Whistleblower Protection Blog

Securities and Exchange Commission Whistleblower Awards List

mjw@whistleblowers.org (Mary Jane Wilmoth) — Fri, 17 May 2013 12:56:29 -0500

The SEC Office of the Whistleblower post Notices of Covered Action where a final judgement or order, by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in monetary sanctions exceeding $1 million.

Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award.

Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list on the continuation of this blog post. Updated 5-17-2013.

NOTICE NO.	ACTION	NOTICE DATE	CLAIM DUE DATE
2013-51	In the Matter of Koninklijke Philips Electronics N.V. Administrative Proceeding File No.: 3-15265 Case filed: April 5, 2013 Qualifying Judgment/Order: April 5, 2013	5/17/2013	8/15/2013
2013-50	SEC v. Jorge Gomez and Roberto Aleph Espinosa Case number: 12-cv-21962 (United States District Court for the Southern District of Florida) Case filed: May 25, 2012 Qualifying Judgment/Order: June 12, 2012	5/17/2013	8/15/2013
2013-49	SEC v. Albert K. Hu, Asenqua, Inc., Asenqua Capital Management, LLC, AQC Asset Management, Ltd., and Fireside Capital Management, Ltd. Case number: 09-cv-1177 (United States District Court for the Northern District of California) Case filed: March 18, 2009 Qualifying Judgment/Order: April 26, 2013	5/17/2013	8/15/2013
2013-48	SEC v. Matthew John Ryan and Prime Rate And Return, LLC, individually and doing business as American Integrity Financial Co. Case number: 10-cv-0513 (United States District Court for the Northern District of New York) Case filed: May 3, 2010 Qualifying Judgment/Order: April 2, 2013	5/17/2013	8/15/2013
2013-47	SEC v. Grant Ivan Grieve; Finvest Asset Management, LLC; and Finvest Fund Management, LLC Case number: 09-cv-1198 (United States District Court for the Southern District of New York) Case filed: February 10, 2009 Qualifying Judgment/Order: April 29, 2013	5/17/2013	8/15/2013
2013-46	In the Matter of Capital One Financial Corporation, Peter A. Schnall, and David A. Lagassa Administrative Proceeding File No.: 3-15299 Case filed: April 24, 2013 Qualifying Judgment/Order: April 24, 2013	5/17/2013	8/15/2013
2013-45	SEC v. Richard Verdiramo, Vincent L. Verdiramo, Esq., Edward Meyer, Jr., and Victoria Chen Case number: 10-cv-1888 (United States District Court for the Southern District of New York) Case filed: March 10, 2010 Qualifying Judgment/Order: April 29, 2013	5/17/2013	8/15/2013
2013-44	Parker Drilling Company Case number: 13-cv-00461 (United States District Court for the Eastern District of Virginia) Case filed: April 16, 2013 Qualifying Judgment/Order: April 23, 2013	5/17/2013	8/15/2013
2013-43	SEC v. Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, R. Allen Stanford, James M. Davis, and Laura Pendergest-Holt Case number: 09-cv-00298 (United States District Court for the Northern District of Texas) Case filed: February 17, 2009 Qualifying Judgment/Order: April 25, 2013	5/17/2013	8/15/2013
2013-42	SEC v. Steven Brewer, Adam Erickson, Brewer Investment Group, LLC, Brewer Financial Services, LLC and Brewer Investment Advisors, LLC Case number: 10-cv-6932 (United States District Court for the Northern District of Illinois) Case filed: October 28, 2010 Qualifying Judgment/Order: March 29, 2013	5/17/2013	8/15/2013
2013-41	SEC v. True North Finance Corporation, f/k/a CS Financing Corporation, Capital Solutions Monthly Income Fund, LP, f/k/a Hennessey Financial Monthly Income Fund, LP, Capital Solutions Distributors, LLC, Capital Solutions Management, LP, Transactional Finance Fund Management, LLC, Todd A. Duckson, Michael W. Bozora, Timothy R. Redpath, and Owen Mark Williams Case number: 10-cv-03995 (United States District Court for the District of Minnesota) Case filed: September 21, 2010 Qualifying Judgment/Order: April 15, 2013	5/17/2013	8/15/2013
2013-40	SEC v. Frank Bluestein Case number: 09-cv-13809 (United States District Court for the Eastern District of Michigan) Case filed: September 28, 2009 Qualifying Judgment/Order: April 24, 2013	5/17/2013	8/15/2013

More notices are listed in my previous post.

Bard Whistleblower Awarded $10.1 Million

mjw@whistleblowers.org (Mary Jane Wilmoth) — Tue, 14 May 2013 08:56:05 -0500

C.R. Bard Inc., a medical device company based in New Jersey, has agreed to pay the United States $48.26 million to resolve claims that it knowingly caused false claims to be submitted to the Medicare. The claim alleged that the company paid off doctors and hospitals to induce them to prescribe brachytherapy seeds. Giving such kickbacks is a violation of the False Claims Act.

The settlement requires that Bard pay $48.26 million and it resolves claims relating to Bard’s sale of brachytherapy seeds, a form of radiation therapy, to hospitals. The United States alleged that from 1998 to 2006, Bard provided illegal remuneration to customers and physicians to induce them to purchase Bard’s seeds, in violation of the Anti-Kickback Statute. The illegal remuneration allegedly took the form of certain grants, guaranteed minimum rebates, conference fees, marketing assistance and/or free medical equipment that Bard paid to customers and/or physicians who used the seeds to perform treatment for prostate cancer. Hospitals ultimately submitted bills to Medicare for these seeds, which the government alleged were rendered false by Bard’s illegal kickback activity. The government alleged that Bard was liable under the False Claims Act for causing the submission of those false claims.

