by Brian Mahany

The title of this post, The Accidental Kenyan, comes from an editorial in the Vancouver Sun earlier this week. It is destined to become a classic among the tax bar so we have posted a link to the original article. Don Whiteley at the Sun does a much better job of telling the story, so we will stick to the lessons learned.

FATCA, for those non familiar with the term, stands for the Foreign Account Tax Compliance Act.  The law requires foreign banks to identify and report all U.S. taxpayers with accounts to the IRS. This means if you are an American but living in Canada and you have a bank account at Bank of Montreal, the bank must disclose your account to the IRS.

What’s the big deal about reporting your bank account? Plenty!

The penalty for failure to report foreign accounts can be as high as the greater of $100,000 per year or 50% of the high balance for each year the account is unreported. That means that a $100,000 account could generate penalties of a half million dollars or more. Why so much? Because the IRS can go back in time – no 3 year statute of limitations!

Most people that have unreported foreign accounts are not tax evaders. Congress may treat them that way (it’s easy to pick on the IRS but they are simply doing what Congress tells them to do), but most folks with foreign accounts are dual nationals, foreign born Americans sending money “home” to India or China or Americans living abroad. According to the Sun, there are about a million Americans living in Canada.

The U.S. is unique in wanting to tax people wherever they live. For most of the world, people pay taxes where they live. The U.S. wants to tax people living here and Americans living elsewhere. That’s the big deal behind the Sun editorial. I could be an American living in Montreal. I work there, bank there and pay taxes there. Because I am an American, however, the U.S. Treasury could claim all or most of my money there even though I paid taxes –  just because I didn’t know that I had to report my foreign accounts.

I will let you read Don Whiteley’s piece in the Sun. If you haven’t figured out why it’s called the “accidental Kenyan,” just know that the president’s father was born in Kenya and under Kenyan law the president could be a citizen there just like children of foreigners that are born on U.S. soil can claim American citizenship. With a million Americans living in Canada, the story is very appropriate.

If you are an American living outside the U.S. or a U.S. taxpayer with overseas brokerage or financial accounts, you may have significant tax liabilities to the IRS. Once the FATCA rules kick in for banks next year, the chance of getting caught increases dramatically. There is amnesty program – called the Offshore Voluntary Disclosure Program or “OVDI” – that may help many taxpayers. Those who were truly unaware of the reporting requirements may benefit from a traditional disclosure. Either way, taxpayers should do something before the IRS catches you. Amnesty isn’t available if the IRS finds you first.

The tax lawyers at Mahany & Ertl have helped many taxpayers with international reporting issues, OVDI and FBARS – the Report of Foreign Bank and Financial Accounts. For more information, contact attorney Bethany Kroes at (414) 223-0464 or by email at bckroes@mahanyertl.com. The author may be reached at brian@mahanyertl.com. All inquiries are protected by the attorney client privilege and kept in strict confidence.

Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota. IRS services available worldwide.

The post The Accidental Kenyan – What If Other Countries Adopted Their Own FATCA Law? appeared first on Due Diligence.

by Brian Mahany

Folks not familiar with the current IRS tax amnesty program for unreported offshore accounts are often confused about how much in penalties will be collected if they successfully enter the program. Assuming one qualifies, the program has a three tiered penalty system.

Before discussing the penalties, some history of the program is useful. The current program is called the 2012 Offshore Voluntary Disclosure Program, sometimes referred to as “OVDP” or “OVDI.”  Successful participants avoid criminal prosecution and huge civil penalties. How huge? How about $100,000 or 50% of the high balance for the unreported account for each year the account is unreported. Add the potential of an additional 75% fraud penalty and its obvious that the penalties can far exceed the amount in the account.

Entry is open to just about everyone with an unreported foreign bank or brokerage account. Exceptions include those taxpayers already under audit or criminal prosecution. If the IRS has already taken action against the bank where your account is located or obtained your name from the issuance of a “John Doe” informational summons (subpoena), you may not qualify either. In other words, the only way to take advantage of the program is to act quickly and enter before the IRS finds you.

As noted above, successful participants are eligible for greatly reduced penalties. For most people, that is a 27.5% penalty based on the year with the highest balance.  The IRS will look back up to 8 years. (Remember those who are caught by the IRS face penalties for each year the account was unreported.)

If the aggregate balance of all the unreported accounts never exceed $75,000, you may qualify for a the lower 12.5% penalty. We say “may” because like all things with the Tax Code, there are exceptions. One of the bigger exceptions includes foreign assets obtained with improperly reported funds.

For a few taxpayers, there may be the ability to qualify for an even lower penalty – 5%. There are three broad categories included in the 5% lowest penalty tier:

A) “Accidental Americans.” These are foreign residents who were unaware they were also American citizens.

B) Foreign residents with minimal U.S. income.  If you are a resident of a foreign country, made less than $10,000 each year in the U.S. and you have complied with the tax requirements of your home country.

C) Taxpayers who inherited an account in a foreign country and made minimal use of the account and has had minimal contact with the account itself and can prove that the funds deposited into the foreign account were made with post tax dollars.

The rules for the program are much more complex. There are many exceptions and the rules for the program are not well developed. (The OVDP program has only been in existence for a few months.)

If this isn’t complex enough, taxpayers who can demonstrate that their actions were not willful might do better opting out of the voluntary disclosure program completely. Although traditional disclosure methods usually involve an audit, the IRS can simply issue a warning letter or $10,000 penalty in non-willful violations.

If you have an unreported account, consider hiring a competent tax attorney immediately. The program is complex and the rules frequently change. A wrong move could involve possible prison and huge penalties.

The tax attorneys at Mahany & Ertl have helped many taxpayers with a wide variety of offshore reporting requirements including OVDI, the filing of FBARs (Report of Foreign Bank and Financial Accounts) opt outs, traditional disclosures and IRS criminal investigations. For a no obligation, confidential consultation, contact attorney Bethany Kroes at bckroes@mahanyertl.com or by telephone at (414) 223-0464. All inquiries are protected from disclosure by the attorney client privilege.

Mahany & Ertl – Giving Taxpayers A Voice. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota & San Francisco, California (coming soon). IRS and tax services available nationwide and around the world.

The post OVDP Penalties – 27.5%? 12.5%? 5%? appeared first on Due Diligence.

by Brian Mahany

A couple years ago, headlines like this would have been shocking. Although federal law has for years required U.S. taxpayers to declare their offshore bank and brokerage accounts, only recently has the law been actively enforced. Since the UBS scandal in 2008, the IRS and Department of Justice have been relentless in the pursuit of taxpayers with unreported offshore holdings. Last week a federal judge in California sentenced a husband and wife to a year and a day in federal prison after the pair pleaded guilty to filing a false tax return.

We first reported this story in June prior to the couple’s sentencing. Back then we predicted both a prison sentence and high fines. Unfortunately for Sean and Nadia Roberts, those predictions came true. Until caught, the Roberts had a pretty good life as flight instructors. The couple saved much of their money and put it in a Swiss account at UBS.

When the feds began investing UBS, the couple could have participated in the amnesty program, paid a 20% (or less) penalty and kept their money at UBS. Instead, they tried to hide their money by moving it around. According to court documents, they moved their money from Switzerland to Liechtenstein, Hong Kong and South Africa. Instead of putting the money in their own names, they created a constellation of entities and business accounts.

They were caught.

Opening a foreign account is legal. Not telling Uncle Sam, however, is a felony. Many people with foreign accounts simply don’t understand or know the law. Rarely are those folks prosecuted. Although they may be penalized and pay huge monetary penalties, the IRS does not criminally prosecute unless they can prove that a taxpayer’s actions were “willful.”

Unfortunately, creating nominee accounts, moving money with no business purpose and transferring your account after you learn that a bank is under investigation are all red flags. Because their returns did not disclose the Swiss and other foreign accounts, the Roberts will each be serving year long prison sentences.

If that is not bad enough, they were also ordered to pay the IRS $3,200,000!

The penalties for an unreported account are the greater of $100,000 per year or 50% of the high account balance. The IRS can go back years often making the fines larger than balance in the account! If you can prove that your failure to report was not intentional, however, the penalties are generally much lower and are even waived sometimes.

Presently the IRS has an amnesty program called the Offshore Voluntary Compliance Program (or “OVDI” or “OVDP” for short). Participants can pay a reduced one time penalty instead of yearly penalties and also avoid prison.

The rules for offshore reporting change frequently. If you have an unreported foreign account, speak to a lawyer or CPA knowledgeable about foreign reporting. (Most are not.) Amnesty is not always the best option.

The tax lawyers at Mahany & Ertl have helped many taxpayers with a wide variety of offshore tax issues including FBARS (Report of Foreign Bank and Financial Account), OVDP, opt-outs, foreign gift reporting and the new FATCA (Foreign Account Tax Compliance Act) law. If that sounds like “alphabet soup,” then you really need to find someone who can help you. Once you get in compliance, staying there is usually neither expensive nor difficult.

Whatever you do, don’t try to outsmart the IRS or ignore the problem. Like Sean and Nadi Roberts found out, people do get caught and do go to prison.  While prison is never enjoyable, Sean Roberts is almost 80 years old and his wife Nadia is in her 60′s. Their golden years will be spent behind bars or scraping together millions of dollars to pay the IRS.

If you have questions or an unreported account and want to learn more about your options, contact attorney Bethany Kroes at bckroes@mahanyertl.com or by telephone at (414) 223-0464. All inquiries are protected by the attorney – client privilege and kept in strict confidence.

Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and coming soon, San Francisco, California.  IRS services available anywhere in the United States and worldwide.

The post Two Taxpayers Who Failed To File FBARS Headed To Prison appeared first on Due Diligence.

by Brian Mahany

First is was unreported Swiss bank accounts. Then the Caymans. Then India, China and the list goes on. Now the IRS and South Korea’s National Tax Service are teaming up and comparing notes. For many Americans with ties to South Korea, that could mean trouble and expensive penalties.

South Korea and the U.S. have entered into a joint criminal investigation pact. Both nations have agreed to assist one another in the enforcement of foreign reporting requirements. For Americans, that means having an unreported bank or brokerage account in South Korea (or in any other foreign country).

Most taxpayers with unreported accounts simply have no idea that the law requires you to report the account and pay taxes on any interest or dividends. Although the requirement to file annual FBAR forms (Report of Foreign Bank and Financial Accounts) has been on the books for years, enforcement really didn’t begin until 2008.

Violations can earn you a penalty of $100,000 per year or 50% of the highest account balance for each year the account was unreported. With the IRS looking back 8 years, the penalties can easily exceed the entire account balance. Of course, if the IRS can prove your failure to file an FBAR was intentional, possible penalties include 5 years in federal prison.

If the announcement of the joint enforcement effort isn’t enough, the feds already convicted at least two Korean – Americans this year, Insoo Kim and Chung Choi. Both men were recently sentenced to prison for their tax crimes. For non naturalized citizens, those convictions could lead to deportation. (See our post from February 2012)

There is an amnesty program (the Offshore Voluntary Disclosure Program, sometimes referred to as OVDI or OVDP) that can help those with unreported accounts. The program has lower penalties and comes with a “get out of jail” pass too. There is a catch, however. Amnesty is not available if the IRS finds you first. That means if you receive an audit notice or the South Korean NTS supplies your name to the IRS, its too late for amnesty.

Amnesty is not always the best option. For those that can prove their actions were not intentional, a traditional voluntary disclosure or opt out may be the better move and in the right circumstances, result in no penalties.

If this sounds confusing, it is. The rules are constantly changing and the IRS is getting better at identifying U.S. taxpayers with unreported foreign accounts. If you fall into that category, contact us. We have helped many foreign born Americans, dual nationals and Americans with overseas accounts.

For more information, contact attorney Bethany Kroes at bckroes@mahanyertl.com or (414) 223-0464. All inquiries are protected by the attorney – client privilege and are kept in strict confidence.

Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and coming soon, San Francisco, California (tax only). IRS legal services available nationwide and worldwide.

The post Hiding Money From Uncle Sam In Korea? The IRS and NTS Are Looking For You appeared first on Due Diligence.

by Brian Mahany

We are never surprised anymore when the feds announce a new wave of indictments against taxpayers with unreported accounts. Until 2008, the IRS didn’t look very hard and prosecutions were few. As the economy has soured, tax authorities around the world have become quite creative in finding new revenue streams.

To enforce the tax laws, the IRS relies primarily on a system of voluntary compliance. The government assumes that most people will do the “right thing” and not cheat on their taxes. All of us have some larceny in our hearts, however, and the feds know that too.

The IRS operates one of the most effective publicity machines in the nation. Every year Uncle Sam makes sure that a mix of tax cheats are prosecuted. High profile, the guy next door, whites, blacks and in each of the 94 federal judicial districts.  Why? The governments wants to make examples out of people. If we read that Joe the local barber went to jail for cheating on his taxes we may worry just enough to not cheat or at least keep the cheating to a minimum.

When it comes to foreign accounts, the IRS has been prosecuting not only taxpayers but the accountants, lawyers and bankers that helped the taxpayer set up an unreported account. The bigger question is how do the feds with guns and calculators (IRS’ Criminal Investigations Division) find the people to prosecute?

Great question and the answer gets more and more complex daily.

