arguments on Seal Seem to Favor Relators

Oral arguments were held before the Supreme Court this week in the case of State Farm Fire & Casualty Co. v. U.S. ex rel. Rigsby.  The decade-old case originates from claims made by Cori and Kerrie Rigsby, sisters from Alabama, who filed a False Claims Act case alleging that State Farm defrauded the government in the wake of Hurricane Katrina.

As background, State Farm was responsible for covering damages caused by windstorms while the United States had a program to pay for damages caused by flooding. The Rigsby sisters allege that State Farm intentionally misclassified windstorm damages as flooding to hoist the burden of payment on the United States.  In 2013, a jury in Mississippi found in favor of the Rigsbys, and determined that the United States had been damaged to the tune of $250,000.  Pursuant to the trebling and penalties provisions of the False Claims Act, the jury awarded the United States $758,000 in damages.

During the course of litigation, State Farm learned that the Rigsbys’ original attorney, Dickie Scruggs, had violated the seal provisions of the False Claims Act by providing information about the lawsuit to three media outlets.  Scruggs provided the information as background to explain the fraud allegations, and the news outlets never disclosed the existence of a False Claims Act case while the seal was in place.  Regardless, State Farm moved to dismiss the case based on the alleged seal violation, but the district court denied the motion.  After the jury verdict in the relator’s favor, State Farm unsuccessfully appealed to the Fifth Circuit, and then to the Supreme Court.

State Farm put before the Court the narrow issue of the appropriate standard for the decision to dismiss a relator’s claims for violations of the False Claims Acts seal requirement.  During the one-hour of oral arguments from counsel for State Farm, the Rigsbys, and the United States of America (in support of the relators), the eight Supreme Court justices appeared unlikely to reverse the Fifth Circuit’s holding and grant State Farm’s request for mandatory dismissal of a case following a seal breach.

All of the justices appeared to be skeptical of State Farm’s drastic approach, particularly given that the seal requirement was put into place to protect the government and the United States has sided with the Rigsbys in this dispute.  Chief Justice Roberts noted to State Farm’s counsel that, “[Y]ou’re arguing the government’s interests, but it rings a little hollow when we see that the government is on the other side.”

John Bash, Assistant to the Solicitor General arguing for the United States, reaffirmed that focus, stating, “[W]e think that the overall focus should be courts should remedy protective orders and seal orders with a healthy dose of discretion, but in light of the purpose of this provision, to protect the government.”  Some justices, including Justice Ginsburg, appeared to suggest that the government’s preference should be the guiding, if not only, consideration as to whether a case should be dismissed following a seal breach.

Several justices asked for suggestions as to how to properly frame a workable standard which would discourage future violations while also allowing for the flexibility for district courts to conduct case-specific evaluations.  The justices also seemed to focus on whether the evaluation should consider the potential for harm versus the actual harm resulting from the breach.  (In the Rigsbys’ case, the newspapers did not print anything about the lawsuit itself, thus mitigating any actual harm from the seal breach.)

This is a very important case for relators because a State Farm victory could put another fatal arrow in the quiver of defendants and their counsel.  If defendants could guarantee a dismissal for even a minor, unintentional seal breach, they would be incentivized to engage in intense, scorched-earth discovery of relators and their counsel to try to find any mention of the lawsuit to a third party.  Fortunately, the Supreme Court seems reluctant to accept such a fatalist position and instead appears poised to set standards for a discretionary test which evaluates the circumstances of each case with an ultimate focus on protecting the government’s interest.

An opinion is due by the end of June 2017, so we’ll post an update as soon as the order is handed down.

 

Skilled Nursing Company to Pay $145 Million to Resolve False Claims Act Case

Whistleblower Case

Whistleblower CaseOn October 24, 2016, the Department of Justice announced a settlement with Life Care Centers of America Inc. (Life Care) and its owner, Forrest L. Preston. The defendants agreed to pay $145 million to resolve a lawsuit alleging that Life Care violated the False Claims Act (FCA) by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled. Life Care, which is based in Cleveland, Tennessee, owns and operates more than 220 skilled nursing facilities across the United States.