The U.S. government joined the suit filed by Julie Darity, a former contracts administration officer for Bard. The settlement resolves the lawsuit filed in the U.S. District Court for the Northern District of Georgia under the qui tam, or whistleblower provisions, of the False Claims Act. United States ex rel. Darity v. C.R. Bard, Inc., et al., Civ. Action No. 1:06-cv-0208-SCJ (N.D. Ga.). Under the False Claims Act, private citizens may bring suit for false claims on behalf of the United States and share in any recovery obtained by the government. Darity will receive $10,134,600 as her share of the civil settlement.

Read the DOJ Press Release.

Bill to Extend Whistleblower Protections to Offshore Oil and Gas Workers Introduced

mjw@whistleblowers.org (Mary Jane Wilmoth) — Tue, 30 Apr 2013 09:03:26 -0500

On Apr 18, 2013, Rep. George Miller (D-CA) introduced bill to extend whistleblower protections to offshore oil and gas workers. Currently there is no federal law that protects oil and gas workers if they are retaliated against after they blow the whistle on workplace health and safety violations on the Outer Continental Shelf. Workers on oilrigs like the Deepwater Horizon risk losing their jobs if they report dangerous workplace conditions. The workers performing cleanup activities on the Outer Continental Shelf similarly have no protections against employer retaliation for raising health and safety concerns.

The Committee on Education and the Workforce Democrats issued a fact sheet about the Bill. The fact sheet calls for all workers to be protected when they blow the whistle on “concerns about unsafe working conditions” and to grant the workers the “right to stop working if they fear they could be injured or killed.”

“Employees are best situated to discover hazards in the work environment; they are the first line of detection and should be protected when raising concerns,” stated Stephen Kohn, Executive Director of the National Whistleblower Center.

The Offshore Oil and Gas Worker Whistleblower Protection Act of 2013 (H.R.1649) extends whistleblower protections to employees of employers working on the Outer Continental Shelf performing oil and gas exploration, drilling, production, or oil spill cleanup.

The bill is modeled after other modern whistleblower statutes and would:

Prohibit an employer from discharging or otherwise discriminating against an employee who reports to the employer, or a federal or state government official that he or she reasonably believes the employer is violating the Outer Continental Shelf Lands Act (OCSLA).
Protect covered employees who report injuries or unsafe conditions related to the offshore work, refuse to work based on a good faith belief that the offshore work could cause injury or impairment or a spill, or refuse to perform work in a manner that they believe violates the OCSLA.
Establish a process for an employee to appeal an employer’s retaliation by filing a complaint with the Secretary of Labor, and allowing a jury trial if the Secretary fails to act in a timely manner.
Make an aggrieved employee eligible for reinstatement, back pay and compensatory and consequential damages, and, where appropriate, exemplary damages.
Require employers to post a notice that explains employee rights and remedies under this Act and provide training to the employees of these rights.

Read the text of the Offshore Oil and Gas Worker Whistleblower Protection Act, here.

Senate Democrats put off vote on Labor Nominee Amid Criticism from Republicans

mjw@whistleblowers.org (Mary Jane Wilmoth) — Mon, 29 Apr 2013 09:00:24 -0500

On April 24, Senate Democrats delayed a confirmation vote on Labor Secretary nominee Thomas Perez. Committee Chairman Tom Harkin of Iowa was concerned that Republicans would use a threatened separate hearing as a forum to attack Perez in his absence. Read more.

Senate Republicans have criticized Perez for his involvement in a deal with the city of St. Paul, MN that left a whistleblower with nothing. Senator Chuck Grassley, Ranking Member of the Senate Judiciary Committee in coordination with Issa and House Judiciary Chairman Bob Goodlatte, released a joint staff report about how Perez orchestrated a controversial quid pro quo with the city that prevented the Justice Department from recovering hundreds of millions of dollars back to the taxpayers, and left a whistleblower who filed the suit out in the cold.

Here is an excerpt from the joint staff report.

"In early February 2012, Assistant Attorney General Thomas E. Perez made a secret deal behind closed doors with St. Paul, Minnesota, Mayor Christopher Coleman and St. Paul’s outside counsel, David Lillehaug. Perez agreed to commit the Department of Justice to declining intervention in a False Claims Act qui tam complaint filed by whistleblower Fredrick Newell against the City of St. Paul, as well as a second qui tam complaint pending against the City, in exchange for the City’s commitment to withdraw its appeal in Magner v. Gallagher from the Supreme Court, an appeal involving the validity of disparate impact claims under the Fair Housing Act."

According to the joint staff report, this deal cost the U.S. Government the opportunity to recover as much as $200 million.

The Department of Labor’s OSHA Whistleblower Protection Program enforces the whistleblower provisions of more than twenty whistleblower statutes protecting employees who report violations of various workplace safety, airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health insurance reform, motor vehicle safety, nuclear, pipeline, public transportation agency, railroad, maritime, and securities laws. Rights afforded by these whistleblower acts include, but are not limited to, worker participation in safety and health activities, reporting a work related injury, illness or fatality, or reporting a violation of the statutes.

Read the full joint staff report here.

NWC Files Another Brief Urging the MSPB to Retroactively Apply WPEA

mjw@whistleblowers.org (Mary Jane Wilmoth) — Mon, 29 Apr 2013 08:58:24 -0500

On April 12, 2013, the National Whistleblower Center filed an Amicus Curiae brief with the Merit Systems Protection Board (MSPB), in the case of King v. Department of the Air Force. At issue is whether the provision of the Whistleblower Protection Enhancement Act of 2012 (“WPEA”) regarding compensatory damages applies to all current cases pending before the MSPB. The MSPB requested stakeholders to file briefs on the issue as they did in Day v. Department of Homeland Security.