The IRS indicts bankers and accountants primarily to compel them to cooperate and give up the names of their U.S. clients with unreported accounts. If you were a banker facing prison wouldn’t you “sing” in exchange for a lighter sentence? Most do.

Beginning next year Congress requires foreign banks to disclose the names of account holders with ties to the U.S. Those ties may include a U.S. passport, U.S. mailing address or even a U.S. accountant. Technically, Congress doesn’t have jurisdiction to regulate foreign banks but no bank is isolated anymore and all transfer money to or from the U.S.

We are also good at convincing our international allies to assist us with our enforcement efforts. After all, they are in the same boat we are and busy looking for their own citizens with hidden accounts.

Some clients they were smart in how they repatriate their unreported funds. Instead of having a check mailed here (checks and wire transfers leave paper  trails) they instead simply use a debit card or credit card to spend money here. One problem, though… those cards are either part of a debit card network or are cleared through Visa, Master Card and Discover. Yup, those organizations are subject to the IRS’s subpoena power.

The government has also been signing tax exchange agreements with many, many countries. All the nations are doing it. When the U.S. negotiated a new agreement with Panama it wasn’t long before we stationed IRS agents there.

Panama? Yes, it has been a favorite place for expats to hide. We also have agents in many other countries as well.

With a tax exchange treaty, the IRS can just have the [fill in the blank] cops do their dirty work.

One of the most aggressive nations in unearthing the identities of citizens with hidden accounts is Germany. Last week Swiss banking giant Julius Baer advised its German customers that an employee may have stolen sensitive client data. Germany frequently pays for stolen client lists. Unfortunately for those in the U.S. with unreported accounts, Germany shares it data with the IRS.

According to a recent Bloomberg report, UBS, Coutts (Scotland) and Merrill Lynch Bank Suisse SA have all reportedly investigated thefts related to the identity of foreign account holders. (None have reported finding any problems.)

What’s next? Who knows. One thing is certain, however, Uncle Sam and the rest of the developed world is getting better at finding unreported accounts.

If you have an unreported foreign account, take advantage of the IRS’ current amnesty program. For a one time penalty (plus tax, of course, on any unreported income), taxpayers avoid audit, criminal prosecution and huge civil fines and penalties – penalties that can be far in excess of the highest historical account balance.

The amnesty, called the Offshore Voluntary Disclosure Program (OVDI for short) has no end date but you are only eligible if you enter the program before the IRS finds you. If they knock on your door or get your name from a foreign bank first, all bets are off.

Many of our clients truly had no idea that foreign bank accounts must be disclosed annually. For these folks, a traditional disclosure might eliminate all or most penalties. There are no guarantees and you must really be able to prove that your failure to file an FBAR each year was not intentional. (FBAR is short for Report of Foreign Bank and Financial Accounts).

There are other options too for small accounts (under $75,000), “accidental Americans” and certain narrowly defined “low risk” taxpayers.

Our best advice is to consult with a really good tax lawyer who concentrates in foreign tax reporting.

The tax attorneys at Mahany & Ertl have helped many foreign taxpayers, dual nationals and American expats. Foreign partnerships and corporations, FBARs, tax amnesty, voluntary disclosures and criminal investigations are all things we know and handle daily.

For more information contact attorney Bethany Kroes at bckroes@mahanyertl.com or by telephone at (414) 223-0464. All inquiries are fully protected by the attorney – client privilege and kept in strict confidence.

Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and coming soon, San Francisco, California.

The post Think No One Will Discover Your Offshore Account? Read This! appeared first on Due Diligence.

by Brian Mahany

We frequently encounter absolute shock when we tell prospective clients about the potential penalties for an unreported foreign account. Miss filing an FBAR (that’s Treasury jargon for the Report of Foreign Bank and Financial Account also known as a TD F 90-22.1 form) for just 1 year and the penalty can be $100,000 or 50% of the highest balance of the over reported account. Non willful violations are less but still can hurt.

There are amnesty programs including special programs for people who inherited an offshore account, accounts with small balances and a streamlined program for ex pats living overseas. The penalties for the options vary dramatically.

If you can prove that your failure to report a foreign account was accidental, the penalty could be $10,000 or even zero. Elect to go the standard amnesty route and the penalty is 27.5% but just imposed on 1 year. We know that even the amnesty reduced penalties are difficult to swallow. Some folks elect to take their chances and hope they won’t get caught simply because they can’t afford the penalties. That is a mistake!

Like any tax debt, the IRS wants to get paid promptly. The best option is always to pay the amnesty penalties in full. Not everyone can, however.

There is a popular misconception that penalties must be paid in full in order to take advantage of the amnesty plan. That belief is wrong. Payment plans are available and sometimes even an offer in compromise may be available.

For those taxpayers that still hold their offshore accounts, negotiating a payment plan may be difficult. After all, the IRS knows you have access to the money. Sometimes, however, the account may belong to multiple family members or the account may have already been closed at the time of the amnesty application. (Many foreign banks have been closing accounts belonging to Americans. Simply repatriating the money doesn’t spell an end to the obligation to file FBARs.)

If the only thing holding you back from the IRS’ amnesty plan  - called the Offshore Voluntary Disclosure Program or OVDI / OVDP for short –  is lack of funds, give us a call. We specialize in foreign reporting requirements including OVDI, FBAR filings, foreign partnership and gift returns and foreign real estate transaction reporting. Don’t miss the benefits of the IRS amnesty programs because of a cash flow crunch.

For more information, contact attorney Bethany Kroes at bckroes@mahanyertl.com or by telephone at (414) 223-0464. All inquiries are protected by the attorney – client privilege and kept in strict confidence.

Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. IRS tax services available worldwide.

Need more information? Our Due Diligence blog has a search engine located in the upper right hand corner. For more information on specific tax topics, just click the tax tab or type in the name of a particular tax topic such as “OVDI”  or “FBAR” in the search bar. We have posted hundreds of informative articles on our site.

The post Worried About OVDI / OVDP Penalties? Don’t! Payment Options Are Available appeared first on Due Diligence.

Airport construction contracts can involve billions of dollars. Much of that money comes from taxpayers. As I write this post from LaGuardia Airport, a billboard boldly claims that the new LGA makeover is estimated to cost more than $1,000,000,000.00 – that’s right over $1 billion!

We previously successfully prosecuted a corrupt contractor who supplied non-compliant steel components used in the construction of the Miami Airport intermodal center.

The Justice Department announced this week that former Detroit Metro Airport utilities manager James Warner was charged with receiving $5 million in bribes.

Because these airport contracts involve so much money, the inclination to raid the cookie jar or rip off the airport authority is simply too great for many. Today, its Michigan taxpayers that are taking it on the chin. But Warner isn’t the only one connected to the ever widening airport construction probe. He is the third person indicted and probably not the last.

According to a recently unsealed indictment, Warner was charged with conspiracy, federal program bribery, theft from a federally funded program, conspiracy to commit money laundering and obstruction of justice.

Warner was a manager with the Wayne County Airports Authority, operator of the Detroit Metro Airport. As a manager, Warner’s duties included oversight of maintenance and inspections. The feds say that he had the authority over certain contracts. Those contracts included a contract with Pitrula & Sons, a key paving and water main vendor for the airport.

Prosecutors say that William Pitrula, owner of the company bearing his name, and Warner conspired to create phony invoices for work at the airport. Those invoices would “grossly inflate” the amount of work and dollar value of that work. When Pitrula got paid from the airport, he would allegedly kickback some of the money with Warner. Both men profited while taxpayers were left writing the checks.

The feds got involved because federal transportation monies help fund work at the airport.

Prosecutors say this cozy arrangement allowed Pitrula to get $18,000,000 in payments from the airport and kickback $5 million of those payments to Warner.

This form of bribery and theft is unfortunately common place in many government construction projects. But there is more.

In a separate conspiracy charge, prosecutors say that Warner tried to shake down another vendor, Envision Electric. They were the company awarded the contract to maintain the airport’s parking garages.

Prosecutors say that Warner fed inside information to Gary Tenaglia, owner of Envision. This helped Envision win the lucrative maintenance contract.

As maintenance inspector, Warner would sign off on work performed by Tenaglia’s company even if that work was substandard. Warner then demanded a kickback.

Court records say that “James Warner told Gary Tenaglia he needed to pay to be part of the ‘brotherhood’ at the airport. One night, James Warner took Gary Tenaglia out to dinner to discuss the kickback arrangement. During the meal, [Warner] wrote ‘5k’ on a napkin. He folded it and slid it across the table to Gary Tenaglia. After [Tenaglia] acknowledged the meaning of the writing on the napkin, James Warner retrieved the napkin and ate it.”

Warner also allegedly told Tenaglia, “You wouldn’t be here if it weren’t for me, your ass would be out.”

Media reports say that the feds have already seized $3.9 million from Warner and $7.5 million from an unnamed contractor.

Both contractors are expected to plead guilty and cooperate with prosecutors. Warner was just arrested this week and pleaded not guilty.

Payoffs from Contractors – Opportunity for Whistleblowers

Many readers are thinking this is business as usual in Detroit. It is and in many other cities across the United States. It doesn’t have to be that way, however.

We believe that several people knew something was amiss. Yet no one stepped forward. Few do. Some don’t want to get involved. Some don’t want to lose their job and some worry that they might get in trouble themselves for going along with things or lying for their boss.

Congress understood this and passed the False Claims Act (“Lincoln Law”) during the 1860’s. Over 150 years later that law is still on the books and has become one of the most important anti-fraud tools available to prosecutors.

To make sure that concerned citizens step forward, Congress allows whistleblowers to claim a piece of whatever prosecutors obtain from wrongdoers. There are powerful anti-retaliation provisions in the law too. (Michigan has a similar state whistleblower law but is applicable only to state funded Medicaid fraud. Because the Wayne County Airports Authority relies heavily on federal transportation monies, defrauding the county agency becomes a federal offense.)

As noted above, some would be whistleblowers worry that because they have gone along with things for so long, they too can get in trouble. The odds of that happening, however, are remote.

The Justice Department is after the corrupt politicians, government employees running these shakedowns and the contractors themselves. They want the kingpins, not the minions.

Even if you were a manager, it is better to cooperate early and grab the “get of jail free” card. The alternative is spending your life looking over your shoulder. We can help you find peace of mind by sitting down with prosecutors and insuring you remain a witness and not a target.

Each year the government pays out hundreds of millions of dollars of whistleblower  You can be the next recipient. But you have to be the first to file and you have to possess inside information. The fraud also has to involve federal program

Ready to learn more? If you are living in Georgia, visit our Michigan whistleblower page. Living somewhere else? Our government contractor fraud page has lots of helpful information as well.

Have specific questions or want to learn if you have a claim? Contact us by email *protected email* or phone (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and there is never a charge for a consultation. We have recovered over $100 million for our whistleblower clients and are still just as eager to help the next.

MahanyLaw – America’s Whistleblower Lawyers

The post Detroit Metro Bribery Scandal? Again? (Whistleblower Reward Post) appeared first on Mahany Law.

Statistics can be fascinating. Today we are bombarded with almost too much data and information. By using statistics, we can better digest that information and bring order to raw data.

Of course, with so much attention focused today on the Bitcoin and cryptocurrency craze, we are interested in finding out more about the folks investing in cryptos. Our friends at finder.com were only too happy to share their statistical research with us.

Here is what we learned:

First, cryptocurrency investment certainly has become mainstream. 7.95% of Americans have invested in a cryptocurrency or ICO (initial coin offering).

Bitcoin is the most common cryptocurrency investment… 5.15% of Americans hold Bitcoin while 1.80% are holding Ethereum. And what is the average investment amount? For Bitcoin holders, the average is $3450. Ethereum holders, however, only purchased an average of $1243.

But what do all these statistics mean?

For us, it means cryptocurrency isn’t a passing fad. Millions of Americans have invested. And because the market is so new and unregulated, it is also filled with scams.

Who are the victims of those scams? Once again, we can turn to the statistics. At one end of the scale are baby boomers such as myself. Apparently, we have not felt the bug to purchase cryptocurrencies. Just 2.24% of baby boomers claim to have invested.

On the opposite side of the spectrum are millennials. Almost 18% of them are invested in cryptocurrency.

And why haven’t more people invested?

• 40% of Americans say they don’t see the need.
• 35% believe that cryptocurrencies are too high risk
• 27% don’t understand blockchain or how value is assigned to virtual money
• 18% believe that cryptocurrencies are a scam

And a final interesting statistic? Men are almost three times more likely to purchase cryptocurrencies than women.

Our job as fraud lawyers is to best protect investors of any age or gender from becoming fraud victims. In the case of cryptocurrencies, prevention takes on far more importance.

Why? Because recovering money in cryptocurrency scams is often impossible. The currencies themselves are impossible to trace. When your money is gone, its gone.

Although Bitcoin and Ethereum are considered legit by most investors, there are new ICO offerings weekly. And many of those are scams.

Because the scammers frequently require investors pay for their investment in Bitcoin and often use fictitious addresses, recovering money from these scams is difficult.

Recovering Cryptocurrency Losses from Financial Professionals

Although we post plenty of stories about cryptocurrency fraud, we don’t profess any magic abilities to recover money from these schemes. That is why we emphasize caution and prevention.

There is an exception, however. An ever increasing number of financial professionals are getting involved in cryptocurrencies. Every investor that decides to invest in an ICO instead of stocks or bonds, represents a lost commission.

