Articles Tagged with Qui Tam

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iStock-513229490-300x200Pilot training program allegedly falsified enrollment figures to obtain millions in Veterans Affairs funding.

Universal Helicopters Inc. and Dodge City Community College have paid $7.5 million to resolve allegations they violated the False Claims Act by making false statements to the U.S. Department of Veterans Affairs in connection with a training program they jointly run for helicopter pilot flight instructors in Ford County, Kansas and Chandler, Arizona.

Universal paid $7 million, while Dodge City paid $500,000—an amount the U.S. Department of Justice noted was based on Dodge City’s ability to pay.

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With the IRS and state tax authorities cracking down on crypto investors and traders, cryptocurrency tax fraud whistleblowers stand to receive significant awardsCryptocurrency tax fraud

Mark A. Strauss Law, PLLC, a whistleblower law firm, is encouraging individuals with information regarding tax evasion in connection with cryptocurrency transactions to contact whistleblower attorney Mark A. Strauss for a free consultation.

In Notice 2014-21, the IRS made clear that convertible digital currencies comprise intangible “property”—just like shares of stock or other financial assets—for tax purposes.   What that means is that when crypto currencies like Bitcoin (BTC), Etherium (ETH), Ripple (XRP) are sold or exchanged—or simply used as a means of payment—the transaction in question is a taxable event.  Capital gains taxes are owed on any price increases realized.  Parties accepting crypto as payment for goods or services must include the value thereof in their gross income.  Moreover, a wide range of transactions involving cryptocurrencies are potentially taxable, including staking, mining, and crypto-to-crypto trading.

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Extruded aluminum imports fraudulently misclassified as warehouse pallets to evade anti-dumping and countervailing (AC/CVD) duties

A group of California companies affiliated with CiStock-1131702041-1-300x169hinese Billionaire Liu Zhongtian—known as “Uncle Liu” or “Big Boss”—have been ordered to pay the U.S. government $1.83 billion in restitution after having been convicted of a scheme to evade customs duties on imports of Chinese aluminum.  The judgment is believed to be one of the largest in U.S. history involving customs fraud.

On April 11, 2022, United States District Judge R. Gary Klausner sentenced the affiliated warehousing and aluminum companies to five years probation and ordered them to pay the $1.83 billion.  The sentence followed a trial in August 2022 where the defendants were convicted of conducting a scheme with Zhongtian and others to evade U.S. anti-dumping and countervailing duties (AC/CVD) on extruded aluminum products from China.  The jury found the defendants guilty of conspiracy, wire fraud, and passing false and fraudulent papers through a customshouse.

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Athenahealth allegedly violated the Anti-Kickback Statute (AKS) and False Claims Act by paying kickbacks for clients referrals.

Electronic Health Records -- Reading patient report on digital tablet

Healthcare technology firm Athenahealth has agreed to pay $18.25 million to settle allegations it violated the False Claims Act by paying illegal kickbacks for client referrals as part of initiatives to promote its Electronic Health Records platform athenaClinicals. Two qui tam relators whose whistleblower complaints exposed the fraud stand to receive significant whistleblower rewards.

Three illegal “marketing” initiatives

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Second Circuit rules that relevant government “payment decision” under Escobar included Veterans Administration’s initial decision to award contracts based on claim that contractor qualified as aservice-disabled, veteran-owned small business”—not just the VA’s subsequent decisions to make payments under those contracts.

In a key victory for the federal government and qui tam whistleblowers, the Second Circwhistlebloweruit Court of Appeals has affirmed that false statements regarding eligibility to take part in government programs—and not just subsequent false claims for payment after being allowed to participate—are actionable under the False Claims Act notwithstanding the U.S. Supreme Court’s 2016 landmark decision in Universal Health Services v. Escobar. The court in United States v. Strock rejected the idea that the only relevant “payment decision” under Escobar was the decision to pay a contractors’ invoices without regard to the initial decision to award the contract.

Impact on False Claims Act cases involving eligibility

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Fourth Circuit reasons that proving the fraudulent state of mind required for False Claims Act liability would defeat any claim of qualified immunity.

State or local government officials alleged to have violated the False Claims Act by defrauding the federal goveriStock-535378977-1024x796nment cannot raise “qualified immunity” as a defense, the Fourth Circuit Court of Appeals has held.  The state of mind required to establish False Claims Act liability forecloses it, the court reasoned in U.S. ex rel. Citynet v. Gianato.

Alleged grant fraud

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Fraud in connection with receipt of federal bailout funds held to be actionable under the False Claims Act.

The Second Circuit Court of Appeals has ruled in favor of two financial sector shutterstock_401325058-2-300x134qui tam whistleblowers, reviving their claims under the False Claims Act that Wells Fargo lied about its financial condition in order to get billions of dollars in low-interest emergency bailout funds from regional Federal Reserve Banks during the Financial Crisis.

The whistleblowers–who were former employees of Wells Fargo–alleged that the financial institution falsely certified that it was adequately capitalized and in compliance with applicable banking and mortgage lending laws when it requested billions of dollars in emergency loans from the Fed’s Discount Window and Term Auction Facility. As a result, it could get interest rates on the borrowed funds that were much lower than those for which it would otherwise have qualified.

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Centric Parts of California evaded 2.5% tariff by misclassifying “mounted” brake pads as “unmounted.”

In yet another False Claims Act settlement involving customs fraud and tariff enforcement, California aftermarket auto partshutterstock_493303243-300x200s supplier CWD Holdings, LLC – which does business as Centric Parts – has agreed to pay $8 million to revolve claims it knowingly evaded import duties owed on imported brake pads.  Two former employees of Centric who blew the whistle on the customs fraud scheme by filing qui tam lawsuits under the False Claims Act will share a $1.48 million reward.

If you have information about customs fraud and would like to discuss your rights, reach out to whistleblower attorney Mark A. Strauss, who has represented whistleblowers in successful cases based on customs fraud in the past.

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Firm allegedly provided government with inaccurate cost data during contract negotiations, failed to disclose that estimates had been reduced by automation of manual tasks.

Federal prosecutors have announced that CDM Smith, an environmental engineering and construction firm located in Fairfax, Virginia, has agreshutterstock_752242222-300x200ed to pay $5.6 million to resolve claims that it violated the False Claims Act by overcharging the U.S. Navy in connection with two waste water system contracts.  The company employee who blew the whistle on the misconduct by filing a qui tam lawsuit under the False Claims Act stands to receive a significant whistleblower reward.

Inaccurate cost and labor figures used

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Management pressured staff to inflate Medicare reimbursements by “upcoding” and “ramping.”

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The Seventh Circuit Court of Appeals has held that arrangements with a third-party litigation funder did not deprive a whistleblower of legal “standing” to pursue her claims under the False Claims Act.  It also upheld a $255 million jury verdict for Medicare fraud against the two Florida skilled nursing facilities where the whistleblower worked and the management firms that ran them.

The court’s decision in Ruckh v. Salus Rehabilitation counts as a significant victory for whistleblowers.  Healthcare industry defense lawyers are fretting about its potential consequences.