Posts Tagged ‘false claims act’

Karen Wilson, secretary at a Graham County, N.C. agency, notified state officials of misuse regarding federal aid money intended to be directed toward a flood cleanup operation. Wilson notified officials in 1996, but did not file a False Claims Act suit until 2001 against Graham and Cherokee Counties, as well as other conservation districts and other individual defendants. In between the time Wilson notified officials of the alleged conduct and the time she filed her suit, Graham County hired local accountants to identify the irregular spending. The state followed up and included these findings in its own report.

The False Claims Act does not allow what it calls “parasitic” whistleblower lawsuits that attempt to capitalize on public information. In 2007, federal district court judge Lacy Thornberg found the local audit and state follow-up report to constitute public disclosure under the FCA, thereby barring Wilson’s claim. The question of whether a local or state report constituting public disclosure under the FCA is one that has the federal circuits split almost evenly. The Supreme Court has granted certiorari to Wilson’s case and will address this issue and make a specific determination as to what exactly is meant by public disclosure. For more information on whistleblower lawsuits and the False Claims Act, contact a whistleblower lawyer.

On June 9, 2009, the Minnesota Appeals Court dismissed a lawsuit from former Minnesota Occupational Safety and Health Administration (“MOSHA”) investigators who alleged that they were transferred from their position and dismissed contrary to federal anti-retaliation statutes.  The investigators had complained about their supervisors’ failure to pursue citations against a concrete plant that the investigators believed was conducting business contrary to MOSHA regulations.  The complaining investigators were subsequently denied raises.  MOSHA claimed that the transfers were done to centralize staff, and that the denial of raises was an appropriate management decisions.

However, the Appeals Court determined that the plaintiff in this case, Douglas Crosby, was unable to prove that his transfer and denied raise were connected to his previous complaints about his employer’s behavior.  If this connection had been proven, Crosby would be eligible to receive payment under the federal False Claims Act (“FCA”), which contains a qui tam provision allowing whistleblowers to collect 15-30% of damages awarded by federal courts.  It is unclear whether Crosby will appeal the Appeals Court’s decision.

Another similar lawsuit brought by MOSHA investigator Terrell Swanson is still ongoing.  Swanson’s allegations are similar; he was also denied a raise and transferred following his complaints about his supervisors’ behavior.

If you are aware of ongoing fraud against the government, you could have a whistleblower lawsuit. Contact an experienced whistleblower lawyer for a claim evaluation.