In its brief, the NWC again strongly urged the MSPB to retroactively apply the WPEA to all pending cases. The MSPB’s decision will impact the fate of federal employees and whistleblowers that filed claims or suffered retaliation before the WEPA was signed into law on November 27, 2012.

Stephen M. Kohn, Executive Director of the NWC, said, “it is unequivocal that the intent of Congress was to apply the WPEA, including the provision on compensatory damages, to all pending cases retroactively.”

The NWC’s brief can be viewed here.

TSA Whistleblower Robert MacLean Wins Appeal

mjw@whistleblowers.org (Mary Jane Wilmoth) — Fri, 26 Apr 2013 15:11:41 -0500

Today the Court of Appeals for the Federal Circuit issued a decision in MacLean v. Department of Homeland Security. In 2003, Robert MacLean blew the whistle on the Department of Homeland Security’s Transportation Security Agency’s (TSA) plan to remove U.S. air marshals from long distance flights during a heightened terrorist alert. Mr. MacLean was concerned that the suspension of overnight missions created a danger to the flying public. He complained to his supervisor and to the Office of Inspector General; both responded that they could do nothing.

Mr. MacLean then gave information to a MSNBC reporter about the TSA’s plan. The reporter published an article criticizing the plan. The TSA withdrew its plan after criticism from the public and members of Congress. The TSA subsequently fired Mr. MacLean.

A major issue on appeal from the Merit Systems Protection Board (“MSPB”), was whether or not Mr. MacLean was covered under the Whistleblower Protection Act (“WPA”). Specifically, the WPA prohibits individuals in positions of authority from taking a “personnel action” against a government employee when the employee makes a disclosure, which the employee reasonable believes to evidence a “substantial and specific danger to public health and safety, if such disclosure is not specifically prohibited by law.” The Court of Appeals held that MacLean’s disclosure was “not specifically prohibited by law.”

The Court vacated the MSPB decision which upheld Mr. MacLean’s termination and remanded the case back to the MSPB to determine whether MacLean’s “disclosure qualifies for WPA protection.” The MSPB must determine whether Mr. MacLean “reasonable believed” his disclosure evidenced a “substantial and specific danger to public health and safety.”

Read the Court of Appeals decision here.

Proposed Rule Would Increase Rewards to Medicare Fraud Whistleblowers to Nearly $10 Million

mjw@whistleblowers.org (Mary Jane Wilmoth) — Fri, 26 Apr 2013 13:46:30 -0500

On April 24, 2013, Health and Human Services Secretary Kathleen Sebelius announced a proposed rule that would increase rewards paid to Medicare beneficiaries and others whose tips about suspected fraud lead to the successful recovery of funds to as high as $9.9 million.

Over the last three years, the HHS has recovered over $14.9 billion in fraud, some of which resulted from fraud reporting by individuals – a proven tool in helping the government detect fraud, waste and abuse in the Medicare program.

The proposed rule would increase the potential reward amount for individuals who report information that leads to a recovery of Medicare funds from 10 percent to 15 percent of the final amount collected. The current program caps the reward at $1,000, meaning HHS pays a reward on the first $10,000 it collects as a result of a tip. HHS is also proposing to increase the portion of the recovery on which HHS will pay a reward up to the first $66 million recovered – this means an individual could receive a reward of $9.9 million if HHS recovers $66 million or more.

HHS believes that the proposed rule would increase the incentive for individuals to report information on those that have engaged in “sanctionable conduct.” HHS proposed these changes based on the success of the IRS reward program and hopes that the increase in the portion of the amount collected for a reward will result in success for it with an increase in Medicare fraud reports.

Individuals will only be eligible to receive a reward if the information reported relates to the activities of a specific individual or entity and specifies the time period of the alleged activities. Examples given in the proposed rule include: “billing for services never rendered, and billing for supplies not ordered. Other activities may include offers of money, goods or free services in exchange for the beneficiary's Medicare identification number.”

The proposed rule will be published in the Federal Register on April 29, and comments will be accepted through June 28. You can view the unpublished rule here.

To read a HHS fact sheet about the proposed rule visit: http://www.cms.gov/apps/media/fact_sheets.asp

The Humane Society Speaks on Silencing Whistleblowers

mjw@whistleblowers.org (Mary Jane Wilmoth) — Fri, 26 Apr 2013 11:45:42 -0500

Cathy Kangas, a Board member with the Humane Society of the United States, wrote a moving blog article yesterday about the importance of whistleblowers and why they should not be silenced.

The article states the alarming fact that "In 2013, lawmakers in 11 states have introduced anti-whistleblower bills."

Here is a link to her article entitled "Silencing Whistleblowers."

OSHA Finds Metra Retaliated Against Whistleblower

mjw@whistleblowers.org (Mary Jane Wilmoth) — Wed, 24 Apr 2013 09:43:27 -0500

In an April 23, 2013 press release, the U.S. Department of Labor's Occupational Safety and Health Administration announced that it found that the Northeast Illinois Regional Commuter Railroad Corp., known as Metra, violated the Federal Railroad Safety Act. The violation occurred when a signalman's work hours were changed and his position was eliminated after he made a safety complaint. The company is ordered to pay more than $38,080 in overtime, along with interest, compensatory damages and attorney's fees.

"An employer does not have the right to retaliate against employees who report safety issues," said Nick Walters, OSHA's regional administrator in Chicago. "When employees can't report safety concerns on the job without fear of retaliation, worker safety and, in this case, passenger safety on Metra, becomes a serious concern."

