Entries in Whistleblower (2)


SEC Receives Nearly 3,000 Whistleblower Tips in Year

Goodshoot/Thinkstock(NEW YORK) -- It’s only been a little over a year since the Securities and Exchange Commission (SEC) launched its Office of the Whistleblower, but it has already received almost 3,000 securities law violation tips.

In a speech this week, Sean X. McKessy, chief of the Office of the Whistleblower, said the SEC receives an average of eight tips a day, “rather than the avalanche of poor quality, frivolous tips that were predicted.”

The Office of the Whistleblower was formed as part of the Dodd-Frank Act in 2010.

“As we considered the contours of the rules to implement the Whistleblower program, we heard repeatedly that the implementation of this program would overwhelm the commission and literally shut our program down,” McKessy said, addressing the inaugural Securities Enforcement Forum in Washington, D.C. on Thursday. “We also heard that corporate compliance departments that had been built out as a result of Sarbanes-Oxley, would no longer be able to function.”

As of Aug. 8, 2012, McKessy said the office had received received 2,820 tips from people in the U.S. and from at least 45 countries.

Last year, McKessy said the SEC has “already seen an increase in the quality of the tips we have received since the passage of Dodd-Frank in July 2010.”

The SEC has said only one award has been paid. In August, a whistleblower who did not want to be identified received a payment of almost $50,000 for helping a court demand more than $1 million in sanctions in a securities fraud case.

Copyright 2012 ABC News Radio


Patient Whistleblower Exposes $150 Million Medicaid Fraud

Ingram Publishing/Thinkstock(WASHINGTON) -- In a real-life David versus Goliath story, a 63-year-old wheelchair-bound Medicaid patient took on the multi-billion-dollar healthcare giant Maxim Healthcare. And he won.

On Wednesday the House Oversight Committee heard the saga of how Richard West exposed Maxim’s widespread Medicaid fraud and helped government officials reclaim millions for the cash-strapped program.

“This [fraud] is wholly unacceptable,” said Rep. Trey Gowdy, R-S.C., “This is why people have lost trust in the institutions of government and why our fellow citizens have so little trust that we are spending their money as carefully as we would spend our own.”

Richard West is in a wheelchair, uses a ventilator and needs oxygen.  He also needs Medicaid so he can stay at home while getting care.

In March of 2003, West started receiving that in-home care but in September of 2004 New Jersey state officials suspended his Medicaid benefits, claiming he had exceeded his monthly cap.

West determined that his healthcare provider, Maxim, had billed Medicaid for 735 hours of nursing care he never received -- fraudulent charges that amounted to more than $20,000.

Armed with the evidence, West complained to New Jersey officials.  They ignored him. Next he went to Medicaid, then to a social worker, but the social worker did nothing. West then found an attorney who filed a whistleblower lawsuit under the False Claims Act and that triggered an investigation of Maxim.

“Somebody decided to make a profit on my disability and rip off the government,” West, also a Vietnam War veteran, told the committee. “That was wrong and the right thing for me to do was expose it.”

Today, seven years later, Gary Cantrell, a top government investigator in the Health and Human Service’s Inspector General’s office, told Congress that West is the reason Maxim Healthcare got caught and recently agreed to pay more than $150 million to, “resolve civil and criminal charges,” the “largest ever involving home healthcare services.”

Nine people -- eight former Maxim employees, including three senior managers and the parent of a former Maxim patient -- have pleaded guilty to felony charges for committing fraud, Cantrell testified.

Under the Whistleblower Protection Act, West will receive $14.8 million from the fine Maxim will pay.

In fiscal year 2010, whistleblowers like West helped recover $2.39 billion lost to fraud, according to a Taxpayers Against Fraud report cited in West’s attorney’s testimony. Gowdy said as much as one-fifth of the money Medicaid spends is wasted on fraud.

A provision of the Affordable Care Act provides an additional $350 million over the next decade to help fight fraud, resources Rep. Elijah Cummings, D-Md., said were necessary to prevent cases like West’s.

“When we invest in fraud prevention government spending more than pays for itself,” Cummings said. “That is one reason why repealing the Affordable Care Act and cutting Medicaid’s enforcement budget would be very short sighted and indeed counter-productive.”

Copyright 2011 ABC News Radio

ABC News Radio