Recently we have seen an uptick in ICOs and cryptocurrency ETFs being offered by stockbrokers, investment advisers and other financial professionals. When they fail to conduct proper due diligence or make an unsuitable recommendation, both they and their employers can be held responsible for any investor losses.

If you lost $1 million in a cryptocurrency scheme or ICO and purchased your investment with the help of a financial professional, we may be able to help.

For more information, visit or cryptocurrency, ICO and Bitcoin fraud page. Want to know if you have a case? Give us a call. All inquiries are kept confidential and are offered at no fee. For more information contact attorney Brian Mahany online, at *protected email* or by phone at 414-704-6731.

Special Note for ICO Insiders

We are a leading SEC Whistleblower Reward law firm. If you work or worked inside one of these businesses and have information about offering fraud or phony books and records, we definitely want to talk to you. The SEC will allow you to remain anonymous.

The post Cryptocurrency by the Numbers appeared first on Mahany Law.

The Supreme Court’s recent Murphy Oil decision regarding class action waivers is a disaster for American workers and those that believe in good corporate governance. Last week a closely divided court ruled that companies can force employees to waive their right to sue for employment law violations. Yes, as a condition of an employment your boss can make you waive your right to sue or participate in a class action. (Read more about the decision on our FLSA Employment Law information page.)

In 2012, the National Labor Relations Board (NLRB) took the position that employers couldn’t force workers to waive certain fundamental rights including the right to seek judicial redress of employment law violations… violations that include minimum wages, pay for all time worked or overtime pay.

Two federal appeals courts quickly backed the NLRB. The 7^th Circuit (covering three Midwest states) and the 9^th Circuit (9 western states including California, Alaska and Hawaii) said the National Labor Relations Act precluded lawsuit waiver clauses.

Passed in 1935 during the Great Depression, the Act prohibits a wide variety of management practices that hurt American workers.

Despite a large number of federal courts supporting the NLRB’s interpretation of the Act, the 5^th Circuit Court of Appeals ruled in favor of employers and the lawsuit / class action waivers.

That split among courts made the issue ripe for review by the U.S. Supreme Court. That review happened on May 21^st, 2018. Five justices lead by conservative Justice Neal Gorsuch ruled that the class action and lawsuit waivers were legal. That means that employers can force workers as a condition of employment to give up these fundamental rights.

As a practical matter, the Supreme Court has closed the courthouse doors to American workers. It is simply not economical for lawyers to take single cases, especially if they must go through expensive arbitration. That means workers denied proper pay are going to have to handle their own case without a lawyer.

We have no doubt that many either won’t bother or will lose.

In a perfect world, employers would clean up their act and insure that all workers are properly paid. We expect the opposite, however.

With the NLRB and lawyers effectively neutralized, workers that are subject to an arbitration provision or class action waivers are on their own. No one is left to protect their rights.

And so what are employers saying? One prominent employment law firm that represents employers (not workers) had this to say,

“In light of the Supreme Court’s ruling, employers should revisit their employment agreements and consider including arbitration provisions waiving class and collective actions, particularly when assessing ways to minimize significant liability for wage and hour claims. Given the employee-focused framework of the FLSA, the minimal pleading threshold for bringing suit, the potential for large attorney fee awards, and the abundance of collective action proceedings generated by the FLSA, forcing individual arbitrations on these issues could provide a means of reducing liability exposure and defense costs.”

You read that correctly, the way to “minimize liability” isn’t to follow the law. Instead, minimizing liability is making sure your workers can’t sue!

We don’t blame the defense law firms for giving this advice. The push to curtail Fair Labor Standards Act (FLSA) lawsuits comes from the U.S. Chamber.

The Chamber has long been working to dilute both the FLSA and the National Labor Relation Act. A Chamber report had lots to say about the Supreme Court’ decision to take up the issue, and in particular the NLRB: “It has overturned numerous longstanding precedents, challenged many common sense employment policies, and created a great deal of uncertainty for both workers and employers.”

Murphy Oil – How Did We Get Here?

Last week’s landmark Supreme Court decision has a humble beginning. Murphy Oil Company operates gas stations in Wal Mart parking lots.

In November 2008, Sheila Hobson applied to work as an attendant at a Murphy Oil station in Calera, Alabama. As a condition of employment, Hobson had to agree to a provision waiving her right to pursue employment-related claims through a class or collective action in any forum and, instead, compelled her to pursue claims solely through individual arbitration.

In June of 2010, Sheila joined up with three other women who worked as cashiers or assistant managers for Murphy Oil. The group said they were required to perform fuel surveys before and after their shift. A fuel survey involves checking the prices of fuel at other area gas stations. Because they must perform these surveys before and after their shift, they were not paid for their time.

The women sued. The issue soon became whether the women even had the right to sue. What started out as a case about unpaid work time soon became a critical legal issue, can you be forced to give up your right to sue in order to get hired?

Ultimately the NLRB would take up the cause for Sheila and her co-workers.

While the case was pending before the U.S. Supreme Court, the Justice Department engaged in an extremely rare move and took the side of the employer even though another federal agency – the NLRB – had sided with the employees.

Class Action Waivers, the FLSA and the Aftermath

Can all of this be fixed? It can but at this point it will take Congress to clarify the law and make it clear that greedy businesses can’t take away fundamental rights of workers.

We expect a wave of new employment agreements to sweep the country. HR departments are already busy rewording their contracts.

There is still time, however, to bring actions for violations of federal minimum wage laws and overtime rules too.

We urge anyone who believes they are not being properly paid to contact us immediately. Time is running out. Under existing FLSA rules, companies can be held responsible for up to 3 years of wages. (More in some states such as California.)

For more information visit our FLSA FAQ page or contact us directly. Attorney Brian Mahany can be reached online, by email or by phone (202) 800-9791.

The post FLSA Update – Supreme Court and Class Action Waivers appeared first on Mahany Law.

The Centers for Disease Control and Prevention says that 1 out of 59 American children are autistic. Hundreds of thousands school age children have autism, a range of conditions characterized by challenges with social skills, interpersonal relationships, repetitive behaviors, speech and nonverbal communication. Medical professionals characterize it as a developmental disability, although many people diagnosed with the disorder are very highly functioning.

As society focuses more on autism, new and competing therapies emerge. One of those oldest therapies is Applied Behavioral Analysis (ABA). Treatment opportunities are rapidly expanding as many states have now required Medicaid and private health insurance to pay for ABA and other autism therapies.

One of the largest provider of autism care today is Centria. As of February, the company boasted 5000 employees providing services in 9 states. (Arizona, California, Michigan, New Jersey, New Mexico, Ohio, Oregon, Texas and Washington.)

Earlier this year a group of whistleblowers claimed that Centria was defrauding Medicare. Despite tough anti-retaliation laws, the company sued the employees for defamation. The battle lines were quickly drawn. Centria claims that it runs a clean operation. The three former employees paint a much different picture.

The whistleblowers claim the company is guilty of a wide range of fraud including forgery, HIPAA (patient privacy) violations, billing fraud, falsifying healthcare records and employing unqualified people. As whistleblower lawyers, we see the theme of their claims repeated in many cases – profits before patients.

Usually whistleblower claims would be sorted out years down the road in court. The company is seeing red, however, and wants not only the fraud claims dismissed, it also wants to three whistleblowers to be punished.

Retaliation against whistleblowers can be quite effective, although its illegal. By filing a lawsuit against the whistleblowers, corrupt companies hope to send a stern warning to would-be whistleblowers. “If you blow the whistle, we will punish you.” That sort of bully behavior typically has a chilling effect on other workers.

The lawsuits come on the heels of an $8 million state grant awarded in 2017 to Centria. The monies are to be used to extend autism services and Applied Behavioral Analysis to an underserved group of patients, many in the poor and minority communities.

The company plans to add 1200 news jobs in Michigan, many of them ABA therapists.

Applied Behavioral Analysis – Treatment or Scam?

Many of the “therapists” working for Centria are classified as “behavior technicians.” Despite the fancy title, these technicians do not need a college education and only make $13 or $14 per hour to start.

Lack of proper training for the techs doesn’t mean the company is a scam. It certainly raises red flags for us, however.

According to Centria’s lawsuit against its former employees, the three whistleblowers defamed the company by releasing a so-called “law enforcement summary.” In that summary, the trio claim that the Centria and some of its executives engaged in serious wrongdoing including:

1. Engaged in a racketeering scheme specifically designed to falsely diagnose kids with autism who either do not have autism or have milder symptoms of the disorder. By misdiagnosing kids as autistic, the company could bill Medicaid or private insurance upwards of $50,000 per year per child.
2. Forged parent signatures on patient care contracts. They claim this was especially prevalent with parents who did not speak English.
3. Defrauded Medicaid.
4. Violated HIPAA and patient confidentiality rules by not properly securing patient files.

The company, of course, vehemently denies the allegations.

Despite the company’s denials, the Detroit Free Press says that it has confirmation that the Michigan Attorney General’s Office is investigating Centria.

Among the more serious allegations are the claims that the company misdiagnosed kids as having autism and engaged in billing fraud. The latter involves claims that the company pushed parents to enroll kids in up to 40 hours a week of therapy even if the kids didn’t need such intense care.

We often see cases where dishonest healthcare companies are more motivated by profit than patient wellness.

In another instance of billing fraud, the Detroit Free Press claims that some Centria employees say they were to pushed to bill for services that were never even rendered. In 2017 the company was cited for billing for home therapy for a patient that was actually in the hospital at the time.

The whistleblower claims against Centria mostly center on billing and medical necessity determinations, but what about the therapy they are providing? Is Applied Behavioral Analysis even effective? (Because it requires so many hours, it is certainly one of the most expensive treatment options.)

ABA is the leading therapy for kids diagnosed with autism. And companies like Centria are happy to provide therapists and bill Medicaid and Medicare for up to 40 hours per week at $55 per hour.

But is it effective? ABA certainly has it advocates. But there are fierce critics who say it is cruel and based on the premise that autistic kids need to be “fixed” and made to be more “normal.” A growing body of behavioral science says that we should accept neurodiversity and recognize that kids with autism are different. We can help them function and communicate but they don’t need 40 hours a week of a forced regimen in an effort to make them “more normal.

One women interviewed said that her son is the product of ABA. After hundreds of hours of Applied Behavioral Analysis, her son can now approach people on the street and say, “Hello, what’s your name.” She worries, however, that her son is becoming a robot. She says he will frequently walk away without waiting for an answer. She doesn’t think he even knows why he is asking people on the street for their name. instead “he just knows to do his part.”

Whistleblower Awards for Autism Scams

We are not medical doctors or behavioral therapists. The debate over Applied Behavioral Analysis is likely to rage on for years. We do know, however, that our children deserve the best care possible. And nothing good can ever come from companies that put profits before kids, that misdiagnose or that bill for unnecessary services or services never rendered.

Is Centria guilty? We will leave that up to the Michigan Attorney General’s Office and the three brave whistleblowers who stepped forward with their claims.

Because ABA is so expensive, we suspect there are real fraudsters in the autism therapy space. Companies that use unqualified therapists (licensing requirement vary widely between states). Companies that bill for more services than were actually provided. And companies that bill for services never even performed.

The fraud fighters at MahanyLaw are ready to help stop the greed and corruption. We also work hard to get our clients the highest whistleblower awards allowed by law.

Awards? YES!

Whistleblower Awards for Information about Autism Therapy Billing Fraud

29 states and the District of Columbia have Medicaid fraud whistleblower laws that give whistleblowers up to 30% of whatever the government recovers from wrongdoers. Multimillion dollar awards are common.

In addition to the state Medicaid programs, California and Illinois have private insurance whistleblower award programs.

Finally, the U.S. Department of Justice can issue awards in all 50 states and Puerto Rico for information about Medicare fraud and the federal match on Medicaid.

All of these laws require filing a sealed lawsuit in court. That scares away some folks but it shouldn’t. We can handle everything from the investigation to filing of the complaint to meeting with investigators and even trying the case if it comes to that.

The bottom line? Congress and more than half the states have passed powerful laws to encourage whistleblowers to step forward and address fraud and greed. In cases like misdiagnoses, there is another reason to step up. Patient safety.

Being diagnosed with autism can have a lifelong stigma. And it is expensive. When kids are young, an incorrect diagnosis can stick with them and actually impair their development. And for what reason? So a company can pocket an extra few bucks?

This story wouldn’t be complete without addressing retaliation. We have only seen one client ever sued by a wrongdoer. In our experience courts do a remarkable job of protecting whistleblowers. They know companies want to silence anyone who rocks the boat and make an example of them so others don’t follow in their footsteps.

The federal False Claims Act and most states have powerful anti-retaliation laws. We can’t prevent the occasional employer who files a frivolous lawsuit, but we can and will prosecute them for damages. Under federal law, those damages include double damages and attorney fees.

If we take your case we can help you avoid being sued and protect you if you do suffer retaliation.

For more information, visit our healthcare fraud whistleblower information page. Have questions or want to see if you qualify for a reward? Contact us online, by email *protected email* or by telephone 414-704-6731.

All inquiries are protected by the attorney – client privilege and kept confidential. There is no fee for a consultation and our services are available on a contingent fee basis meaning you never owe us anything unless we collect money for you.

