Articles Posted in Whistleblower law

The United States has imposed new sanctions on Irans complex and extensive shipping that it uses to sell oil, and the U.S. will pay $15 million to anyone with information that disrupts the scheme. The reward could be rendered to individuals living within or outside the United States.

The Treasury Department placed sanctions on 26 individuals and “entities” affiliated with the Islamic Revolutionary Guards Corps Quds Force. The sanctions freeze any assets within the United States concerning those individuals or corporations affiliated with the shipping network. It also prevents them from doing business with Americans. It also identified 11 ships, placing anyone who owns or operates them on a Treasury list and exposing any port that lets them in, or firms that fuel or offload them, to future sanctions.

 Rostam Ghasemi, Iran’s former minister of petroleum oversees and operates the network.

 International SOS Assistance, Inc., International SOS Government Services, Inc., International SOS, LP, Air Rescue Americas, Inc. Arnaud Vaissié; and Pascal Rey-Herme (collectively, “International SOS”), will pay $940,000 settling allegations that it overcharged TRICARE, the health care insurance system for members of the military services and their families. The overcharges related to aeromedical evacuation services by concealing discounts it received from third-party air ambulance providers in violation of the False Claims Act.

International SOS, is a provider of overseas healthcare services for the government and it had negotiated discounts from third-party air ambulance providers, which it was required to pass along to TRICARE. Instead, International SOS did not disclose the actual cost of the aeromedical evacuation services during the quoting process; billed TRICARE at the higher non-discounted amount; and received payment from TRICARE for the inflated costs, which International SOS contends it retained as a fee.

This settlement resolves allegations in a lawsuit by a former International SOS Regional Flight Desk Manager, under the qui tam (or whistleblower) provisions of the False Claims Act. The qui tam provisions permit private parties to sue for false claims on behalf of the government and to receive a share of any recovery. The relator here will receive $165,000 as his share of the recovery in the case. The relator was represented by Franklin J. Rooks, Jr., Esq. of Morgan Rooks, P.C., and Jared A. Jacobson, Esq. of Jared Jacobson Law, LLC.

Individuals who are citizens of any country inside or outside the United States, who have information concerning fraudulent billing, foreign bribes, securities fraud, tax evasion or military contract fraud may become whistleblowers under U.S. laws and may be eligible for rewards for revealing the fraud.  For example, in May of this year, a former orthopedic surgeon from Brazil received an award of $4.5 million for information which he rendered to the Securities & Exchange Commission regarding violations of the U.S. Foreign Corrupt Practices Act involving bribes to public officials in Brazil and Mexico to obtain business. Under the SEC rules, whistleblowers are entitled to between 10% and 30% of the monetary recovery when it exceeds more than $1 million.Zimmer Biomet Settlement

Perhaps the most famous international whistleblower to date to receive an award in the U.S. for revealing fraud is Dinesh Thakur, a chemical engineer who worked for a Pharmaceutical manufacturer in India called Ranbaxy. Mr. Thakur revealed that the company falsified essential data about the safety of Ranbaxy drugs and he reported this to the U.S. FDA. Based on this information and a detailed investigation, the company pleaded guilty to criminal felony charges and paid $500 million in fines and settlements. Mr. Thaur eventually received $48.6 million for his role in revealing this fraud.

In a separate case, the U.S. Government criminally prosecuted and obtained more than $1 million from British defense contractor ECL Solutions Limited, Inc. (“ECL”) thanks to the help of whistleblower Todd Mihajlovic from the United Kingdom. Mr. Mihajlovic, a former employee of ECL, reported that ECL hid the fact that the steel racking systems it sold to the U.S. military were made in China. This deception enabled ECL to pass off its shelving product as compliant with the Buy American Act and Trade Agreements Act when, in fact, it was using prohibited Chinese steel.

Americans with offshore accounts are being advised to apply immediately as the US Internal Revenue Service’s (IRS) Offshore Disclosure Programme (OVDP) is due to end September 28, 2019

American citizens with a foreign bank account have until September 28 to voluntarily disclose worldwide income, including interest, foreign earnings, wages, dividends and other income. The IRS’ Offshore Voluntary Disclosure Programme (OVDP) ends on 28 September, and some people are rushing to get in, as it offers some protection from severe penalties. The IRS is encouraging taxpayers who need to disclose non-compliant and unreported foreign accounts and assets to come forward before the September deadline. Qualifying taxpayers who have unreported foreign accounts can still use the OVDP to come into compliance while avoiding the risk of criminal prosecution and minimizing otherwise applicable civil penalties, but only until that date. The statute of limitations is six years. Plus, the statute of limitations never expires on tax fraud, so the IRS can pursue the citizen many years later for back taxes, interest and penalties.

For those who failed to report income, the civil liability to the IRS can include a 20% accuracy-related penalty or a 75% civil fraud penalty.

Universal Health Services announced   a settlement of federal civil complaints against its behavioral health facilities for $127 million, pending federal approval.