“This resolution is the largest settlement with a skilled nursing facility chain in the department’s history,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “It is critically important that we protect the integrity of government health care programs by ensuring that services are provided based on clinical rather than financial considerations.”

The settlement resolves allegations that, between January 1, 2006 and February 28, 2013, Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings. Medicare reimburses SNFs at a daily rate that reflects the skilled therapy and nursing needs of qualifying patients. The greater the skilled therapy and nursing needs of the patient, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for SNFs is for “Ultra High” patients who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, or speech), one of which must be provided five days per week.

In the complaint, the United States alleged that Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the Ultra High reimbursement level regardless of the clinical needs of the patients, resulting in the provision of unreasonable and unnecessary therapy to many beneficiaries. Life Care also sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy, even after the treating therapists felt that therapy should be discontinued.

“The resolution announced today demonstrates the commitment of the U.S. Attorney’s Office to aggressively pursue providers who utilize fraudulent practices to knowingly put their own financial self-interest over a duty to patients,” said U.S. Attorney Wilfredo A. Ferrer of the Southern District of Florida. “It is imperative that providers make healthcare decisions based upon a patient’s need for services rather than a self-serving desire to maximize financial profit. Our office will continue to investigate fraud allegations, in order to ensure that providers do not compromise the integrity of our public health care programs.”

The settlement, which was based on the company’s ability to pay, is a great reminder that employees are given tremendous power under the FCA to rectify fiscal wrongdoing that they observe in the workplace. In this case, the whistleblower reward for filing their qui tam whistleblower lawsuit will be $29 million for relators Tammie Taylor and Glenda Martin.

 

Investigator Jim Ross Describes his Whistleblower Case Philosophy

James Hoyer Investigator Jim Ross made his name as an award winning investigative reporter who uncovered corruption and fraud. The Florida Attorney General’s office then benefited from Jim’s intense commitment and drive, as he continued his investigative work in the state’s Economic Crimes unit. Today, Jim uses his unmatched skills in interviewing witnesses and computer data and document analysis to develop whistleblower cases for the James Hoyer Law Firm.

Jim is guided by an an exemplary work ethic and a commitment to justice. Watch the video below to hear more about his background and the philosophy that makes him one of the firm’s greatest assets.

 

“Managed Repair” of Home Insurance Claims Wreaking Havoc for Homeowners

insuranceBotched repairs, improper mold remediation, additional damage to your home, and extensive delays in getting repairs done.  Those are just some of the problems becoming more and more common for homeowners subjected to “managed repair” by their home insurance companies.

Media Coverage

The James Hoyer Firm, along with attorneys from the Stockham Law Firm in Tampa, are teaming up to help homeowners being subjected to this burdensome practice.  Here are several recent cases where we helped to expose the problems of “managed repair” with local news media:

WPTV TV in West Palm: Homeowners concerned after Florida insurance companies manage repairs

WEAR TV in Pensacola: Homeowner blasts Right to Repair policy for insurance companies

WINK TV in Ft. Myers: Locked out of repairs: a clause that may impact your home insurance claim

WINK TV in Ft. Myers: Homeowner sues insurance company over alleged deceptive practices

WFTS TV in Tampa:  Another Managed Repair Nightmare

Several Florida home insurers have begun to invoke their “right to repair” clause when homeowners file a claim. Insurers will say it takes the hassle away from the homeowner, but as we’ve seen, it often causes more problems for homeowners, rather than fewer.

Right to Repair/Wrong for Homeowners

Essentially, the insurance company takes over the repair of your property when you make a claim, instead of paying you the amount to get the work done with a contractor of your choice. This saves the insurance company money by using one of its “preferred contractors,” but has led to contractors cutting corners, rushing jobs, or creating lengthy delays in completing work.  The homeowner often does not know how much the contractor gets paid or what exactly their deal is with the insurer. The repair of your home is literally hijacked.  It takes away much of the control over who does the work and how it’s done in your own home.

To learn more about this and what you can do about it click here.