MahanyLaw – America’s Healthcare Whistleblower Lawyers 

The post Autism, Medicare Fraud & Applied Behavioral Analysis appeared first on Mahany Law.

Is McDonald’s Cheese Overcharge Suit a Tort Reformists’ Conspiracy? Florida Attorney John Uustal Is Offering a $100,000 Reward to Find Out 

You’ve probably already heard about it. Somebody is going to great lengths to turn one arguably ridiculous lawsuit into a big news story. Here’s the facts, in case you are one of the few who haven’t heard: Two burger enthusiasts with a dislike for cheese are suing McDonald’s, and looking to hit the company with a massive class action. They, and their obscure Florida attorneys, claim the fast food giant’s practice of charging the same for a Quarter Pounder after removing the cheese, is in violation of antitrust regulations and constitutes unjust enrichment.

Sounds like pure bullsh*t to us. Apparently, however, the two Floridians bringing this dubious lawsuit are outraged that they must routinely pay between 30 and 90 cents for cheese they don’t want, and didn’t receive.

Consumer protections are what I live for. When we fight greedy and corrupt corporations, we are doing so on behalf of both our individual clients and society as a whole.

In our line of work, we often fight over life and death issues. We have fought physicians that prescribe unnecessary medications. Clinics that make patients receive surgeries they don’t need.

We have fought for for thousands of people who lost their homes after the 2008 banking crisis, for the millions of people who get screwed by the system on a regular basis. This is our life’s work. That is why, when lawyers are being accused of being the soulless and greedy ones themselves, I have to take a stand.

What does this have to do with paying with a nonexistent slice of cheese? you may ask yourself. Well, unsurprisingly, a lot.

The fact is, if you do the math, the people who are benefitting the most from the so-called frivolous lawsuit against McDonald’s are not consumers, but rather, the usual suspects who lobby and fund election campaigns in the hope that Americans will be once and for all deprived of their right to receive adequate compensation when corporations destroy their lives, defraud taxpayers, and break the rules that are supposed to protect us all. I am referring to tort reformists, who have enjoyed quite the bonanza in the current political scenario.

So, pro-tort “reform” bloggers are making headlines all over the web. ‘This cannot be, greedy lawyers are a burden on justice, cap damages now!’ ‘Lawyers are ruining America with their frivolous lawsuits,’ the list is endless. I invite you to Google the case, and you will see. They are everywhere, and they are not coming after us, whistleblower attorneys, they are coming after you. They are coming to strip you of your rights, and they are bringing the big guns.

Last week the so called “tort reform” movement (big business) won an important victory in the U.S. Supreme Court when a divided court ruled 5 to 4 that companies could force workers to give up their right to sue for employment law violations. Consider the minimum wage worker being denied minimum wage or forced to work off the clock. Now it is legal for an employer to force her to give up her right to sue.

The true goal of so-called tort reform is to close the courthouse doors to ordinary working class Americans. And one Florida lawyer, John Uustal, is fighting back. And putting his money where his mouth is. He is offering a $100,000 reward to expose what he believes is the latest dirty trick foisted on the public by greedy business owners.

John Uustal, a Florida lawyer who went after Philip Morris tobacco to try to save a woman’s life, who risked the survival of his then young firm to hold Toyota and Firestone accountable for deadly accidents caused by defective parts, has an interesting theory: Is it not possible that the ‘who took my cheese’ lawsuit is a fabrication of tort reformists to incite outrage and advance their cause?

In his announcement of a $100,000 reward for any whistleblowers with information about a conspiracy, Uustal writes:

“Could the entire lawsuit be a scam? A scam to create more smoke for corporate lobbyists so they can destroy our rights to get justice when a manufacturer knowingly and intentionally refuses to fix a defective product that kills, or a bank steals money from its customers?

Look at how the tort reform lobby is already using this new McDonald’s lawsuit. They’re perpetuating the idea that lawyers are shifty scammers. They are brainwashing us to think that lawsuits in general are frivolous. “

Where a naive layman sees the ultimate frivolous lawsuit, one that is bound to lose the lawyers a significant amount of money, Uustal sees the strings of their masked intentions. The puppeteers, he suspects, are the same individuals behind tort reform bills and the constant demonization of lawyers in the media.

If Uustal is right, those conspirators even lack creativity; you can see the the top of their heads behind the curtain as the puppets play their scripted show. The choice of McDonald’s as the target of the lawsuit is very telling. After all, it is the ‘hot McDonald’s coffee’ lawsuit from the 90s that is perhaps the most remembered ‘frivolous’ lawsuit in the public’s mind.

If Uustal is right, tort reformist just thought, ‘well, it worked once, let’s try suing McDonald’s over some ridiculous issue again!’

If Uustal is right, we really need to pay attention. We can no longer take things at face value.

If Uustal is right, I really hope he catches the villains this time.

In the opening days of the Trump administration, Republicans pushed through a class action bill in Congress. We say “pushed” because the legislation was passed without any public hearing or even a committee hearing. Republican leadership, acting with the blessings of the U.S. Chamber, wanted to gut class action lawsuits. They did so by creating a catchy title, the “Class Action Fairness Act,” and insuring that no one would have the opportunity to ask any questions.

Thankfully, Senators on both sides of the aisle were not as reckless. The legislation died, at least for now. But if Uustal is right, the reformers and big business lobby will be back, this time decrying how out-of-control lawyers have become. And the McDonalds cheeseburger lawsuit will be their new rallying cry.

We agree that frivolous lawsuits should be curbed. Federal judges already have the power to sanction lawyers who bring these nonsense lawsuits. Curbing all class actions, however, is not the solution.

Why not? In smaller cases, no lawyer will take a single claim. Let’s say you have a Wells Fargo checking account. You notice that they are charging you too much in fees each month. Looking online, you see that everyone is complaining about these improper fees.

Try to find a lawyer willing to take a single case for $30 in fees. Obviously no one will. The only way a lawyer takes that case is through a class action. Take away the right to bring a class and justice for middle class America disappears. And that is exactly what groups like the Chamber and other so-called reformers want to do.

Corporate wrongdoing is rampant in America. Tort law and class actions are one of the few remaining incentives big corporations have to produce products that are safe and to behave like good corporate citizens. They now that law firms like MahanyLaw are standing watch and ready to protect consumers. We can do that because class actions give us the necessary economies of scale to take on giant companies.

Do we think the McDonalds cheeseburger lawsuit is frivolous? Absolutely! Let the court punish the lawyer that filed that suit and not simply use one frivolous claim to bar all class actions.

Is John Uuustal right in his theory? Are the lawyers who brought the McDonalds cheese lawsuit simply dumb or or were they bought? I don’t have the answers. But if John is correct, hopefully someone will step forward and expose the true wrongdoers and their motivations.

MahanyLaw is a full service national boutique law firm. We look for cases involving fraud against the government, bank fraud and class employment and consumer cases. For more information, contact us online or by email *protected email* All inquiries are protected by the attorney – client privilege.

We are also always looking for insiders. Even if you don’t qualify for a whistleblower reward, your information may be valuable to stope others from getting hurt or swindled. Since 2014 we have helped our clients collect over $100 million in cash awards. And we have also put an end to many frauds.

The post Who Took My Cheese? ($100,000 Reward Offer) appeared first on Mahany Law.

Special Master Overseeing $1 Billion Restitution Fund Issues Report

[Ed. Note: This post discusses the efforts of the criminal case against Takata to secure monies for victims of defective Takata airbags. Takata filed for bankruptcy protection and its airbag business was ultimately sold off. That is the source of the nearly $1 billion restitution fund. The actions of the receiver are separate from our and other class actions against the auto makers. Despite the Takata’s bankruptcy, car companies such as Volkswagen, Audi, Honda, Toyota and other remain responsible for knowing installing defective airbags into their vehicles.]

Last summer a federal judge in Michigan appointed Eric Green as special master in the Takata airbag case. Green is a Harvard Law School professor.

Of the billion realized from the sale of Takata’s airbag business, $125 million was placed in a Department of Justice “Takata Individual Restitution Fund” and an additional $140 million in the Takata Airbag Tort Compensation Fund.

As special master, Green’s job was “to determine eligible claimants and the amount of loss eligible for compensation, developing a formula or formulas, subject to Court approval, for

distributing funds to eligible claimants, making determinations regarding allowed claims, and making a recommendation to the Court regarding allocation of funds from [the restitution fund.]”

Although tens of millions of motorists were affected by the recalls of cars equipped with Takata airbags, not everyone is eligible to share in the restitution.

According to Green, claims will be considered for injuries caused by Takata’s air bag inflator defect. “Claims related to injuries or wrongful death caused by other air bag components — such as air bag failure to deploy, spontaneous air bag deployment, crash injuries unrelated to the inflator, or economic losses unrelated to physical injuries or death — are not covered by the three types of claims.”

Because we have spoken with hundreds of Takata victims, we understand that not every airbag injury is covered. The recall of Takata airbag equipped cars was specifically due to a defect in the airbag actuator. That is the device that causes the airbag to rapidly inflate in the microseconds after a crash.

As designed, a small charge should cause the airbag to rapidly inflate and prevent occupants of the car from striking the windshield. Unfortunately, Takata used a defective propellant that became unstable when subjected to high heat and humidity. Over time, the propellant could become unstable and cause the actuator to detonate with such force that it becomes a grenade.

Instead of saving lives, the airbag casing can explode sending deadly shrapnel throughout the interior of the car.

With millions of cars equipped with Takata airbags, there is certainly the occasion for some other failure of the airbags system. Often we have heard of crashes where the airbag did not deploy.

When an airbag doesn’t properly deploy, it could be the fault of the sensor, the actuator, the wiring between the two or the bag itself. None of these defects are part of the recall and are evidently not part of any settlement funds in the Takata bankruptcy and criminal cases.

Injured persons believing they are entitled to monies from the funds can apply directly on line to TakataSpecialMaster.com and TakataAirbagInjuryTrust.com. A lawyer is not necessary.

The big question is how much each claimant will receive. Some victims have suffered horrific injuries from the airbags. And regulators believe that several drivers and passengers died as the result of the shrapnel wounds they sustained.

Another big issue is how much money should be saved for future claims. There are still millions of Takata airbag equipped cars still on the road today. Many folks don’t even know their vehicle has been recalled while others are frustrated because the automakers still don’t have replacement parts.

What To Do If You Are Injured by a Defective Airbag

Unfortunately, folks continue to be harmed by exploding airbags. If you are the victim of a defective airbag we recommend these steps:

1. PRESERVE THE VEHICLE! It is almost impossible to prove an airbag defect was the cause of injuries unless we have the vehicle. Remember, defense lawyers will argue it was your fault as driver or some other driver’s fault. Not an airbag.
2. Call us right away. Although we are involved in several of the class actions against automakers, the class is geared to economic claims such as loss of use of the vehicle or lowered resale value. Class cases are geared for the millions of vehicle owners, not the unfortunate few who have been injured or lost a loved one.
3. Don’t sign any releases. We have no problems in claiming money from the fund but the deeper pockets in these cases is the automaker. Takata is bankrupt. There won’t be any more money coming into the compensation funds.

The strength of your claim against the automaker depends on the age of the vehicle. In the earliest years, the automakers may not have known that the airbags were defective. But there is no excuse for companies like Volkswagen still using Takata airbags in 2017!

The takeaway from this post is simple. There was approximately $265 million set aside from the sale of Takata’s airbags business. That money is earmarked primarily for injury and death victims. The Takata monies is being administered by Eric Green, the court appointed special master. Mr. Green’s efforts have nothing to do with the personal injury and wrongful death lawsuits against the automakers or others who may be responsible for the defective airbags.

Need more information? Call the Takata Airbag Injury team at MahanyLaw today. We can be reached online, by email *protected email* or by phone 414-704-6731. All inquiries are protected by the attorney – client privilege and kept strictly confidential. Injury cases are handled on a contingent fee basis meaning no fees or costs unless we are able to recover money on your behalf.

We also urge everyone to visit our Takata Personal Injury and Wrongful Death Claim Center page.

The post Takata Court Restitution Fund Update appeared first on Mahany Law.

$1.6 Million Award for Information! Seeking Whistleblower with Inside Information about Price Manipulation of Fannie Mae and Freddie Mac Unsecured Bonds

The U.S. Department of Justice has opened a criminal investigation into price manipulation of Fannie Mae and Freddie Mac unsecured bonds. Media sources claim that several people have confirmed that prosecutors are looking at several bank trading desks. They believe traders may have colluded to manipulate bond prices. When that happens, the banks benefit while investors are hurt. Many of those investors are employee pension plans.

The Federal National Mortgage Association (“Fannie Mae) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) are two government sponsored enterprises that function like private corporations. They also have authority to issue their own bonds which investors can purchase and hold.

Fannie Mae and Freddie Mac were created to facilitate home ownership. They do that by insuring residential mortgages. Those mortgages are packaged into securities. Most of debt instruments issued by Fannie Mae and Freddie Mac are mortgage pools.

The two companies also issue their own debt called “agencies.”  These bonds are unsecured and are subject of the government’s investigation. Presently there is $548 million of these unsecured bonds outstanding.