The hospital chain said it reached the agreement with the U.S. Department of Justice’s Civil Division and on behalf of various states’ attorneys general. It will resolve accusations against the company’s behavioral health facilities. The agreement is still subject to requisite approvals and the execution of a definitive settlement and related agreements, according to UHS.

UHS also said the DOJ’s Criminal Fraud Section has closed a separate investigation into the company’s operations. UHS Spokeswoman Jane Crawford said the DOJ did not file charges against UHS at the close of that investigation.

The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has issued an Advisory for the civil aviation industry, including parties providing services to that industry warning them not to engage in or support unauthorized transfers of U.S. origin aircraft or related goods to Iran or those who do business with Iranian airlines. The potential sanctions and prosecutions could be significant for violations.

The Advisory has an interesting section relating to financial institutions relating to the unauthorized purchase, sale, delivery or provision of goods or services to Iran, its Government, its airlines even if the transactions are conducted wholly outside the United States.

“…Foreign financial institutions that knowingly conduct or facilitate significant financial transactions for or on behalf of certain designated Iran related persons…may be exposed to sanctions… which may include loss of access to the U.S. financial system.

Dr. Vasso Godiali, a vascular surgeon from Michigan, has been charged in connection with a $60 million health care fraud scheme. In addition to these charges, Godiali is also being charged for laundering over $49 million that he profited from the scheme. According to a press release by the Department of Justice, Godiali’s health care fraud scheme revolved around the submission of fraudulent claims for the placement of stents for dialysis patients, as well as arterial blood clot treatments. Through this scheme Godiali was able to manipulate medical billing software to receive higher reimbursements from Medicare, Medicaid, and Blue Cross Blue Shield of Michigan than his services would normally qualify for. Godiali is also accused of submitting claims for services that he never performed, and for falsifying the complexity of numerous procedures that were performed. 

Godiali is also facing charges regarding over $49 million that he allegedly laundered across six corporations using his profits from the health care fraud scheme. These funds were mainly used towards investment accounts which were held at well-known financial institutions. However, Godiali also used these funds to pay property taxes on a residence he owned on Houghton Lake in Michigan. 

“This is a large, significant and important prosecution. Health care fraud schemes, such as the one alleged to have been committed by Dr. Godiali, divert millions of dollars from public programs intended to help those in need for the sole purpose of lining the pockets of greedy doctors,” commented United States Attorney Matthew Schneider.

According to a recent report, two whistleblowers have earned a total of $2 million in awards for information they provided that instigated an investigation by the CFTC. The whistleblowers participated in a variety of interviews and provided incriminating documents that proved that several violations of the Commodity Exchange Act had taken place.

“This award demonstrates how whistleblowers can play an integral role in our investigations and be rewarded for their significant contributions,” stated Christoper Ehrman, director of the CFTC’s Whistleblower Office. He added, “It often takes integrity and courage to report specific, timely, and credible information about misconduct, and such information enhances our ability to police the markets.”.

Under the Whistleblower Program, which was established in 2010, the CFTC has awarded over $90 million to individuals who have decided to come forward with information regarding suspected fraud. In total, whistleblowers participating in this program have helped to earn over $730 million in sanctions.

There are companies in China which offer services to Chinese companies to transship their products to other nations such as Malaysia in order to evade U.S. tariffs and re-label them as if they came from Malaysia, Vietnam, Cambodia, Mexico and other nations. One such company is Settle Logistics which stated on its website “…For those unfair trade barriers targeting our industries from certain countries, we can adopt other approaches to bypass trade tariffs to expand markets,” according to the New York Times. Another Chinese company CT-Chan also promises that it can help manufacturers avoid American tariffs. “Product requirement: Do not have ‘Made in China logo” said its website.

Yet another company, Top & Profit International Forwarding in Shenzhen says that it is “breaking the barriers of international trade and anti-dumping to let Chinese products enter international markets successfully” Settle Logistics in Hangzhou says that it works with a factory in Malaysia and can obtain Malaysian certificates of origin for goods made in China.

Shipping goods from China to Malaysia costs $3,000 to $4,000 per 40-foot shipping container which is about $2,000 more than shipping directly to the U.S. There are additional costs for Malaysian certificates of origin and packing and unpacking the goods in different containers.

Middlesex Rheumatology Physician Admits To Medicaid Fraud By Submitting False Claims Regarding Remicade Drug Use

Crispin Abarientos, M.D., of Middletown, Connecticut, pleaded guilty to one count of health care fraud in Hartford federal court. According to court statements, Abarientos was a physician that operated out of Middlesex Rheumatology and submitted false claims to Medicaid regarding the use of the drug Remicade on behalf of his patients.

Remicade is primarily used to treat rheumatoid arthritis, and is a drug that was commonly prescribed to Middlesex Rheumatology patients. When Medicaid patients are treated with Remicade the prescribing physician is required to submit claims to their local Medicaid facility, in this case Connecticut Medicaid, on their behalf. Medicaid then pays a partnered pharmacy for the requested drugs, which are then delivered to the prescribing doctor’s facility.