An OSHA investigation upheld the 22-year Metra employee's allegation that the railroad reduced his overtime hours and eventually eliminated his position in retaliation for reporting a safety complaint on or about Aug. 1, 2011. After the employee reported that signal routes were not tested properly due to time constraints, he began to experience a reduction in overtime hours. Following his complaint filed with the secretary of labor alleging Metra had retaliated against him in violation of the FRSA, his position was eliminated.

OSHA's investigation found that the reporting of the safety issue was used as a pretext by the employer to reduce overtime and eliminate the employee's position. Metra provided no explanation for the reduced overtime hours or for eliminating the position so soon after the employee made his safety complaint.

The railroad carrier has been ordered to remove disciplinary information from the employee's personnel record and to provide whistle-blower rights information to its employees. Either party in the case can file an appeal with the department's Office of Administrative Law Judges.

Read OSHA's Press Release

Securities and Exchange Commission Whistleblower Awards List

mjw@whistleblowers.org (Mary Jane Wilmoth) — Tue, 23 Apr 2013 08:28:35 -0500

Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list on the continuation of this blog post. Updated 4-23-2013.

Notice No.	Action	Notice Date	Claim Due Date
2013-39	SEC v. A Chicago Convention Center, LLC, Anshoo R. Sethi, and Intercontinental Regional Center Trust of Chicago, LLC Case number: 13-cv-00982 (United States District Court for the Northern District of Illinois) Case filed: February 6, 2013 Qualifying Judgment/Order: April 19, 2013	4/23/2013	7/22/2013
2013-38	SEC v. Big Apple Consulting USA, Inc., MJMM Investments, LLC, Marc Jablon, Matthew Maguire, Mark C. Kaley, and Keith Jablon Case number: 09-cv-1963 (United States District Court for the Middle District of Florida) Case filed: November 18, 2009 Qualifying Judgment/Order: March 29, 2013	4/15/2013	7/15/2013
2013-37	SEC v. 3 Eagles Research & Development LLC, Harry Dean Proudfoot III, Matthew Dale Proudfoot, Laurie Anne Vrvilo and Dennis Ashley Bukantis Case number: 12-cv-01289 (United States District Court for the District of Oregon) Case filed: July 17, 2012 Qualifying Judgment/Order: March 19, 2013	4/15/2013	7/15/2013
2013-36	In the Matter of Banco Comercial Português, S.A. Administrative Proceeding File No.: 3-15248 Case filed: March 18, 2013 Qualifying Judgment/Order: March 18, 2013	4/15/2013	7/15/2013
2013-35	SEC v. Verde Retirement LLC, a California limited liability company, Verde FX Nevada, LLC, a California limited liability company, Covenant Capital Partners, a California corporation, and Steven L. Hamilton Case number: 12-cv-0445 (United States District Court for the Southern District of California) Case filed: February 21, 2012 Qualifying Judgment/Order: March 28, 2013	4/15/2013	7/15/2013
2013-34	SEC v. City Capital Corporation, Ephren W. Taylor, II, and Wendy Jean Connor Case number: 12-cv-1249 (United States District Court for the Northern District of Georgia) Case filed: April 12, 2012 Qualifying Judgment/Order: March 7, 2013	4/15/2013	7/15/2013
2013-33	SEC v. Derek A. Nelson, Capital Mountain Holding Corp., Systems XXI, Act I, LLC, and Systems XXI, Act II, LLC Case number: 09-cv-2222 (United States District Court of the Northern District of Texas) Case filed: November 20, 2009 Qualifying Judgment/Order: March 6, 2013	4/15/2013	7/15/2013
2013-32	SEC v. Bridge Premium Finance, LLC (f/k/a Berjac of Colorado, LLC), Michael J. Turnock, and William P. Sullivan, II Case number: 12-cv-2131 (United States District Court for the District of Colorado) Case filed: August 14, 2012 Qualifying Judgment/Order: March 11, 2013	4/15/2013	7/15/2013
2013-31	SEC v. K2 Unlimited, Inc., 211 Ventures, LLC, Diane Glatfelter, Robert C. Rice, and Robert S. Anderson Case number: 11-cv-11649 (United States District Court for the District of Massachusetts) Case filed: September 19, 2011 Qualifying Judgment/Order: March 13, 2013	4/15/2013	7/15/2013
2013-30	SEC v. M. Mark McAdams and R. Dane Freeman Case number: 10-cv-00701 (United States District Court for the District of South Carolina) Case filed: March 18, 2010 Qualifying Judgment/Order: March 1, 2013	4/15/2013	7/15/2013
2013-29	SEC v. Oversea Chinese Fund Limited Partnership, Weizhen Tang & Associates, Inc., Weizhen Tang Corp., Winwin Capital Management, LLC, Winwin Capital Limited Partnership, J.O.R. & Associates, LLC, and Weizhen Tang Case number: 09-cv-0614 (United States District Court for the Northern District of Texas) Case filed: April 3, 2009 Qualifying Judgment/Order: October 1, 2012	4/15/2013	7/15/2013
2013-28	SEC v. EFS, LLC, Freedom Fidelity, LLC, James N. Pratt, SP&V, LLC, and Timothy V. Coffin Case number: 06-cv-0793 (United States District Court for the Northern District of Texas) Case filed: May 3, 2006 Qualifying Judgment/Order: October 17, 2012	4/15/2013	7/15/2013
2013-27	SEC v. Merendon Mining (Nevada) Inc, Larry Lee Adair, Milowe Allen Brost a/k/a/ Milow Brost, M.B. Gonne or Phillip K. Collins, Ward K. Capstick, Bradley Dean Regier, Gary Allen Sorenson a/k/a Don Grey Fox, Martin M. Werner, Syndicated Gold Depository Inc, now known as Bahamas Resources Alliance Ltd., Merendon Mining Corp. Ltd., Institute For Financial Learning Group of Companies, Inc. Case number: 10-cv-00955 (United States District Court for the Western District of Washington) Case filed: June 10, 2010 Qualifying Judgment/Order: October 30, 2012	4/15/2013	7/15/2013
2013-26	SEC v. Chetan Kapur and Lilaboc, LLC, d/b/a ThinkStrategy Capital Management, LLC. Case number: 11-cv-8094 (United States District Court for the Southern District of New York) Case filed: November 10, 2011 Qualifying Judgment/Order: November 29, 2012	4/15/2013	7/15/2013

More notices are listed in my previous post.