The Justice Department is investigating whether traders at some of the large money center banks are working together to fix or manipulate bond prices. Unfortunately, America’s “too big to fail” banks are no strangers to price fixing. In recent years, several large US banks including Bank of America and Citi were implicated in the Libor fixing scandal.

Short for the London Interbank Offered Rate, “Libor” is used to set interest rates in trillions of dollars of loans. Since mortgages, student loans, financial derivatives, and commercial loans often rely on Libor as a reference rate, the manipulation of those rates can significantly hurt consumers, businesses and financial markets worldwide.

Rolling Stone called the Libor scandal “the biggest price fixing scandal ever.” And now it appears that the banks may still be at it.

Why? Because they can and because they make millions doing so.

Instead of competing, banks have figured out they can make more money by colluding.

During the Libor scandal, traders were caught communicating by instant messages. Obviously they never thought they would be caught since their behavior was stunning in its arrogance.

One message said, “It’s just amazing how Libor fixing can make you that much money.” Another admitted, “Pure manipulation going on.”

The big banks ultimately paid some hefty fines but as we have long said, those fines are simply a price of doing business.  UBS paid $1.5 billion in penalties, Barclays paid $450 million and Royal Bank of Scotland paid $615 million.

The class action lawsuits by those affected by the Libor manipulation continue. And now Fannie Mae and Freddie Mac agencies manipulation may be next.

On the heels of the Libor scandal came the FOREX manipulation scandal. Short for the foreign exchange market, some $5.3 trillion is traded daily through forex.

In that scandal some of the same suspects were the targets of government investigations worldwide. Big household name banks such as Barclays, HSBC, and Goldman Sachs, Citigroup, JPMorgan Chase, Royal Bank of Scotland (RBS) Standard Chartered, Deutsche Bank, HSBC, UBS and Bank of England.

Once again, the traders were colluding through instant messaging and private chat rooms. Chat rooms with names like “The Cartel”, “The Bandits’ Club”, “One Team, One Dream” and “The Mafia.”

As a result of that investigation, several banks once again paid huge fines. On May 20, 2015 four of the banks, including Barclays, Citigroup, JP Morgan, and Royal Bank of Scotland pleaded guilty to manipulation of the foreign markets and paid $5.7 billion in fines. UBS pleaded guilty to wire fraud and agreed to a $203 million fine. Bank of America, while not convicted of crime, agreed to pay a $204 million fine for unsafe practices in foreign markets.

After each of these price fixing and manipulation settlements each of the involved banks agreed to police themselves and self report any violations. In our humble opinion, that is the equivalent of opening the doors to our prisons and simply asking the prisoners to stop committing crimes.

No one is saying who is being investigated today for the Fannie Mae and Freddie Mac unsecured bond price manipulation (price fixing) but we suspect it will be the same suspects… Bank of America, Citi, Deutche and maybe Wells Fargo and JP Morgan Chase.

FIRREA Bank Whistleblower Rewards

We are looking for traders and insiders with knowledge of these scams to step forward. A 1989 law allows the Justice Department to pay rewards of up to $1.6 million for inside information about misconduct involving US banks or banks whose accounts are insured by the FDIC. NCUA backed credit unions also qualify but we suspect that none are large enough to be able to manipulate Fannie Mae and Freddie Mac bond prices.

Called the Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA), this law can pay up to $1.6 million rewards to insiders. There is no need to be a US citizen or resident either.

An added benefit to FIRREA is the possible abilityto remain anonymous. (Each case is unique, but we determine your ability to remain anonymous before filing anything on your behalf.)

We are looking for insider information in order to stop these illegal practices. Our goal is also to help secure our whistleblowing clients the largest cash rewards possible. Your information may also be useful in class actions against the banks. Just like the previous FOREX and Libor manipulation scandals, manipulating Freddie Mac’s and Fannie Mae’s unsecured bond prices hurts investors and destroys the public’s faith in our capital markets.

About Mahany Law. We are a national boutique law firm that represents whistleblowers, protects consumers and fights fraud. We helped secure the largest recovery against a single defendant in U.S. history, the 2014 victory against Bank of America that recovered $16.67 billion.

To learn more, visit our FIRREA whistleblower page. Want to see if you qualify for an award or help in our fraud investigation? Contact us online, by email *protected email* or by phone 414-704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept strictly confidential.

The post Fannie Mae, Freddie Mac Price Manipulation Investigation appeared first on Mahany Law.

$24 Million Dollar Refrigerators…Seeking Defense Spending Whistleblowers

It wasn’t too many years ago we were reading about defense contractors charging $900 for a hammer and $2000 for a toilet seat. While government contractors are notorious for ripping off taxpayers, we may have just witnessed a new low.  The Air Force just announced that it was cancelling a contract with Boeing for new refrigerators on Air Force One.

The bill for these new units? $24 million but wait, that’s only for two. Air Force One is apparently equipped with five of the little refrigerators.

Sole source contracts have always been a vehicle for fraud. When government doesn’t bid a project and simply awards a contract to a vendor, there is always the risk that the contract will be seriously overpriced. Without competitive bids, there is no incentive to keep prices reasonable.

Boeing was the lucky vendor who was awarded the contract. But after the terms of the contract leaked out and Congress began asking questions, the contract was cancelled by the Air Force and White House Military Office.

Unfortunately, simply because a contractor overcharges doesn’t make the contract illegal. Ridiculous prices if not justified may violate the Truth in Negotiation Act, however.

We have seen many illegal behaviors in the defense industry and Boeing is not immune from getting caught in some of those schemes.

Whistleblower Awards – Defense Contractor Fraud

A Civil War era law allows private individuals with inside information about fraud to claim large cash awards. If you have information about fraud involving government contracts, you may be eligible for awards of 10% to 30% of whatever we or the government collects from the wrongdoers.

Typical defense schemes include:

• Billing for parts or services never provided or delivered
• Falsification of invoices
• Providing substandard, defective or recycled parts or goods
• On “cost plus” contracts, billing for too many hours or shifting fixed price work to cost plus contracts (“cross charging”)
• Relabeling foreign made goods as “Made in the USA”
• Bid rigging
• Failing to comply with Truth in Negotiations Act (TINA) requirements

Fraud on our military is unconscionable. Often these schemes endanger our fighting men and women. Recent cases have involved armored personnel carriers that won’t stop bullets, defective flak jackets and body armor, gun sights that are inaccurate and using recycled parts in air force jets when new parts are required for safety reasons.

Taxpayers will spend $700 billion this year on defense. With that much money, the temptation is just too much for some contractors. In our opinion, that includes Boeing and their $23.8 billion contract for two small refrigerators.

When the military gets ripped off, so do taxpayers. The False Claims Act allows us to help level the playing field, stop corporate greed and cooperation and earn our clients large cash awards.

Special Note on Middle Eastern Defense Contractor Fraud

Since 9/11, Americans have spent about $7 trillion dollars to fight the war on terror. That money has gone to our military and to defend our borders. Leaving aside proposals for a new border wall, we spend billions domestically and beefing up our allies in the Middle East. Iraq, Israel, Afghanistan…

It’s hard enough to fight defense contractor fraud in the United States. Add a war zone into the mix and it becomes even more difficult. We have spoken with embassy personnel in Afghanistan and Pakistan and with the inspector general’s office for the Afghanistan Reconstruction. There is fraud everywhere. Even in the contracts for drinking water for our military.

A 2013 report suggested that we have lost $60 billion to waste and fraud in Iraq. That figure is over $100 billion in Afghanistan. And remember, these were 2013 figures!

With almost 2 million open contracts, the Department of Defense can’t police everyone. And policing contractors in war zones is even more difficult.

Last summer while attending a conference I met with the Special Inspector General of the Afghanistan Reconstruction, John Sopko. He is a civilian in his 60’s. With just 197 employees – most in the United States – he is responsible for policing billions of dollars in US spending in Afghanistan.

After speaking with him, I began to understand just how difficult the problems are in policing contracts and contractors. If one of his auditors wants to inspect a facility, they can’t just hop in a car and drive over for a surprise inspection. Instead, they have to coordinate with the military, make advance preparations, arrange for helicopter gunship escorts and hop in an armored personnel carrier and even then, they can’t stay long.

Try being an auditor in 115 degree heat wearing heavy body armor and not speaking the local language. And don’t forget, while always waiting for someone to shoot at you.

Contractors, Military – the Eyes and Ears of Uncle Sam

The best folks at identifying fraud are those on the inside. It could be a soldier, foreign worker or employee of a defense contractor. And all are eligible for awards.

Congress passed the False Claims Act during the Civil War. It was passed when defense contractors were ripping off the Union Army. Back then it was lame mules. Gunpowder laced with sawdust and uniforms filled with moth holes.

Over 150 years later the law is still on the books. Why? Because it is effective at routing out fraud. Congress knew that the best way to fight fraud was to pay whistleblowers an incentive for stepping forward.

Whether you are an American or Iraqi national, it doesn’t matter. What does matter is that you have inside information about fraud involving tax dollars or government contracting programs.

Can military and government officials qualify? Maybe. We can help you figure that out. The short (and oversimplified) answer is that if your job is ferreting out fraud, don’t expect to get an award for doing your job.

What Happened with the $24 Million Air Force One Refrigerator?

We couldn’t end this post without a bit of laughter. We are not big fans of the military industrial complex that pumps millions of dollars in campaign coffers.

One of the ways they get away with their fraudulent scheme is by developing their own lingo. The mini fridges on Air Force One? They aren’t refrigerators. The public would get incensed if they knew Boeing was charging taxpayers $24 million for mini fridges. (Igloo has a pretty nice one on sale at Walmart for $105.00.)

Instead of calling them a refrigerator, we call them a custom “cold chiller units” for a VC-25 aircraft. Suddenly we are fooled and think that this is some necessary part to keep our military planes in the air!

And what does the Airforce say about the broken presidential refrigerators? They are exploring “mitigation options… to ensure food security.” In other words, they plan to just call the refrigerator repairman and fix them.

And we wonder why taxes are so high!

How to Claim Your Defense Contractor Whistleblower Reward

The False Claims Act has a very strict protocol that must be filed to obtain a reward. Simply calling a government toll free hotline is not enough. You must actually file a lawsuit under seal in federal court. Unfortunately, that scares away hundreds of people – and it shouldn’t.

Because you are prosecuting a case in the government’s name, you must have a lawyer.

Many lawyers see big dollar signs when they hear that you have a potential False Claims Act case against a defense contractor. They file the case hoping that the Justice Department will swoop in, do all the work and mail a big check. That happens in a small percentage of the cases.

Hiring a lawyer means finding one that handles False Claims Act cases for a living. And a law firm that has the experience to take on huge, powerful corporations when the government doesn’t intervene. It also means finding a law firm that understands how to investigate and with experience in whistleblower anti-retaliation laws.

And it means being quick when time counts. Generally only the first person to file gets the award.

The whistleblower lawyers at Mahany Law have years of experience that we are ready to put to work for you. For more information, contact us online, by email *protected email* or phone at 414-704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept completely confidential. You can also visit our defense contractor fraud page for general information about defense contracting fraud and whistleblower awards.

MahanyLaw – Dedicated to Defending Our Defense Contractor Whistleblowers and Freedom Fighters

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Feds Want Answers Why Automakers Stalling with Replacement Airbags

The National Highway Transportation Safety Administration (NHTSA) is asking tough questions of automakers and why they are dragging their feet in replacing dangerous Takata airbags. It’s about time. How many more motorists must die or suffer horrific injuries before the big automakers replace defective airbags?

The government originally gave car makers until December of last year to replace defective airbags. We were astonished last year that some companies like Volkswagen were still installing defective Takata airbags. Even with a looming deadline to take out and replace Takata airbags, a few automakers were still putting them in new cars.

We believe that the car companies have known about the defective airbags for years. That is why we brought so many class action complaints against automakers. Takata is broke and out of business but the automakers are still responsible for defective parts used in the manufacture of their automobiles. They have an obligation to replace them at their cost.

There are now about 37 million cars in the United States subject to the recall. Although it takes time to replace that many airbags, we have little sympathy for the automakers. Some of them have known for many years that the airbags they were putting into their cars were defective yet they continued using them in the hopes of saving a few bucks.

Now with dozens of deaths and catastrophic injuries, we are learning just how defective those airbags are. They are not only defective, they are dangerous and deadly.

Since 2015, the NHTSA has been telling car companies to quickly replace the bad airbags. Each day that goes by, tens of millions of motorists take their lives into their own hands when they start their car and drive down the highway. (We have spoken with hundreds of owners of Takata airbag equipped vehicles – many of those drivers won’t drive them meaning they are paying for a car that sits in a garage.)

According to the NHTSA, none of the twelve automakers affected by the Takata airbag recall met the December 2017 deadlines to replace the dangerous airbags.

According to a letter sent by NHTSA Deputy Administrator Heidi King to the automakers last month, “The National Highway Traffic Safety Administration’s number one priority is public safety, and the agency is concerned that certain higher risk vehicles with defective Takata air bags remain unrepaired.”

The response from the car companies? We imagine it will likely be more whining or near deafening silence.

Are You at Risk from a Defective Takata Airbag?

The cars most at risk are those that were driven or presently are driven in high heat, high humidity environments. Heat and humidity causes the ammonium nitrate propellant used to inflate the airbags to degrade. When that happens, the airbag can deploy with such explosive force that components in the airbag actuator and steering column can become razor sharp shrapnel.

