Posts Tagged ‘Senator Dick Durbin’

Proposed Improvements to IRS Whistleblower Program

Sen. Chuck Grassley and Sen. Ron Wyden today introduced bipartisan legislation to improve IRS communication with tax fraud whistleblowers and protect those whistleblowers from workplace retaliation, they announced in a news release.

“Whistleblowers have helped the IRS recover more than $3 billion for the taxpayers that otherwise would have been lost to fraud,” Grassley said.  “Whistleblowers have the potential to help even more.  They need assurances that putting their jobs at risk carries protections.  They also need better communication about where their cases stand so they’re not sitting in limbo.  This bill will offer a welcome mat to those who are too often treated like skunks at a picnic.”

“Whistleblowers are a crucial line of defense against waste, fraud and abuse,” said Wyden. “This legislation will strengthen protections for employees of companies who come forward to report tax evasion.  Empowering these whistleblowers is key to rooting out bad actors who are breaking the law by dodging their taxes.”

The IRS Whistleblower Improvements Act of 2017 is based on the Grassley-Wyden amendment included in the Taxpayer Protection Act of 2016.  The Taxpayer Protection Act, along with the Grassley-Wyden amendment, passed the Finance Committee in April 2016 but was never considered by the full Senate.

The measure would: (1) increase communication between the IRS and whistleblowers, while protecting taxpayer privacy, and (2) provide legal protections to whistleblowers from employers retaliating against them for disclosing tax abuses.

To increase communication, the bill specifically would allow the IRS to exchange information with whistleblowers where doing so would be helpful to an investigation.  It would further require the IRS to provide status updates to whistleblowers at significant points in the review process and allow for further updates at the discretion of the IRS.  It does this while ensuring that the confidentiality of this information is maintained.  Whistleblowers have expressed concern and frustration in their inability to receive information from the IRS on the status of their cases, which may take years to resolve.  Since these individuals often put their livelihoods on the line to come forward, poor communication adds to their anxiety and is a disincentive to others with knowledge of high dollar tax fraud.

To protect whistleblowers from employer retaliation, the bill extends anti-retaliation provisions to IRS whistleblowers that are currently afforded to whistleblowers under other whistleblower laws, such as the False Claims Act and Sarbanes-Oxley.  Tax whistleblowers may be easily identified within their firms as having specific knowledge of tax fraud.  Extending the protections to tax whistleblowers that apply to whistleblowers in other fields is a matter of fairness and in the interest of U.S. taxpayers who benefit from such whistleblowing, Grassley and Wyden said.

The IRS Whistleblower Improvements Act of 2017 will be assigned to the Finance Committee, where Grassley is a senior member and former chairman, and Wyden is ranking member.

Grassley successfully enacted much-needed updates to the IRS whistleblower program in 2006.  The improvements have led to the recovery of more than $3 billion in taxes that otherwise would have been lost to fraud.  The IRS has made some progress in improving its treatment of whistleblowers, due to congressional oversight, but challenges remain.  The potential is strong to recover much more in fraud proceeds if the IRS continues to improve its procedures, and Congress delivers the improvements in the Grassley-Wyden legislation.

Two well-known pro-whistleblower groups endorsed the legislation.

“Honest taxpayers are the true victim of every tax fraud.  This reform provides critical protection for those courageous enough to risk losing their jobs to report illegal tax schemes.  The legislation closes a loophole in whistleblower law that currently fails to provide any protection for those who report tax fraud. This bill is urgently needed,” said Stephen M. Kohn, Executive Director, National Whistleblower Center.

“These amendments will significantly strengthen the fraud-fighting potential of the IRS Whistleblower statute and promote the public-private partnerships that the law was originally enacted to foster,” said Robert Patten, President and CEO of Taxpayers Against Fraud.  “In particular, the anti-retaliation provisions will encourage more citizens to come forward and will result in the recovery of significant funds that would otherwise be lost to tax fraud.”

Grassley and Wyden are among the founding members of the bipartisan Senate Whistleblower Protection Caucus.  Grassley is chairman and Wyden is vice-chairman.

 

Attorney General Nominee Pledges Support to Fight Fraud using False Claims Act

Alabama Senator Jeff Sessions is being questioned this week at confirmation hearings on his nomination for U.S. Attorney General by President-elect Donald Trump.  On Tuesday, Senator Sessions pledged his support to fighting fraud against the government and his support of the False Claims Act as a means to do so. Read More…

 

Powerful Senator Calls for Audit of Job Placement Numbers at For-Profit College EDMC

Senator Dick Durbin

U.S. Senator Dick Durbin (D-IL), the Assistant Majority Leader of the Senate, is calling for an audit of what he termed “baseless” job placement numbers reported by Education Management Corporation (EDMC).  Senator Durbin made that request and issued a press release, after reviewing data exposed by whistleblower Jason Sobek, a James Hoyer Law Firm client.