In Memoriam-Estelle S. Kohn

mjw@whistleblowers.org (Mary Jane Wilmoth) — Tue, 16 Apr 2013 11:06:04 -0500

In Memoriam

Estelle S. Kohn

May 2, 1953 - April 10, 2013

Estelle Kohn was dedicated to and passionate about educating the public on whistleblower protection issues. She served as the Deputy Director of the National Whistleblower Center and the National Whistleblower Legal Defense and Education Fund for the last ten years. In this role she built a world-renowned public education program that includes a highly respected public interest student intern program that brings over 60 students each year to Washington, D.C., to work with experienced licensed attorneys in the field of whistleblower law and advocacy.

Ms. Kohn was also instrumental in the development and coordination of the NWC's educational seminars that have been held throughout the United States. In addition, she established a program with the U.S. State Department in which international delegations visit the NWC to learn about U.S. whistleblower protection laws as they try to develop whistleblower protections in their own countries. Ms. Kohn also ran the NWC Speaker's Bureau, which sent speakers around the world to educate the public on whistleblower protection issues.

Ms. Kohn also oversaw the NWLDEF's Attorney Referral Service. In this role she worked directly with thousands of whistleblowers to help find experienced whistleblower attorneys to represent them.

Estelle Kohn was also a loving daughter, devoted sister and dedicated friend. She will be missed greatly by all who were fortunate enough to have known and worked with her.

Always so true, unselfish and kind.

Few in this world are equal to find;

A beautiful life that came to an end.

She died, as she lived

Everyone's friend.

There will be a memorial service on April 21, 2013 at the Quaker Meeting Room, Sidwell Friends Upper School, 3825 Wisconsin Ave, N.W., Washington, D.C. 20016 between 12 noon and 2pm.

Contact mjw@whistleblowers.org.

NWC and Others Outline Objections to Proposed Rules During Public Hearing

mjw@whistleblowers.org (Mary Jane Wilmoth) — Wed, 10 Apr 2013 13:56:49 -0500

Dean Zerbe and Felipe Bohnet-Gomez, representing the National Whistleblowers Center and Kohn, Kohn, and Colapinto LLP, respectively, presented remarks today at a public hearing on the IRS’s proposed regulations on its Whistleblower Program. Zerbe spoke on the policy implications of the regulations in their current form, and underscored the importance of whistleblowers in assisting the IRS to fight fraud effectively and efficiently. Bohnet-Gomez outlined objections to proposed regulations’ definition of certain key terms, which narrow the scope and effectiveness of the whistleblower program far beyond the language of the 2006 law.

All in attendance at today’s public hearing—including other attorneys and advocacy groups—agreed that the regulations should not be finalized in their current form. In addition to concern over the IRS’s definition of key terms, speakers also disagreed with the Service’s treatment of Net Operating Losses (NOLs) and other tax attributes, as well as a variety of provisions relating to the administration of the IRS Whistleblower Program and the Service’s communication with whistleblowers. Currently, whistleblowers face wait times of several years before their claims are processed, during which they typically do not receive any communication from the IRS regarding the status of their claim.

The National Whistleblowers Center submitted extensive written comments on the proposed regulations on February 19, 2013, and is available here.

A copy of Dean Zerbe’s presentation on whistleblower policy can be found here.

My previous blog post on this issue can be found here.

Dean Zerbe Gives Guidance for IRS Whistleblower Submissions

mjw@whistleblowers.org (Mary Jane Wilmoth) — Wed, 27 Mar 2013 13:39:13 -0500

Today on Forbes.com, Dean Zerbe, the National Whistleblower Center’s Senior Policy Analyst, explains the potential issues that may be slowing or sidetracking submissions at the IRS Whistleblower Office. He also gives detailed insight into issues that may cause delay that whistleblowers cannot control. The IRS Whistleblower Program: What To Do When The IRS Isn't Moving On Your Submission tackles the most commonly asked questions in a simple and straightforward way.

Major Victory for SOX Whistleblowers

mjw@whistleblowers.org (Mary Jane Wilmoth) — Tue, 19 Mar 2013 10:12:19 -0500

Today, the U.S. Court of Appeals for the Third Circuit issued a major precedential decision in the case of Wiest v. Tyco Electronics Corp., establishing the standards for protecting corporate whistleblowers under the Sarbanes-Oxley Act. In a 2-1 split ruling, the Court held that corporate whistleblowers who have a "reasonable belief" that securities laws are being violated are protected under the Sarbanes-Oxley Act (SOX). The Court rejected arguments raised by Tyco and the Chamber of Commerce that the SOX whistleblower law only protected employees whose disclosures "definitively and specifically" related to a "violation of a statute."

The whistleblower, Mr. Jeffrey A. Wiest, had worked at Tyco for 31 years, and was fired after rejecting expense payments that "failed to satisfy accounting standards."

The National Whistleblower Center filed an amicus brief in the case supporting Mr. Wiest, and Stephen M. Kohn, a partner in the law firm of Kohn, Kohn and Colapinto, LLP, co-argued the case before the Appeals Court on behalf of the NWC. He joined Mr. Wiest's counsel, Richard Angino, in oral argument to strongly urge the court to reject the "definitively and specifically" standard.   