It’s not just the driver’s side airbags. Some front passenger airbags are also equipped with defective Takata airbag actuators.

NHTSA says cars in the following states are most at risk: Alabama, California, Florida, Georgia, Hawaii, Louisiana, Mississippi, South Carolina, Texas, Puerto Rico, American Samoa, Guam, and the U.S. Virgin Islands. The agency says that approximately 7 million vehicles in high risk areas have yet to have their airbags replaced.

A complete list of cars subject to the recall can be found on our Takata Airbag Claim Center page. That page also has extensive information on the recall and what to do if you own one of the recalled vehicles.

Injured by an Exploding Airbag?

Despite the automakers knowing about these dangerous airbags for years, innocent motorists continue to get hurt. With summer heat and humidity here, it is only a matter of time before someone else gets killed.

Just two weeks ago we were contacted by a gentleman that was hurt when his airbag exploded. He is lucky to be alive but is today facing extensive surgery. His doctors tell him that he has permanent nerve damage and paralysis.

Had the car companies not been so greedy, this gentleman would not be facing a life of pain and uncertainty. (The car companies liked Takata airbags because they were cheaper than the alternatives.)

Had the car companies listened to the NHTSA back in 2015, once again, this gentleman would not be spending his days with lawyers, surgeons and therapists.

If you were hurt by an exploding airbag, make sure you save the car! Even if it is totaled, have the car towed to a safe location. Without the airbag system, it is hard to prove that the Takata airbag actuator was the cause of the injuries.

Next, make sure you call us right away. Whether or not the accident was your fault or someone else’s, no one should have their face torn apart by shrapnel from a defective airbag. There is an enormous amount of work to be done, however, in an airbag case and it is important to preserve evidence immediately. The quicker we can get to work, the better your chances of financial recovery.

If Takata Made the Defective Airbag, Why Sue the Automakers?

Takata’s bankruptcy filing listed over a billion dollars  owed various creditors. What they actually owe is probably $5 billion or more. Those creditors include very person injured by an airbag, every dealer that gives out a loaner car to someone waiting for parts, an $825 million fine owed the feds and every automaker that is forced to find and fund replacement airbags. Recalling 37 million cars is no cheap undertaking.

With so many claims, Takata simply filed bankruptcy last year. Their business and assets have been sold. And just $265 million is available to pay claims. The fact that Takata has very little money left to pay claims is one reason to look to the automakers.

Another reason is that the automakers are responsible for the parts they put in their cars. And most automakers knew or suspected for years that the ammonium nitrate airbag propellant used by Takata was dangerous, yet they continued installing Takata airbags in their vehicles. They are every bit as responsible as Takata and unlike Takata, the auto companies have the money to pay claims.

If you were injured by a defective airbag, contact us immediately online, by email at *protected email* or by phone at 414-704-6731 (direct). It doesn’t matter if the airbag exploded or didn’t deploy or even if the airbag wasn’t made by Takata or subject to the recall… we can help. Want to learn more about exploding Takata airbags? Visit our Takata airbag injury claim center.

The post Takata Airbag Recall Update – Do More People Have to Die? appeared first on Mahany Law.

Many years ago, I worked as a sheriff’s deputy and K9 handler in the north Maine woods. If you were severely injured, the nearest level one trauma center was hours away. For a logger severely injured in the backwoods, a lobsterman living on one of Maine’s hundreds of islands or a motorist badly hurt in a crash hours from Portland, Bangor or Lewiston, helicopter EMS (air ambulance) makes sense. In Maine, that service is provided by LifeFlight of Maine, a not for profit company.

I have been on a LifeFlight chopper and fully appreciate that the medical crews manning those airframes are heroes.

I begin this post praising the crews of Helicopter Emergency Medical Services (HEMS) because my beef is not with them. In the many years since I served in uniform, HEMS has exploded. In many areas of the country it is now a for-profit service or is operated by hospitals that treat it like a profit center.

At the heart of the HEMS debate is utilization. When is it appropriate to call for a helicopter? If you are on an island in Maine where it might take hours to get a boat to take someone to a hospital, it is a lifesaver and medically necessary.

Fast forward to 2012 when I was parked on I-94 20 miles from Milwaukee. I was “parked” because troopers shut down the interstate after a horrific collision. A chopper was called in to take one of the victims 17 miles to the trauma center. Would it have been faster to take an ambulance? Probably much faster.

EMS World reports a 2002 study in the Silicon Valley area of California. A review of 947 helicopter EMS flights found that very few patients benefitted from having a helicopter instead of an ambulance. In fact, over one third of the patients were treated and released by the emergency room and never even admitted!

That study was in 2002. We think the situation is actually worse today!

The University of Texas hospital in Galveston elected to terminate their air EMS service. Many were fearful that transport times would increase or more lives would be lost. Those fears were thankfully never realized. There was no increase in transport times or increase in mortality rates.

Since the 2002 study, the U.S. air ambulance fleet has doubled in size. There are now 1,515 helicopters making 300,000 flights per year. Worse, many of those new helicopters are owned by for profit companies. Bloomberg reports that several of those for-profits are owned by private equity firms.

Is that illegal? No, but it certainly raises red flags. Private equity and hedge fund managers are looking for quick and huge profits. And in our experience, we often see fraud, false billing and overutilization occur when private equity gets involved in healthcare.

Although the number of helicopters has doubled, the number of medevac flights per helicopter has decreased. That means the cost of each ride is going up.

How much? Bloomberg says the average charge for a patient transport is approximately $50,000! Ten years ago, it was $13,000.

Unfortunately for consumers, health insurance won’t cover these costs. In fact, Medicare pays just $6,893. Medicaid pays even less, $4,240.

Who pays the difference? Patients. Unless, of course, the bills are so overwhelming that they are forced into bankruptcy.

Despite the huge disparities between the air EMS bill and what insurance pays, these private companies are still making a profit.

We understand that even some of the non-profits are getting so squeezed that they too are participating in questionable conduct. One EMT tells us that the hospitals don’t mind losing a little bit of money on a helicopter run, especially if the patient has private insurance.

Why? Because a seriously injured patient can bring in tens of thousands of dollars in subsequent medical billings by the hospital.

States can regulate conventional ambulance bills but are powerless to force helicopter EMS companies to control costs. That’s because air ambulance companies are exempt from state rate setting. Through a quirk in the law they are considered to be an air carrier just like an airline. And that means their rates are beyond the reach of the state EMS regulators.

Kickback Investigation – Air Ambulance / HEMS

And that brings us to our investigation. We are currently investigating whether any of the air ambulance companies or hospitals that operate a helicopter EMS service are paying illegal kickbacks.

The federal Anti Kickback Statute makes it illegal for a healthcare company to give anything of value in exchange for obtaining patients. The kickback doesn’t have to be in cash, either.

A hospital that gives free medical supplies, for example, in return for first responders calling for a helicopter transport would be one form of a kickback.

Kickbacks are illegal because Congress believes that medical decisions should be based on the best interests of the patient. Not on who pays the most.

In 2003, CMS issued an advisory opinion that said in very special circumstances, a hospital could provide a landing pad and crew quarters at no cost to a for profit helicopter EMS service. In issuing the opinion, the agency found that the state had a statewide mandated trauma care plan that would prevent the arrangement from steering patients to the hospital.

On paper that sounds great. We are aware of a recent case in Chicago, however, where EMTs were being given cash to say a patient requested transport to a specific hospital. That lead to critical care patients driven miles away to the hospital paying the kickback even though there were closer trauma care facilities.

We are aware of no case yet where a helicopter EMS service has been prosecuted for kickback but there was a related case in Georgia.

In Hospital Authority of Gwinnett County v. Jones, a Georgia state court jury found that the transport of a patient who had sustained serious burn injuries was dictated by “consideration of potential economic gains for the receiving hospital”. In other words, kickbacks. The jury awarded the plaintiff $1.3 million against the hospital and $5,000 against the ambulance service.

In that case, a trauma center with a dedicated burn unit was located approximately 15 to 20 minutes away by helicopter. But the defendant hospital was closer by ground. Even though there was an air ambulance already en route, the patient was first transported by ambulance to the other hospital only to be sent on anyway to the trauma center. The jury was evidently furious that the decision to bring the patient to the first hospital was motivated by money instead of the best interests of the patient.

We believe that the influx of hedge fund and private equity money into the helicopter EMS world will or has caused some folks to pay bribes or kickbacks. We have seen it over and over in the ground EMS industry.

False Claims Act – Whistleblower Awards and Helicopter EMS

We already discussed why kickbacks are bad. It hurts taxpayers and can endanger patients.

Congress knew that many folks might be reluctant in reporting these illegal kickback schemes. That is why they passed the False Claims Act.

Under the Act, the Justice Department and courts can issue monetary rewards for people who step forward with information about Medicare fraud, Medicaid fraud and kickback / patient referral schemes.

Under the law, awards of 15% to 30% of whatever is collected from the wrongdoers is given to whistleblowers. But you must have inside information about the scheme and generally be the first person to step forward.

Congress also knew that retaliation might sometimes be a problem. Under the Act it is illegal for an employer to fire or demote whistleblowers. The law has some real teeth, too.

Employees who are the victims of illegal whistleblower retaliation can collect damages, double lost pay, lost future pay and even attorneys’ fees.

To see if you may qualify, visit our kickback whistleblower information page. Have questions or think you qualify? Contact us online by email *protected email* or by phone at 414-704-6731. All inquiries are protected by the attorney – client privilege and kept strictly confidential.

List of Air Ambulance – Helicopter EMS Providers in the United States

• AC Global Medical Transports (fixed wing) San Diego
• Acadian Ambulance & Air Med Services- Louisiana and Mississippi

• Air Care – University of Cincinnati Medical Center – Ohio, Indiana, Kentucky
• AirCare – University of Mississippi Medical Center, Mississippi. CAMTS certified with bases in Jackson, Meridian, Columbus, and Greenwood. Covers the entire state and transports all age groups. AirCare flight teams consist of a MS-CCP and a Flight Nurse.
• AirCare – CHI Health Good Samaritan – Nebraska
• Air Evac – (fixed wing) Arizona, United States, Canada, and Mexico.
• Air Evac Lifeteam –  Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kentucky, Mississippi, Missouri, Ohio, Oklahoma, Tennessee, Texas and West Virginia.
• AirLife Denver – Denver, Colorado
• AirLife Georgia (Air Methods Corporation) for profit – serving Georgia, Florida Tennessee, Alabama and South Carolina.
• AirLink Critical Care Transport – Oregon.
• AirMed International – (fixed wing) Alabama
• Air Methods – large US for profit
• Alia MedFlight – (fixed wing)
• AMR Air Ambulance (fixed wing) National for profit
• Angel MedFlight – No details available.
• Angel One – Arkansas Children’s Hospital, (formerly known as Arkansas Newborn Transport Service ANTS) (Arkansas)
• ARCH Air Medical Service – Missouri, Illinois
• Boston MedFlight – Bedford, Massachusetts
• Calstar (California Shock Trauma Air Rescue) nonprofit serving California and northern Nevada.
• CareFlite (Baylor Scott & White Hospitals, Parkland Hospital, THR hospitals, JPS Hospital, and Methodist Hospitals) – Texas.
• CareFlight – Ohio
• Critical Air Medicine –  San Diego, California
• Critical Care Medflight (fixed wing) – Georgia and Florida.
• DHART – Dartmouth-Hitchcock Advanced Response Team (New Hampshire and Maine)
• EagleMed – Based out of Wichita, Kansas and has multiple operations located in the midwest.
• EastCare – University Health Systems of Eastern Carolina – North Carolina
• Enloe FlightCare –  Enloe Medical Center – California.
• Flight for Life (fixed wing and helicopter) – Colorado
• Guardian Flight – Alaska, Utah and Wyoming
• HALO-Flight – non profit serving South Texas
• Hospital Wing-Memphis Medical Center Air Ambulance Service –  not for profit serving Tennessee, Mississippi and Arkansas
• Life Flight – Memorial Hermann Hospital- Texas Medical Center – Houston, Texas.
• LifeFlight of Maine (non profit) – Maine & New Hampshire
• LifeFlight – University of Massachusetts – Massachusetts.
• LifeFlight Eagle – Kansas City, Missouri
• Life Flight Network – Largest non-profit air ambulance in the US – Oregon, Washington, Idaho, and Montana.
• LifeForce – Erlanger Health System – Tennessee, Georgia and North Carolina
• Lifeguard Aeromed  (fixed-wing) Fort Worth, Texas serving the United States, Mexico, and Canada.
• LifeLine – Indiana
• Life Link III – Minnesota and Wisconsin.
• LifeLion Critical Care – Penn State Hershey Medical Center – serving Central Pennsylvania
• LifeNet, Inc. – Texarkana, Texas and Arkansas
• LifeNet for profit owned by Air Methods. Serves Kansas, Missouri, Iowa and Nebraska, South Dakota and Minnesota.
• Life Star – Based out of Hartford (CT) Hospital.
• Life Star of Kansas – Topeka, Kansas
• LifeTeam – (fixed wing and helicopter) – Kansas, Nebraska, Texas, Nevada, and Hawaii.