EDMC is the second largest for-profit college provider in the United States.  The company owns The Art Institutes, South University, Argosy University and Brown Mackie College and has more than 150,000 students.  Senator Durbin called for the audit in a letter sent to EDMC’s accrediting agency, the Southern Association of Colleges and Schools (SACS).

Sobek was interviewed by ABC News in a report which investigated questionable job placement statistics reported by the for-profit college company.  Durbin, who was also interviewed in the report, was so concerned he decided to take action by sending the letter, which said, in part:

The lawsuit highlighted in a recent ABC news report against the Education Management Corporation (EDMC) by a former EDMC employee raises serious concerns about the validity of EDMC’s reported job placement rates. I urge you to carefully audit all job placement rates reported by EDMC.

Among the many questionable job placements counted in the data as students successfully working in their field, were an Accounting graduate working as a McDonald’s cashier, a Business Administration graduate working as a Walmart Customer Service Rep, and a Fashion Marketing graduate working as a shoe salesman.

Durbin reviewed the job placement database material and came to this conclusion in the ABC News story:

“It’s just plain fraud and your whistle-blower has brought it to light,” Durbin told ABC News. “These students get sucked in by these ads, sign up for debt, sign up for courses that lead to nowhere,” Durbin says.

In his letter to the SACS, Durbin says he is “deeply concerned” and urges the accrediting body to take action.

Students and families rely on accreditors for the seal of approval you provide. Given the baseless job placement numbers provided by one of EDMC’s schools with SACS accreditation, the Council should re-evaluate current methodology, documentation and reporting requirements for job placement. I urge SACS to audit other schools owned by EDMC to ensure that all of EDMC’s students are working with accurate information about their post-secondary education.

A Federal Magistrate Judge in Pennsylvania recently recommended that Sobek’s case against EDMC move forward. The suit alleges the for-profit college company misrepresented, not only job placement statistics, but also accreditation, and failed to adequately track student academic progress.

The case is a concern for students and taxpayers, because nearly 90-percent of the tuition paid to the company comes from federal loans and grants. Click here to read Senator Durbin’s entire press release.

 

 

For-profit College Whistleblower Interviewed on ABC World News

Whistleblower Jason Sobek

The whistleblower case against for-profit college giant Education Management Corporation (EDMC) was profiled in an investigative report on ABC World News.  James Hoyer Client Jason Sobek was interviewed and explained why he came forward to expose practices he believes are hurting, not only students, but also taxpayers.

Reporter Mark Greenblatt shared internal documents that show EDMC falsely inflated job placement statistics.

“They manipulated the job placement rates by counting students working in a job that they did not need the degree for,” Sobek told ABC News. “In my opinion, it’s a wretched fraud.”

EDMC is the 2nd largest for-profit college operator in the country.  It owns The Art Institutes, Brown Mackie, South University and Argosy University.  Sobek is a former Assistant Director of Admissions who recruited students to sign up for South University Online.

The story also profiles Brown Mackie student Sarah Fisher who graduated with an Associate’s Degree in Business Management.  Fisher works as a Customer Service Representative at Walmart, a job she found on her own while still attending school.  Since graduating, she’s been unable to find a job in her field of study, but internal EDMC documents show the school counted her as a successful job placement.

In addition, the documents Sobek shared show a Fashion Marketing graduate who works as a shoe salesman and an Accounting graduate who works as a McDonald’s cashier were also counted as successful job placements. Sobek believes counting these graduates as successful job placements is misleading.  He says the company uses them to inflate job placement statistics presented to potential students to get them to sign up and get their financial aid dollars.

ABC News asked U.S. Senator Dick Durbin, the Assistant Majority Leader of the Senate, to review the internal EDMC job placement records.  After his review, Senator Durbin issued a powerful rebuke.

“It’s just plain fraud and your whistle-blower has brought it to light,” Durbin told ABC News. “These students get sucked in by these ads, sign up for debt, sign up for courses that lead to nowhere,” Durbin says.

Click here to watch the ABC World News story and to read the online report.  You can also post a comment on the ABC News website.

Click here to watch another investigative report from WTAE TV in Pittsburgh, the hometown for EDMC’s headquarters.