Mr. Kohn highlighted the importance of today's decision by stating: ”This is a major victory for SOX whistleblowers. Employees performing their duties discover many corporate frauds and violations and then report concerns to their supervisor. Whistleblower laws, such as SOX, would lose their effectiveness if this common form of raising reasonable concerns was not protected.”

A copy of the decision is available here.

IRS Tries to Duck Whistleblowers

mjw@whistleblowers.org (Mary Jane Wilmoth) — Mon, 18 Mar 2013 15:27:34 -0500

Late Friday, the Department of Treasury posted a notice in the Federal Register regarding the IRS's proposed rules for its whistleblower office (26 CFR Part 301 [Reg-141066-09]. The notice announces a public hearing on the proposed rules for the IRS Whistleblower Program. I previously shared information about these proposed rules here: IRS On Verge Of Crippling Whistleblower Program and here: IRS Whistleblowers Received Record Payouts in 2012, But Future Recoveries At Risk. In addition, the National Whistleblower Center issued an Action Alert regarding these proposed rules encouraging the public to submit comments. New IRS Regulations Hurt Whistleblowers, Help Swiss Bankers!

These proposed rules have caused uproar in the whistleblower community. On March 4 CNN Money noted that “"A grassroots campaign started by the National Whistleblower Center...saw more than 670 barb-laden letters from lawyers and ordinary citizens, an unusually high number, flood Miller's desk over the past two months.” Also see: NWC Threatens Legal Action if IRS Does Not Bend on Whistleblower Rules.

This notice, filed late on Friday, which gives the public two business days to respond, has further enraged whistleblower advocates. See IRS to Gut Whistleblower Program-Publishes Notice in Fed Registry Providing Little to No Time for Public Comment.

The public hearing is being held on Wednesday, April 10, 2013, at 10:00 a.m., in the IRS Auditorium, Internal Revenue Service Building, 1111, Constitution Avenue NW, Washington, DC 20224.

Persons who submitted written comment by February 19, 2013, will be permitted to present oral comments at the hearing. A period of 10 minutes is allotted to each person for presenting oral comments. If you wish to present oral comments, you must submit an outline of the topics to be addressed and the amount of time to be denoted to each topic. The IRS must receive outlines of the topics to be discussed at the public hearing by Wednesday, March 20, 2013.

Send Submissions to:

CC:PA:LPD:PR (REG–141066–09), room 5205
Internal Revenue Service,
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044.

Submissions may be hand-delivered Monday through Friday to:

CC:PA:LPD:PR (REG–141066–09),
Couriers Desk, Internal Revenue
Service, 1111 Constitution Avenue NW
Washington, DC 20224

Submissions may also be sent electronically via the Federal eRulemaking Portal at www.regulations.gov (REG–141066–09).

Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. For information about having your name placed on the building access list to attend the hearing, contact Oluwafunmilayo Taylor at (202) 622–7180.

Securities and Exchange Commission Whistleblower Awards List

mjw@whistleblowers.org (Mary Jane Wilmoth) — Tue, 12 Mar 2013 08:48:55 -0500

Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list on the continuation of this blog post.

Notice No.	Action	Notice Date	Claim Due Date
2013-25	SEC v. Douglas F. Vaughan, The Vaughan Company, Realtors, Inc., and Vaughan Capital, LLC. Case number: 10-cv-00263 (United States District Court for the District of New Mexico) Case filed: March 23, 2010 Qualifying Judgment/Order: February 14, 2013	03/11/2013	06/10/2013
2013-24	SEC v. Sky Way Global LLC (A/K/A Sky Way Global, Inc.), Brent C. Kovar, Glenn A. Kovar, James S. Kent, Kenneth Bruce Baker (A/K/A Bruce Baker), and Kenneth R. Kramer Case number: 09-cv-00455 (United States District Court for the Middle District of Florida) Case filed: March 13, 2009 Qualifying Judgment/Order: February 22, 2013	03/11/2013	06/10/2013
2013-23	SEC v. Peter Siris, Guerrilla Capital Management, LLC, and Hua Mei 21st Century, LLC Case number: 12-cv-05810 (United States District Court for the Southern District of New York) Case filed: July 30, 2012 Qualifying Judgment/Order: September 18, 2012	03/11/2013	06/10/2013
2013-22	SEC v. J.C. Reed & Company, Inc., J.C. Reed Advisory Group, LLC, Barron A. Mathis, and Estate of John C. Reed, Lana L. Reed Executrix Case number: 08-cv-01112 (United States District Court for the Middle District of Tennessee) Case filed: November 18, 2008 Qualifying Judgment/Order: February 26, 2013	03/11/2013	06/10/2013
2013-21	In the Matter of Oppenheimer Asset Management Inc. and Oppenheimer Alternative Investment Management, LLC Administrative Proceeding File No.: 3-15238 Case filed: March 11, 2013 Qualifying Judgment/Order: March 11, 2013	03/11/2013	06/10/2013
2013-20	SEC v. Sean David Morton, Vajra Productions, LLC, 27 Investments, LLC, and Magic Eight Ball Distributing, Inc. Case number: 10-cv-1720 (United States District Court for the Southern District of New York) Case filed: March 4, 2010 Qualifying Judgment/Order: February 13, 2013	03/11/2013	06/10/2013
2013-19	SEC v. Gilbert G. Lundstrom, James A. Laphen, and Trevor A. Lundstrom Case number: 12-cv-00343 (United States District Court for the District of Nebraska) Case filed: Month DD, YYYY Qualifying Judgment/Order: September 25, 2012	03/11/2013	06/10/2013
2013-18	SEC v. Innovative Advisory Services, Inc., Innovative Advisory Services LLC, Island Trader LLC and Richard H. Nickles Case number: 10-cv-00423 (United States District Court for the Central District of California) Case filed: April 7, 2010 Qualifying Judgment/Order: September 24, 2012	03/11/2013	06/10/2013
2013-17	In the Matter of Focus Point Solutions, Inc., The H Group, Inc., and Christopher Keil Hicks Administrative Proceeding File No.: 3-15011 Case filed: September 6, 2012 Qualifying Judgment/Order: September 6, 2012	03/11/2013	06/10/2013
2013-16	SEC v. Howard Brett Berger Case number: 12-cv-4728 (United States District Court for the Eastern District of New York) Case filed: September 21, 2012 Qualifying Judgment/Order: January 22, 2013	03/11/2013	06/10/2013