• Maryland State Police Aviation Command – State owned

• MedAir – – Midwest Medical Transport company – Nebraska and Iowa.
• Medflight – Columbus, Ohio.
• Medway Air Ambulance (fixed wing) national coverage
• Mercy Flight Central – Non-profit – central New York
• Mercy Flight – Western – Non-profit – western New York
• Mercy Flights -Oregon and northern California.
• Metro Life Flight – operated by MetroHealth – Ohio.
• Omniflight Charleston – South Carolina and Georgia.
• PennSTAR Flight – Eastern Pennsylvania and parts of New Jersey.
• REVA, Inc. – (fixed wing) national coverage.
• ShandsCair Critical Care Transport Program –  UF Health Shands Hospital (fixed wing and helicopter) – serves central and north Florida.
• SkyHealth – Air ambulance service of Yale New Haven Health in Connecticut.
• STAT Medevac – based in Pittsburgh, Pennsylvania
• Texas LifeStar in Central Texas.
• Trauma Hawk Aero-Medical Program – Palm Beach County, Florida – taxpayer funded.
• Trauma Star Air Ambulance – Key West, Florida (public funded)
• TraumaOne Flight Services –  UF Health Jacksonville Trauma Center – serves Florida and Georgia
• Travis County STAR Flight – Austin, Texas –
• Trinity Air Ambulance International, LLC – (fixed wing) Worldwide service.
• UCAN, University of Chicago Aeromedical Network – Illinois
• US Air Ambulance – (fixed wing) Worldwide service.

Photo in post from US Coast Guard blog

The post Air Ambulance Kickback Investigation appeared first on Mahany Law.

Updated June 2018. Healthcare fraud is a spectator sport in south Florida. We literally can’t keep up with the number of indictments, convictions and False Claims Act whistleblower cases involving healthcare in Dade and Broward Counties, Florida. Nothing surprises us anymore. But as jaded as we have become, the allegations swirling against Broward Health CEO Beverly Capasso caused our jaws to drop.

Broward Health is a publicly funded and operated hospital system serving the greater Ft. Lauderdale area. With 1529 beds and 1800 physicians, it is one of the ten largest public healthcare systems in the nation. We think it is also one of the most corrupt. We understand (but don’t condone) why for profit hospitals often go astray but there are simply no excuses for hospitals owned by taxpayers.

Until recently, Broward Health was known as the North Broward Hospital District. After a series of fraud related scandals, the system changed names. A simple name change didn’t do much for the culture of fraud, greed and corruption within the hospital’s top management, however.

2015 Prosecution of Broward Health for Illegal Kickbacks

Less than 2 years ago, Broward Health (then North Broward Hospital District) agreed to pay the Justice Department $69.5 million to settle charges that the hospital was paying kickbacks to doctors. The more patients referred to North Broward, the more referring physicians could expect in kickbacks.

The federal Anti-Kickback Statute makes it a crime to pay, offer to pay or receive anything of value in return for patient referrals. Congress believes that patient care decisions should be based on the best interests of the patient and medical necessity. Never should those decisions be based on who pays the most in kickbacks or bribes.

In announcing the prosecution of Broward Health, the Justice Department’s chief civil prosecutor said, “The Department of Justice has long-standing concerns about improper financial relationships between health care providers and their referral sources, because those relationships can alter a physician’s judgment about the patient’s true health care needs and drive up health care costs for everybody. In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable.”

Deter similar conduct? Keep reading, old habits die hard!

Violations of the Anti-Kickback Statute and the related Stark Act are also violations of the False Claims Act, a Civil War era whistleblower law that allows whistleblowers with inside information about publically funded healthcare fraud to earn large cash awards for their information.

North Broward Hospital Whistleblower Receives $12,045,655.51

The 2015 case against Broward Health was filed by a concerned physician, Dr. Michael Reilly. For coming forward and reporting the fraud, Reilly received over $12 million in award monies.

Reilly came forward after seeing that certain physicians who referred certain types of profitable patients to the hospital were also paid more.

Broward Health Problems Continue

Six months after Broward Health settled with the Justice Department, the State of Florida demanded the healthcare system turn over $5.3 million to settle related Medicaid fraud charges. That settlement was in March of 2016. Despite being a public agency, Broward Health wouldn’t discuss the settlement with the press.

In March of 2016, Broward Health’s CEO, Nabil El Sanadi, MD, was found dead from a self-inflicted gunshot wound. Media reports say that a private investigator had come forward and claimed that Dr. Sanadi had hired him to examine improprieties at the hospital.

Since the death of Dr. Sanadi last year, there have been at least two interim CEOs. Both left after a short period.

Broward Health’s Newest Scandal – CEO Beverly Capasso

The newest CEO was appointed in May of this year. Beverly Capasso had served on the Board of Directors of the hospital. She had just been appointed to the board by Florida Governor Rick Scott and was soon appointed as the newest interim CEO.

In a job that pays up to $955,000 per year, Capasso’s appointment was quite an accomplishment. Maybe too much of an accomplishment.

At the time of her appointment, the Florida Sun Sentinel questioned why Capasso was never fully vetted for the job. “Board members engaged in virtually no questioning of her background, her work experience or her likely approach to the job. No one asked whether anyone at Broward Health had talked with her previous health care industry employers about the quality of her work.”

The paper had good reason to be suspicious.

Capasso was apparently friends with Lynn Barrett, the general counsel of Broward Health. It is unknown if that connection helped her land her appointment by Governor Scott to the board of directors or her subsequent appointment as interim CEO. When questioned about the friendship, Barrett said, “I have a constitutional right not to answer.”

That’s not the kind of answer one would expect from a friend. And not the answer the public deserves.

Just eight weeks later, the New York Post and the Sun Sentinel today report that Capasso received her masters degree from an unaccredited and now defunct university identified by the feds as a diploma mill.

Does the hospital care? Apparently not. The board’s HR representative told reporters that her capabilities were more important than “a piece of paper”.

We disagree. A phony or worthless degree is evidence of extreme dishonesty. The board shouldn’t trust someone that clearly lacks the credentials to run one of the largest healthcare systems in the nation. And anyone that lies or misleads the public isn’t fit for any public position, especially CEO.

When we hear a story like this, it puts the 2015 and 2016 fraud settlements into context. Broward Health is diseased. It may have great physicians, nurses and other professionals but its management is corrupt. That’s our opinion, of course, but the facts don’t lead to any other conclusion.

June 2018 Update:

Broward Health Indictments – The Drama Doesn’t End

Do you know that popular saying, “Just when you think it can’t get any worse?” Well at Broward Health things do get worse.

Since our last post, Hospital CEO Beverly Capasso was indicted for her activities at the hospital. An appointee of Governor Rick Scott, we were waiting to see if she stepped down. She didn’t.

The board, now down several members, looked at hiring a new CEO. Instead they gave a vote of confidence to Capasso. According to the Sun Sentinel, her indictment was not even discussed at the meeting. Phony degree, pending indictment and apparently unqualified didn’t deter the board. Her appointment was confirmed just days ago by a 4 to 1 vote.

Former board member Joseph Cobo said, “I have never, ever, in the 40 years I’ve been around this place, seen a staff more scared from the retaliation that has been occurring. You need a change. Yes, there are some very good people in this organization. But a lot of people have been hurt.”

Since we last wrote, Capasso wasn’t the only Broward Health insider indicted. Earlier in this post we described how board attorney Lisa Barrett invoked her 5th Amendment rights against incrimination when asked a question about her friendship with Capasso. She apparently had good reason to not answer questions as she was also indicted.

In addition to Capasso and Barrett, criminal charges are also pending against two of the board members and a former board member.

Barrett may have other problems as well. Allegedly an investigator hired to ferret out corruption within the hospital district accused her of obstructing an FBI investigation into the hospital by not turning over evidence.

So what happens now? Capasso’s $650,000 salary is likely to increase to as high as $1,125,000.00. It’s hard to calculate her salary as the hospital district, which receives tens of millions of tax dollars, told the Florida Bulldog, a public watchdog media outlet, that it was not obligated to respond to their public records request.

Seeking Broward Health Whistleblowers

Unfortunately, struggling taxpayers shouldn’t have to worry about indicted public officials getting bonuses. Why would we even pay an indicted public official with a phony degree three quarters of a million dollars per year. Capasso makes more in one day than most Broward County residents make in a month. The patients, taxpayers and employees of Broward Health deserve better. And fortunately, you may be able to make a difference.

We have extensive experience with healthcare fraud. Our whistleblower clients have received over $100 million in awards over the last several years. In our experience, the kickbacks and illegal referral arrangements are indicative of a much larger fraud. And it doesn’t appear that the current board is capable of cleaning house. At this point, they appear to be the center of the problem.

If you have evidence of fraud at Broward Health, give us a call. All inquiries are protected by the attorney – client privilege and kept confidential. Working with our local Florida partners, we stand ready to prosecute Broward Health and stop the fraud. We can also help protect you against illegal retaliation.

Dr. Reilly was brave to stand up against the North Broward Hospital District. He received over $12 million for his efforts. Let’s continue his efforts and finish cleaning the mess. It isn’t a question of when the mess will get cleaned up, just who will be next to collect an award. (The awards are generally only available to the first to file.) If you have information about current Medicare or Medicaid fraud at Broward Health, call us today.

For more information, contact attorney Brian Mahany at *protected email* or by phone at (414) 704-6731 (direct). Please also visit our healthcare fraud information pages

MahanyLaw – America’s Medicare Fraud Lawyers

WPLG Video Coverage of Broward Health Corruption Allegations

The post And Then There is Broward Health… Medicare Fraud Post appeared first on Mahany Law.

TBM Consulting Workers Sue Lubbock National Bank for ERISA Fraud

TBM Consulting bills itself as experts in supply chain technology. Based in Morrisville, North Carolina, the company was founded in 1991. In 2003, the company created an Employee Stock Ownership Plan or “ESOP.” These plans are regulated like pensions and are subject to ERISA, the Employee Retirement Income Security Act of 1974.
ERISA is a powerful law designed to protect employees and pension plan recipients. Two of its provisions prevent certain insider transactions and acts that are imprudent or “disloyal” to plan participants.

If structured properly, an ESOP can be a win-win for both the company and its employees. Workers gain ownership in the company. In return, those workers are generally more productive and vested in the success of the company since they are considered owners.

There are also valuable tax breaks associated with ESOP plans.

In 2011, just 4 years into the ESOP plan, TBM Consulting’s president and CEO, Anand Sharma, decided to sell most of his 78 million shares of the company. Because there was no ready market for these shares, Sharma thought the ESOP would be the ideal buyer.

While not technically illegal, such insider transactions are fraught with peril.

Just before the sale was to take place, Sharma allegedly convinced the company’s board to name Lubbock Bank as the ESOP’s trustee. Under federal law, that means that no matter what the relationship between Sharma and the bank, the bank as trustee took on a fiduciary duty to the plan and its participants.

A fiduciary duty is the highest duty of loyalty recognized by law.

Lubbock National Bank, as the trustee for the plan, needed to value the shares being sold by Sharma and purchased by the employees. Unlike publicly traded securities where market values are established by the market and listed on stock exchanges, privately held shares can be difficult to value.

Lubbock National hired a company called Stout Risius Ross (SRR) to serve as an independent financial advisor. But just how “independent” was SRR? A group of TBM Consulting employees think that SRR was in Sharma’s pocket.

The workers say that SRR relied on projections by Sharma when setting the value of his shares. They say the projections were grossly inflated. That meant Sharma made a windfall profit and his workers paid the price.

Hindsight is a wonderful thing. In 2016, several TBM workers realized that Lubbock National Bank was being sued with respect to another company’s ESOP. The allegations were that the plan paid far too much for shares being sold by company insiders. The workers also realized that the revenue projections made with respect to TBM were overly optimistic.

They quickly concluded that they had been duped, that their shares were worth much less than they had paid and that Lubbock as trustee had been accused by at least one other company with being asleep at the switch.

Remember that even though Lubbock hired SRR to value the stock, Lubbock National had the fiduciary duty to act in the best interests of the plan participants.

According to the employees, “Lubbock owed the ESOP the highest duty of loyalty and was required to act solely with the interests of the ESOP in mind in insuring that that the price paid by the ESOP for the shares owned by parties-in-interest constituted adequate consideration.” This is especially true when the shares being sold to the ESOP come from a company insider.

Ultimately, four members of the TBM Consulting ESOP filed suit. Lawsuits filed under ERISA are filed on behalf of the plan.

The four filing the complaint say that “Despite Lubbock’s unfamiliarity with TBM, its knowledge that the future projections were heavily influenced by Sharma (whose obvious interest was to maximize the amount paid by the ESOP) and its knowledge that the actual historical performance of TBM was dramatically different from the projections, Lubbock rushed to close the ESOP transaction within a month of its appointment, ignoring the multiple red flags before it.”

Lubbock National Bank Seeks to Dismiss ERISA Claims

Like most banks, Lubbock National appears to be gearing up for a procedural war. In our experience, banks don’t want to litigate in front of a jury. They instead engage in active motion practice with the hope of either winning on a technicality or simply wearing down the other side.

Their first salvo was to seek to dismiss the workers’ complaint because those workers don’t “adequately” represent the other workers in the plan.

In throwing out the bank’s motion to dismiss, the court noted that the bank cited to no legal authority to support its position. Last month the bank tossed the bank’s motion and ruled the workers’ ERISA claims can proceed.

ERISA Fraud Involving Company Stock

Many recent ERISA fraud cases involve companies that encourage or require their employees to invest their pension or 401(k) plan monies in shares of the company.  Often these inside involve accounting fraud, improper valuation or other shenanigans.

The risk is even higher when it is a company insider that is the one selling the shares. In fact. these insider transactions are so risky that they are considered a prohibited transaction. ERISA prohibits a fiduciary from causing a plan to engage in a transaction if it knows or should know that the transaction constitutes a “direct or indirect sale or exchange”, or leasing, of any property between the plan and a party in interest; or transfer to, or use by or for the benefit of, a party in interest, of any assets of the plan.

As noted in the TBM case, however, there is an exception when there is an independent valuation of the insider’s shares.

Victim of ERISA Fraud? Did Your Employer Steal Your Money?

No matter how large or small the company you work for, you are trusting your money and retirement plans to someone else. ERISA says that many of the people associated with the plan have a fiduciary duty to both the plan and the employees who rely on that plan.

Large or small, suing your employer is not easy. If the fiduciary is a bank or accounting firm, the odds can seem daunting. Our fraud recovery lawyers can help you flip those odds in your favor. We have helped recover billions of dollars and from some of the biggest and most powerful companies in the world.

If you think you have been cheated or that your employer has withheld funds from an ESOP, pension plan, 401(k) or the like or engaged in illegal insider transactions, call us. We handle ERISA claims on a contingent fee basis meaning you don’t owe us anything for our services unless we recover money on your behalf.

For more information, visit our ERISA fraud page. Want to know if you have a case? Contact us online, by email *protected email* or by phone 414-704-6731. All inquiries are protected by the attorney – client privilege and kept confidential.

The post Workers Sue Lubbock National Bank Over Dubious Stock Purchase- ERISA Post appeared first on Mahany Law.

This post may seem a bit off topic at first but it reveals how corruptly much of this world operates. And where there is corruption, there are often corporate players involved. Corrupt politicians only have two ways of getting their illicit gains. The first involves ripping off citizens and residents. The second involves bribes from businesses that do business there. In many instances, the second method is far more lucrative.

Dutch Government Takes Over Sint Eustatius (Statia)

Citing reports of widespread financial misappropriation, discrimination, intimidation and insults, the Dutch government elected to take control of the tiny Caribbean Island. Statia gained its partial independence from the Netherlands in 2010 but remained a “special municipality.”

Earlier this year the Netherlands Secretary of Home Affairs and Kingdom Relations announced the Dutch government was dissolving the island’s governing body and relieving local officials of their positions. The move was said to be necessary to restore public order.

Prior to the takeover, a government committee found the local government was plagued by “lawlessness and financial mismanagement.” The committee also found that, “Citizens and entrepreneurs experience legal inequality. No administration is in order and the island is neglected in a physical sense.”

In announcing the takeover of Sint Eustatius, the Dutch Home Affairs Secretary, Raymond Knops, said, “Since other measures have not brought the island council to repentance, there is only one thing left to do: governing intervention. It is the harshest measure, but now that everything else has failed, it is the only possibility that remains. The people of Sint Eustatius deserve better.”

There is no word on how long the takeover will last or when new elections will be held.

Foreign Corrupt Practice Act and Corporate Misbehavior

Sint Eustatius is a tiny island nation with about 3500 residents. Although once it was a large trading outpost, modern shipping methods have left the island’s warehouses and harbor largely abandoned.

While we don’t know what financial mismanagement and corruption Dutch officials found, we suspect that it wasn’t that big. The island’s economy simply isn’t that big.

We do know, however, that corruption runs rampant in many areas of the Caribbean and in other areas of the world as well. A recent article in Face 2 Face Africa says that trillions of dollars were stolen by African despots and hidden in Western banks.

That level of corruption can only occur when the business community supplies the cash. Mining companies paying for mineral rights, oil companies paying for special tax breaks and businesses paying foreign regulators to look the other way at flagrant human rights violations or worker mistreatment.

These aren’t victimless crimes. Inevitably the taxpayers and citizens of the country whose officials are accepting bribes suffer.

Sani Abacha, the former Nigerian despot, is believed to have stolen over $5 billion. The average Nigerian makes about $5,000 per year.

Most of the developed nations have passed statutes that outlaw the bribery or attempted bribery of foreign government officials. Those laws are actively enforced.

Under the U.S. Foreign Corrupt Practices Act, the Justice Department and SEC can prosecute businesses that pay bribes or attempt to pay bribes to foreign government officials.

Many companies have gotten wise and now try to disguise bribes by using third parties or consultants as intermediaries. One company was recently caught offering the children of foreign diplomats high paying, no show jobs.

Knowing that it is sometimes impossible to prove the actual payment of a bribe, the SEC will prosecute a company if it fails to keep adequate books and records.

The SEC and Cash Whistleblower Rewards for Foreign Bribery Info

The SEC understands that catching foreign bribery is tough to do. Most of the acts of bribery frequently take place outside of the United States and rarely will a company’s books label payments to foreign officials as “bribes”!

To encourage people to come forward and report foreign bribery, Congress authorized the SEC to pay cash rewards to whistleblowers. If you have inside information about these bribery schemes or phony books and records, you could receive anywhere between 15% and 30% of whatever the government recovers from the wrongdoers. Rewards are often millions of dollars. (Our whistleblower clients have received over $100 million in rewards.)

The Company I Wish to Report Is Not a US Company, Can I Still Get a Reward?

The SEC has jurisdiction over any company that is registered with the SEC or sells shares of its stock on a US exchange. We will gladly help you determine if the company you wish to report makes you eligible for an award.

I Am Not a US Citizen, Can I Claim a Reward?

Again, the answer is yes!

Often whistleblowers with information about foreign bribery are located outside the United States. As long as you have inside information and are not the mastermind of the illegal corruption scheme, you are eligible for an award. In fact, millions of dollars have already been paid to foreign nationals.

Use of Banks to Launder Corruption Money

Some whistleblowers don’t have direct knowledge of a bribery scheme involving the business community but know that foreign and U.S. banks are being used to launder the ill-gotten gains.

The Justice Department can prosecute banks if the bank knows or should know the money coming through the bank is illegally sourced. Banks have a legal obligation to know their customers and perform due diligence on certain government officials or large depositors. If that bank has a branch in the United States (most do), there may be the opportunity to earn an award of up to $1.6 million under the federal FIRREA statute (Financial Institutions Reform, Recovery and Enforcement Act).

Special rewards are also available for people with knowledge of companies or banks doing business with Iran and Syria.

Takeaways and Next Steps for Potential Whistleblowers

We know that foreign corruption bribery exists all over the world. The takeover of tiny Sint Eustatius (Statia) by the Dutch government is unique. But the alleged corruption there is common throughout the Caribbean and the world. We even have it in some U.S cities.

Congress knows that corporate bribery is often behind these corruption scandals. Some might argue that the United States has no business policing crime that occurs outside our borders. (We have seen foreign bribery that actually takes place or is facilitated within our borders.)

There is more to the story, however. When foreign bribery occurs, legitimate US companies are hurt and U.S. jobs jeopardized. Honest companies can’t compete when corrupt ones have free reign to stack the deck. Inevitably, these schemes also mean higher prices for Americans as well.

If you have inside information about foreign bribery schemes or phony books and records, call us. All information is protected by the attorney – client privilege and kept confidential.

For more information visit our Foreign Corrupt Practices foreign bribery page. Ready to see if you have a case? Contact us online, by email *protected email* or by phone 414-704-6731 (direct).

The post Corruption Caribbean Style – FCPA Post appeared first on Mahany Law.

SEC, DOJ Continue to Hit Financial Services Sector with Record Fines for Foreign Bribery

Will the Foreign Corrupt Practices Act (FCPA) survive Donald Trump? We worried about that during the early days of the new administration. Even before President Trump took office, he appeared to be strongly opposed to the powerful anti-bribery law.

As far back as 2012, Trump said the FCPA was a “horrible” law that hurts American businesses. After the election, he allegedly told Rex Tillerson, then Secretary of State, that American companies were being unfairly hurt by laws prohibiting them from bribing foreign officials.

The Attorney General, however, says that America remains committed to prosecuting companies that offer bribes to government officials.

So who is right?

Looking back over the last 17 months since Trump took office, it appears that Jeff Sessions is right. The government remains committed to enforcing the FCPA. And that is great news to honest companies and whistleblowers.

Telia Company AB Pays Billion Dollar Penalty!

Last year, companies paid a record $2 billion dollars in penalties for violating the Foreign Corrupt Practices Act. Much of that $2 billion came from Swedish telecom giant Telia Company AB. Prosecutors say that Telia and its Uzbek subsidiary, Coscom, paid approximately $331 million to an Uzbek government official to influence the government and how it awarded mobile phone licenses in Uzbekistan.

The case was investigated by the SEC, IRS and Homeland Security in the United States and the Public Prosecution Service of the Netherlands. In announcing the resolution last year, an IRS spokesperson said, “Today marks the second resolution of proceedings against corporate entities who have engaged in a global bribery scheme of government officials. It also further demonstrates the dedication we have to identifying illegal financial transactions being used for bribery in the international community.  It is important that the global economy remain on a fair playing field and IRS will remain committed in our efforts to dismantle these kinds of corrupt financial schemes.”

Foreign Bribery Prosecutions Continue in 2018

If there was any doubt that the $965 million fine levied on Telia Company AB, earlier this month the Justice Department announced that French bank Societe Generale would pay $585 million for bribing Libyan officials during the dictatorship of Muammar Qaddafi.

Prosecutors say that Société Générale paid bribes to a Libyan “broker” between 2004 and 2009.   These payments were used in part to influence the Libyan government to “steer” investments to Société Générale.

The bank allegedly paid the broker a commission of 1.5 to 3 percent based on the amounts invested by Libya. Part of that commission was kicked back to senior government officials. Court documents say that the bank paid over $90 million in commissions. At least one of the investments made in return exceeded $3 billion. Prosecutors say that the bank made over one half billion dollars in profits.

And who facilitated this illegal scheme? Prosecutors say that U.S. brokerage firm Legg Mason. They were separately fined $64 million.

In addition to the size of the fines, this case is also notable in that involved financial institutions. Banks have historically not been targets of foreign bribery schemes. Despite their many failings, we often don’t see bribes paid to foreign government officials.

Recent settlements against Societe Generale and Legg Mason and others may signal that the SEC and Justice Department have a new focus.

Financial Services and Foreign Corruption Prosecutions

Societe Generale and Legg Mason are the newest prosecutions against financial services for firms for allegedly bribing foreign government officials. But there have been others.

In 2016 America’s largest bank, JPMorgan Chase, agreed to pay $264 million to settle charges that it violated the Foreign Corrupt Practices Act. Prosecutors say that over a seven year period, the bank hired approximately 100 people at the request of government officials in China and elsewhere in Asia. The program was internally dubbed as the “Sons and Daughters Program.”

Instead of traditional cash or monetary bribes, the consideration “paid” was giving a government official’s son or daughter a lucrative bank job in return for being allowed to expand or generate new revenues in that area of the world. Prosecutors believe that Chase made $100 million in revenues by hiring the kids of dignitaries and officials.

A senior official at the SEC said, “JPMorgan engaged in a systematic bribery scheme by hiring children of government officials and other favored referrals who were typically unqualified for the positions on their own merit. JPMorgan employees knew the firm was potentially violating the FCPA yet persisted with the improper hiring program because the business rewards and new deals were deemed too lucrative.”

Another SEC official said that no child of a foreign official referred to the program was ever denied a job.

The SEC took aim at Bank of New York Mellon for a similar scheme in 2015. The SEC accused the bank of hiring three interns during the summer of 2010 in return for getting $71 million in assets to manage for a Middle Eastern sovereign wealth firm. The three interns were relatives of government officials. A New York Times story claims an internal email at the bank acknowledged the scheme, “I am working on an expensive ‘favor’ for [Official X] — an internship for his son and cousin (don’t mention to him as this is not official).”

FCPA and Whistleblower Rewards

The United States is the only country in the world that routinely pays rewards to whistleblowers who step forward with inside information about misconduct involving foreign government officials.

Under the SEC’s whistleblower program, people with inside information about foreign official bribery can earn huge whistleblower rewards. These rewards are a percentage of how much money the government recovers from the wrongdoers. With rewards of up to 30%, it is easy to see how a reward in the Societe Generale or Telia case could be worth tens of millions of dollars.

The SEC issues tens of millions of dollars of awards but getting one can be tricky. That’s because the SEC doesn’t have the resources to investigate every one of the thousands of tips received each year. The trick to getting an SEC whistleblower award is proper preparation and presentation. Our whistleblower legal team includes the former SEC chief investigator, former enforcement counsel from the FDIC and Office of the Comptroller of the Currency. We know how to prepare bank and financial services whistleblower claims so that they receive the attention they deserve.

To learn more, visit our foreign official bribery whistleblower (FCPA) reward page. Ready to see if you qualify for a reward? Contact us online, by telephone 414-704-6731 (direct) or by email at *protected email*

All inquiries protected by the attorney – client privilege and kept completely confidential.

MahanyLaw – America’s SEC Whistleblower Lawyers

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