You can find more Notices in my previous blog post here.

MSPB Urged to Retroactively Apply WEPA

mjw@whistleblowers.org (Mary Jane Wilmoth) — Fri, 01 Mar 2013 15:51:03 -0500

Today the National Whistleblower Center filed an Amicus Curiae brief with the Merit Systems Protection Board (MSPB), in the case of Day v. Department of Homeland Security. At issue is whether the new definition of a protected disclosure set forth in the Whistleblower Protection Enhancement Act will apply to cases pending and/or which arose before that law was passed. The MSPB requested stakeholders to file briefs on the issue.

In its brief, the NWC strongly urged the MSPB to retroactively apply the WPEA’s definition of protected disclosure to all pending cases. The MSPB’s decision will impact the fate of federal employees and whistleblowers that filed claims or suffered retaliation before the WEPA was signed into law on November 27, 2012.

Stephen M. Kohn, Executive Director of the NWC, said “It would be tragic if the reforms the whistleblower community fought for were denied to the very people for whom the law was designed to protect. If the Board decides not to retroactively apply the WEPA, whistleblowers will once again get the short end of the stick. The Board will also send a strong message that its hostility toward whistleblowing is unending. We hope Congress’s action in unanimously passing the WEPA will result in real change.”

The NWC’s brief can be viewed here.

The Office of Special Counsel, which strongly supports retroactively applying the new definition of a protected disclosure, previously filed a brief in this case. OSC's brief can be viewed here.

Securities and Exchange Commission Whistleblower Awards List

mjw@whistleblowers.org (Mary Jane Wilmoth) — Fri, 01 Mar 2013 14:56:59 -0500

Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list on the continuation of this blog post.

Notice No.	Action	Notice Date	Claim Due Date
2013-15	SEC v. David E. Ruskjer Case number: 09-cv-237 (United States District Court for the District of Hawaii) Case filed: May 27, 2009 Qualifying judgment/order: January 2, 2013	02/08/2013	05/09/2013
2013-14	SEC v. Eli Lilly and Company Case number: 12-cv-2045 (United States District Court for the District of Columbia) Case filed: December 20, 2012 Qualifying judgment/order: January 2, 2013	02/08/2013	05/09/2013
2013-13	SEC v. Igor Poteroba, Aleksey Koval and Alexander Vorobiev Case number: 10-cv-2667 (United States District Court for the Southern District of New York) Case filed: March 24, 2010 Qualifying judgment/order: January 15, 2013	02/08/2013	05/09/2013
2013-12	SEC v. J.P. Morgan Securities LLC, EMC Mortgage, LLC, Bear Stearns Asset Backed Securities I, LLC, Structured Asset Mortgage Investments II, Inc., SACO I, Inc., and J.P. Morgan Acceptance Corporation I Case number: 12-cv-1862 (United States District Court for the District of Columbia) Case filed: November 16, 2012 Qualifying judgment/order: January 8, 2013	02/08/2013	05/09/2013
2013-11	SEC v. Gary J. Martel, D/B/A Martel Financial Group, and MFG Funding Case number: 12-cv-11095 (United States District Court for the District of Massachusetts) Case filed: June 19, 2012 Qualifying judgment/order: January 7, 2013	02/08/2013	05/09/2013
2013-10	SEC v. Management Solutions, Inc., a Texas Corporation; Wendell A. Jacobson; and Allen R. Jacobson Case number: 11-cv-1165 (United States District Court for the District of Utah) Case filed: December 15, 2011 Qualifying judgment/order: December 18, 2012	1/4/2013	4/4/2013
2013-9	SEC v. BP p.l.c. Case number: 12-cv-2774 (United States District Court for the Eastern District of Louisiana) Case filed: November 15, 2012 Qualifying judgment/order: December 10, 2012	1/4/2013	4/4/2013
2013-8	SEC v. Tiger Asia Management, LLC, Tiger Asia Partners, LLC, Sung Kook (a/k/a Bill) Hwang, and Raymond Y.H. Park Case number: 12-cv-7601 (United States District Court for the District of New Jersey) Case filed: December 14, 2012 Qualifying judgment/order: December 17, 2012	1/4/2013	4/4/2013
2013-7	SEC v. Igor Cornelsen and Bainbridge Group Inc. Case number: 12-cv-8712 (United States District Court for the Southern District of New York) Case filed: November 30, 2012 Qualifying judgment/order: December 11, 2012	1/4/2013	4/4/2013
2013-6	In the Matter of Allianz SE Administrative Proceeding File No.: 3-15132 Case filed: December 17, 2012 Qualifying judgment/order: December 17, 2012	1/4/2013	4/4/2013
2013-5	SEC v. Francis E. Wilde, Steven E. Woods, Mark A. Gelazela, Bruce H. Haglund, Matrix Holdings LLC, BMW Majestic LLC, IDLYC Holdings Trust LLC, and IDYLC Holdings Trust Case number: 11-cv-00315 (United States District Court for the Central District of California) Case filed: February 24, 2011 Qualifying judgment/order: December 18, 2012	1/4/2013	4/4/2013
2013-4	In the Matter of Fiduciary Asset Management, LLC Administrative Proceeding File No.: 3-15140 Case filed: December 19, 2012 Qualifying judgment/order: December 19, 2012	1/4/2013	4/4/2013
2013-3	SEC v. EagleEye Asset Management, LLC and Jeffrey A. Liskov Case number: 11-cv-11576 (United States District Court for the District of Massachusetts) Case filed: September 8, 2011 Qualifying judgment/order: December 12, 2012	1/4/2013	4/4/2013
2013-2	In the Matter of Aladdin Capital Management LLC and Aladdin Capital LLC Administrative Proceeding File No.: 3-15134 Case filed: December 17, 2012 Qualifying judgment/order: December 17, 2012	1/4/2013	4/4/2013
2013-1	SEC v. I. Joseph Massoud Case number: 12-cv-01691 (United States District Court for the District of Connecticut) Case filed: November 30, 2012 Qualifying judgment/order: December 10, 2012	1/4/2013	4/4/2013
2012-130	SEC v. Well Advantage Limited, Certain Unknown Traders in the Securities of Nexen, Inc. In an Account of Phillip Securities PTE LTD., and Certain Unknown Traders in the Securities of Nexen, Inc. in an Account of Citibank NA A/C HK 4 Case number: 12-cv-5786 (United States District Court for the Southern District of New York) Case filed: July 27, 2012 Qualifying Judgment/Order: November 7, 2012	12/7/2012	3/7/2013
2012-129	SEC v. Kenneth Ira Starr, Starr Investment Advisors, LLC, Starr & Company, LLC, and Jonathan Star Bristol Case number: 10-cv-4270 (United States District Court for the Southern District of New York) Case filed: May 27, 2010 Qualifying Judgment/Order: November 15, 2012	12/7/2012	3/7/2013
2012-128	SEC v. Kris Chellam Case number: 12-cv-7983 (United States District Court for the Southern District of New York) Case filed: October 26, 2012 Qualifying Judgment/Order: November 5, 2012	12/7/2012	3/7/2013
2012-127	SEC v. Christel S. Scucci, Karen S. Beach, Cameron H. Linton, Esq., Protégé Enterprises, LLC, and Capital Edge Enterprises, LLC Case number: 12-cv-00646 (United States District Court for the Middle District of Florida) Case filed: April 30, 2012 Qualifying Judgment/Order: November 5, 2012	12/7/2012	3/7/2013
2012-126	In the Matter of Credit Suisse Securities (USA) LLC; DLJ Mortgage Capital, Inc.; Credit Suisse First Boston Mortgage Acceptance Corp.; Credit Suisse First Boston Mortgage Securities Corp.; and Asset Backed Securities Corporation Administrative Proceeding File No.: 3-15098 Case filed: November 16, 2012 Qualifying Judgment/Order: November 16, 2012	12/7/2012	3/7/2013
2012-125	SEC v. Joseph J. Monterosso, Luis E. Vargas, Lawrence E. Lynch, and Timothy Huff Case number: 7-cv-61693 (United States District Court for the Southern District of Florida) Case filed: November 21, 2007 Qualifying Judgment/Order: November 16, 2012	12/7/2012	3/7/2013
2012-124	SEC v. Anand Sekaran and Wasson Capital Advisors Ltd. Case number: 12-cv-8199 (United States District Court for the Southern District of New York) Case filed: November 9, 2012 Qualifying Judgment/Order: November 26, 2012	12/7/2012	3/7/2013

January 2013 Decisions of the Administrative Review Board

mjw@whistleblowers.org (Mary Jane Wilmoth) — Tue, 26 Feb 2013 10:31:03 -0500

The USDOL/OALJ Reporter has published case summaries and case links for cases decided in January 2013 by the Administrative Review Board. The decisions are found at
http://www.oalj.dol.gov/PUBLIC/ARB/REFERENCES/Caselists/01_2013.HTM

OSHA Announces Interim Rule on Whistleblower Protections for Reporting Violations of Affordable Care Act

mjw@whistleblowers.org (Mary Jane Wilmoth) — Mon, 25 Feb 2013 16:30:56 -0500

Last Friday, OSHA published an interim final rule, and invited public comment on whistleblower protections for reporting violations of Affordable Care Act's health insurance reforms. The Affordable Care Act contains various provisions to make health insurance more affordable and accountable to consumers. Among the policies to achieve its goals, the Affordable Care Act's Section 1558 provides protection to employees against retaliation by an employer for reporting alleged violations of Title I of the act or for receiving a tax credit or cost-sharing reduction as a result of participating in a Health Insurance Exchange or Marketplace.

The interim final rule can be viewed at www.dol.gov/find/20130222/. Comments, which will be accepted for 60 days, may be submitted electronically via the federal e-rulemaking portal at http://www.regulations.gov, or by mail or fax. Faxed submissions, including attachments, must not exceed 10 pages and should be sent to the OSHA Docket Office at 202-693-1648. Comments submitted by mail should be addressed to the OSHA Docket Office, Docket No. OSHA-2011-0193, U.S. Department of Labor, Room N-2625, 200 Constitution Ave. NW, Washington, DC 20210.

A fact sheet about filing whistleblower complaints under the Affordable Care Act is available at http://www.osha.gov/Publications/whistleblower/OSHAFS-3641.pdf.

OSHA's press release on this issue can be found here.